In ruling NY N307372, Customs and Border Protection (CBP) discussed the country of origin of cut and polished diamonds. The rough diamonds at issue are mined in Botswana and shipped to the U.S. where they are evaluated for size, shape, and brilliance. Afterwards, the rough diamonds are shipped to China where they are sawn and blocked. The rough diamonds are then shipped to India where they are cut, faceted, and polished, suitable for the use in manufacture of jewelry, but unmounted at the time of importation into the United States.
Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)) provides that the “[c]ountry of origin” means 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” (19 CFR Part 134).
In the instant case, the cutting and polishing of the rough diamonds performed in India is a significant manufacturing operation which has the effect of changing the character of the outer surface of the rough diamond, resulting in a substantial transformation. Therefore, CBP determined that the country of origin of the cut and polished diamonds is India.