H311970

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H311970 October 14, 2020 OT:RR:CTF:FTM H311970 TJS CATEGORY: Origin Mr. Aaron Marx Crowell & Moring LLP 1001 Pennsylvania Avenue, N.W. Washington, D.C. 20004 RE: Country of Origin Marking of Mixed Greenery Wreath with Gold Leaves Dear Mr. Marx, This is in response to your letter, dated June 30, 2020, requesting a binding ruling, on behalf of Caffco International (“Caffco”), with respect to the country of origin marking of a mixed greenery wreath. In addition to your written submission, our decision below takes into consideration a telephone conference with you on October 2, 2020. You have asked that certain information submitted in connection with this ruling request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), your request for confidentiality is approved. The information contained within brackets and all attachments to your request for a binding ruling will not be released to the public and will be withheld from the published version of this ruling. FACTS: The merchandise at issue is a 32-inch Mixed Greenery Wreath with Gold Leaves, Style No. 2006012. According to your submission, the wreath will be manufactured in Cambodia from components made in China. The following are the materials from China: polyvinylchloride (“PVC”) sheets on rolls, PVC pine needles, polyethylene (“PE”) pellets, galvanized iron wire, epoxy resin, black iron wire, natural pinecones, and a battery-operated LED light set. The components from Cambodia are the following: gold paint, flexo print packaging, and a brown master carton. The ruling request describes the operations in Cambodia as follows: Unload and transport materials to the warehouse; Inspect incoming materials and light set; Transfer materials to the manufacturing line; PVC sheets are fed into a specially designed PVC roping machine that chops the plain sheets and twists them with the galvanized wire to create an artificial pine-shaped rope; PVC rope cutting, where the PVC ropes are machine-cut into predetermined lengths; Pine needle roping, where pre-cut three dimensional PVC strands are attached to twisted wires to create an artificial pine-shaped tip; Final cutting and shaping of the pine needle tips; Garland twisting, where the PVC rope and PE tips are counted and inserted in order into the garland twisting machine; Injection molding of three different components, where PE pellets are molded into new finished parts in custom steel injection molds: Injection molding of plastic berry w/gold tipping; Injection molding of plastic pine w/brown center; and Injection molding of plastic laurel leaf; Shaping, welding, and powder coating the wire wreath base, which includes: Black iron wire is cut into predetermined lengths for ring shaping and welding; The wire is bent into a ring shape; The wire is butt-welded to complete the ring; and The ring is pretreated, applied with an epoxy resin powder, and cured at high temperature; Attach the garland and pine needles to the wire frame; Attach the light set; Decorating, where natural pine cones, plastic berries, pine tips, and laurel leaf are attached by hand; Quality assurance (“QA”) testing; Shaping; Packing and loading the goods for transport You state that the process requires twelve types of highly specialized equipment, including: a roping machine; a cutting machine; a pine needle machine; a shaping machine; a garland machine; a plastic injection molding machine; a wire cutting and extension machine; a ring forming machine; a butt welding machine; a spot welding machine; an electrostatic powder coating system; and a binding machine. According to your submission, the labor in Cambodia constitutes more than half of the manufacturing costs. You believe that the materials imported from China are substantially transformed into the finished wreath in Cambodia. Therefore, you argue that the country of origin for marking purposes of the wreath is Cambodia. In the alternative, you request reconsideration of Headquarters Ruling Letter (“HQ”) H308201, issued to Caffco on May 12, 2020. HQ H308201 also concerned the country of origin of a pine vinyl wreath manufactured in Cambodia from Chinese components. The following were the materials from China: PVC sheet in rolls, PVC pine needles in bundles, plastic berry picks, galvanized iron wire, glitter, pinecones, a battery-operated LED light set, and flexo print packaging. The manufacture of the wreath included cutting, attaching, and shaping the PVC rolls into ropes with bristles; applying glitter to the berry picks, bristle pine bundles and pinecones; inserting the needle bundles into a garland-twisting machine to create a pine vinyl garland; and cutting the wire to length to create a double frame. Workers then attached the garland, picks, pinecones, and light set to the frame. CBP determined that the country of origin of the wreath was China because all the components from China had predetermined uses and the manufacturing process in Cambodia was not complex enough to amount to substantial transformation. ISSUE: What is the country of origin for marking purposes of the mixed greenery wreath with gold leaves? LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940). Part 134, Customs and Border Protection (“CBP”) Regulations (19 C.F.R. § 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part.” A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use, which differs from the original material subjected to the process. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). In determining whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the article’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative. The question presented is whether the components

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).Part 134, Customs and Border Protection (“CBP”) Regulations (19 C.F.R. § 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part.” A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use, which differs from the original material subjected to the process. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982).  In determining whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the total