HQ 0732082 - Country of Origin Marking Requirements for Imported Samples used to Solicit Orders of Foreign Merchandise - United States International Trade Commision Rulings

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HQ 732082

March 14, 1989

MAR 2-05 CO:R:C:V 732082 LR

CATEGORY: MARKING

District Director of Customs
Seattle, Washington

RE: Country of Origin Marking Requirements for Imported Samples used to Solicit Orders of Foreign Merchandise

Dear Sir:

This is in response to your request for internal advice, dated September 21, 1988 (IA 50/88), regarding the country of origin marking requirements of imported samples used for the solicitation of orders.

FACTS:

The imported samples will not be sold, distributed or given away, but will be used by the importer for the solicitation of orders for foreign merchandise. According to your memorandum, some ports require these items to be marked with the country of origin while others except these from marking pursuant to 19 U.S.C. 1304(a)(3)(F). The basis for requiring marking on the sample is that the person who is having his or her business solicited should be advised of the country of origin of the merchandise he or she is about to order. For the sake of uniformity, you ask that we rule on the marking requirements applicable to these articles.

ISSUE:

Whether articles which will used only for the solicitation of orders for foreign merchandise and will not be sold, distributed or given away are excepted from country of origin marking.

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides, in general, that all articles of foreign origin imported into the U.S. must be legibly, conspicuously and permanently marked to indicate the English name of the country of origin to an ultimate purchaser in the U.S. There are, however, certain exceptions to the general rule. Among the exceptions are 19 U.S.C. 1304(a)(3)(D) which provides that articles for which the marking of the containers will reasonably indicate the origin of the articles need not be marked, and 19 U.S.C. 1304(a)(3)(F) which provides that articles imported for use by the importer and not intended for sale in their imported or any other form need not be marked. The implementing regulations to 19 U.S.C. 1304 are set forth in Part 134, Customs Regulations (19 CFR Part 134).

For an exception to be granted under 19 U.S.C.(a)(3)(D), the articles must reach the ultimate purchaser in a properly marked container and the container must reach the ultimate purchaser unopened.

Section 134.1, Customs Regulations, defines ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which is was imported (emphasis added). Although this regulation makes clear that the person may "receive" the article either by purchase or by gift, the person must nonetheless receive it.

In this case, the imported articles will be neither sold, distributed, nor given away. Instead, the importer will use them as samples to be shown to prospective customers to solicit sales of similar items. After examination of the samples, the prospective customer would be expected to return them to the salesperson. In these circumstances, we find that the prospective customer does not "receive" the imported article within the meaning of 19 CFR 134.1 and is not properly considered the ultimate purchaser. Instead, the ultimate purchaser is the importer that uses the imported samples to solicit orders. See Legal Determination 79-0382 (HQ 710493, July 17, 1979), (the ultimate purchaser of dinnerware distributed by airlines in- flight for use by passengers was the airline and not the passenger because the passengers will not keep the dinnerware, but will return it to the airline company after usage).

Based on our determination that the importer is the ultimate purchaser, we find that the imported samples are excepted from individual marking pursuant to 19 U.S.C. 1304(a)(3)(D) provided Customs officers at the port of entry are satisfied that the imported articles will be used only in the manner described above and that the importer will receive them in their original unopened cartons that are marked to indicate the country of origin.

We also find that articles in question fall within the 19 U.S.C. 1304(a)(3)(F) exception pertaining to articles imported for the use of the importer and not intended for sale. We are of the opinion that the importer is "using" the imported samples by showing them to prospective customers in order to solicit orders. To a person in the sales business, the samples are the tools of the trade. (See HQ 709199, June 28, 1978, in which articles imported for showroom display or for testing purposes were similarly considered for use by the importer within the meaning of 19 U.S.C. 1304(a)(3)(F)). Of course, the exception would not apply if the samples themselves were to be sold.

To summarize, we conclude that the imported samples may be excepted from marking under either 19 U.S.C. 1304(a)(3)(D) or

While we agree with your comment that the prospective customer who is having his or her business solicited may want (or need) to know the country of origin of the merchandise he or she is about to order, the provisions of 19 U.S.C. 1304 simply do not require disclosure of this information. The statute only requires that merchandise actually imported be marked to indicate the country of origin to the ultimate purchaser. As indicated above, since we do not consider the prospective customer to be the ultimate purchaser of the samples, the samples are not required to be marked. Of course, the prospective purchaser would be considered the ultimate purchaser of any merchandise that is actually ordered and each of these items would be subject to marking at the time of importation. (Similarly, while a prospective purchaser of mail order merchandise may also want to know the country of origin of the merchandise he or she is about to order, 19 U.S.C. 1304 does not require the disclosure of this information in the catalogue. This type of information is required, however, under the Textile Fiber Identification Act (15 U.S.C. 70, as amended). As a practical matter, even if the samples were marked with their country of origin, this would not necessarily inform the prospective purchaser of the country of origin of the merchandise actually ordered, which may differ from that of the samples.

Although the above-described samples are excepted from country of origin marking under the provisions of 19 U.S.C. 1304, if the imported samples are textile fiber products subject to the requirements of the Textile Fiber Identification Act, or wool products subject to the requirements of the Wool Labeling Act of 1939, as amended (15 U.S.C. 68 et seq.), under the rules and regulations issued by the Federal Trade Commission (FTC) under these Acts, the imported samples, as well as the products themselves, are required to be marked (subject to specified exceptions) with their respective fiber contents and other required information, including country of origin. (See 16 CFR 303.21 and 300.22). Pursuant to sections 11.12 and 11.12b, Customs Regulations (19 CFR 11.12 and 11.12b), the Customs Service is responsible for the enforcement of the labeling requirements of these Acts at the time of importation. If you have any questions regarding the interpretation of the FTC rules and regulations, the FTC should be contacted.

HOLDING:

Imported articles that are to be used by the importer only as samples to solicit orders of merchandise and are not otherwise for sale or distribution, may be excepted from marking under either 19 U.S.C. 1304(a)(3)(D) or (F).

Sincerely,

John Durant, Director

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