HQ 734214

November 18, 1991

MAR-2-05 CO:R:C:V 734214 GRV

CATEGORY: MARKING

Ms. Shirley Harvey

Customs Manager

Browning

3005 Arnold Tenbrook Road

Arnold, Missouri 63010-9406

RE: Country of origin marking of fishing rods (without

reels) made in Taiwan and assembled in China. Ultimate

purchaser; 19 CFR 134.1(d); foreign processing

(assembly); substantial transformation; Belcrest

Linens; C.S.D. 80-111; C.S.D. 85-25; T.D. 67-173

Dear Ms. Harvey:

This is in response to your letters of June 12, and October

30 and 31, 1991, requesting a ruling regarding the country of

origin marking of fishing rods (without reels) made in Taiwan and

assembled in China. Photographs showing the various component

parts and the assembled fishing rods were submitted.

FACTS:

Fishing rods (without reels), assembled in China from

component parts manufactured in Taiwan, are imported by your

company. The component parts of the fishing rods consist of a

fishing rod\--a composite of approximately 40% graphite and 60%

fiberglass, foregrip, reel seat, butt grip, and line guides,

which can range in number from 5-11, depending on the style

fishing rod. These components parts comprise approximately 85%

of the total value of the finished fishing rods.

In China, the parts are assembled together: the foregrip,

reel seat and butt grip are glued onto the rod, and, the line

guide components are thread wrapped onto the rod and the thread

is epoxy encapsulated. The assembled fishing rods then have

various information, including the country of origin, silk-

screened onto the rods, and are packaged for export to the U.S.

The rods are enclosed in a plastic bag, and six rods are packaged

in an inner carton, with sixty rods packaged in a master carton.

Although most fishing rod sales are in quantities of six or

multiple units of six, individual rods are sold, and the plastic

bag is usually removed by distributors to display the fishing

rod.

You request a ruling as to the country of origin of the

imported products and also what the marking should indicate.

The photographs submitted admit to the assembly of the

fishing, but do not show any legible country of origin marking.

In a telephone conversation with a member of my staff on

October 30, 1991, another representative of your company (Kent

Heitz) stated that there was no desire to indicate more than the

country of origin. Thus, you asked us to disregard other marking

issues, such as \"assembled in China,\" which would raise a marking

issue under 19 CFR 134.46.

ISSUE:

Whether the imported fishing rods must be marked to indicate

their country of origin, as required by 19 U.S.C. 1304.

LAW AND ANALYSIS:

The marking statute, 304 of the Tariff Act of 1930, as

amended (19 U.S.C. 1304), provides that, unless excepted, every

article of foreign origin (or its container) imported into the

U.S. shall be marked in a conspicuous place as legibly, indelibly

and permanently as the nature of the article (or its container)

will permit in such a manner as to indicate to the ultimate pur-

chaser the English name of the country of origin of the article.

Part 134, Customs Regulations (19 CFR Part 134), implements the

country of origin marking requirements and exceptions of 19

U.S.C. 1304.

The primary purpose of the country of origin marking statute

is to \"mark the goods so that at the time of purchase the ulti-

mate purchaser may, by knowing where the goods were produced, be

able to buy or refuse to buy them, if such marking should influ-

ence his will.\" United States v. Friedlaender & Co., 27 CCPA

297, 302, C.A.D. 104 (1940).

The \"ultimate purchaser\" is defined generally as the last

person in the U.S. who will receive the article in the form in

which it was imported. 19 CFR 134.1(d). If an article is to be

sold at retail in its imported form, the purchaser at retail is

the \"ultimate purchaser.\" 19 CFR 134.1(3).

The country of origin for marking purposes is defined at

134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean the

country of manufacture, production, or growth of any article of

foreign origin entering the U.S. Further work or material added

to an article in another country must effect a substantial trans-

formation in order to render such other country the \"country of

origin\" within the meaning of Part 134. A substantial transfor-

mation occurs when articles lose their identity and become new

articles having a new name, character, or use. Koru North

America v. United States, 12 CIT 1120, 701 F.Supp. 229 (1988).

The question of when a substantial transformation occurs for

marking purposes is a question of fact; to be determined on a

case-by-case basis. Uniroyal Inc. v. United States, 3 CIT 220,

542 F.Supp. 1026 (1982), aff\'d, 1 Fed.Cir. 21, 702 F.2d 1022

(1983).

In determining whether the combining of parts or materials

constitutes a substantial transformation, the issue is the extent

of operations performed and whether the parts lose their identity

and become an integral part of the new article. Belcrest Linens

v\. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff\'d, 2

Fed.Cir. 105, 741 F.2d 1368 (1984). Assembly operations which

are minimal or simple, as opposed to complex or meaningful, will

generally not result in a substantial transformation. See,

C.S.D.s 80-111, 85-25, 89-110, 89-118, 89-129 and 90-97.

In T.D. 67-173, 1 Cust.Bull. 366 (1967), we considered

whether the domestic assembly of imported parts to make fishing

rods and reels constituted a substantial transformation and found

that it did not, stating that the assembly of all or substan-

tially all of the components imported did not result in the

manufacture of a new and different article. Accordingly, we

stated that one of the parts, such as the main reel housing,

should be marked to indicate the country of origin, so that the

marking remains legible and conspicuous after the reels were

assembled. See also, C.S.D. 80-111 (foreign fan components not

substantially transformed by domestic, 20-step, assembly-line

operations, as the identity of the foreign components was not

lost or physically altered, no skilled labor or specialized

equipment was required, and the assembly costs were relatively

low).

In this case, we do not find that the assembly in China of

foreign fishing rod components constitutes a substantial trans-

formation of the Taiwanese components. The extent of operations

performed is simple\--requiring only three assembly operations

(gluing, tying/binding, and epoxy encapsulation), which add only

15% to the total value of the finished fishing rods\--and the

component parts do not lose their identity\--no change to the

physical dimensions of the components occurs. Accordingly, the

imported fishing rods must be legibly and conspicuously marked to

indicate their country of origin: \"Taiwan.\" You have stated

that the country of origin is silk-screened onto the rods, which

accords with designation in T.D. 67-173 that one of the main

parts of the fishing rods be marked. However, as no sample

marking was submitted, we cannot rule as to whether the print

size you elect to denote the country of origin marking is

sufficient to be considered conspicuous within the meaning of 19

U.S.C. 1304.

HOLDING:

The imported fishing rods must be marked to indicate that

Taiwan is their country of origin, as required by 19 U.S.C. 1304,

as the foreign (China) assembly operation is a minor operation

which does not substantially transform the Taiwanese component

parts. Accordingly, you are advised to check with the Customs

officials at the port you intend to import these fishing rod

components through to ensure that the country of origin marking

method you employ meets the conspicuous marking requirements of

19 U.S.C. 1304 and 19 CFR Part 134.

Sincerely,

John Durant, Director

Commercial Rulings Division