HQ 0732196 - Country of origin marking requirements for cold finished steel bar products - United States International Trade Commision Rulings

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HQ 732196

May 16, 1989

MAR 2-05 CO:R:C:V 732196 LR

CATEGORY: MARKING

R. Theodore Hume, Esq.
Beveridge & Diamond, P.C.
1333 New Hampshire Avenue, N.W.
Washington, D.C. 20036

RE: Country of origin marking requirements for cold finished steel bar products

Dear Mr. Hume:

This is in response to your letter of March 1, 1989, submitted on behalf of Laurel Steel Products, Burlington, Ontario, Canada, requesting a ruling on the country of origin marking requirements of imported hot-rolled steel bars which are processed in the U.S. into cold finished bars. The issue of whether the processing of hot-rolled steel bars into cold finished bars constitutes a substantial transformation will be the subject of separate responses. You would like a ruling on the marking requirements applicable to the cold finished product assuming it is determined that the U.S. processing does not constitute a substantial transformation.

FACTS:

According to your letter, your client's U.S. subsidiary imports hot-rolled steel metal bars and processes them in the U.S. into cold finished bars. Cold finished bars are held together by metal bands. As many as 199 bars may be banded together for shipment to a customer. The number of bars varies according to the size and lengths of the cold finished bars involved. In your opinion, both the steel bars and the metal bands are excepted from country of origin marking.

ISSUE:

Assuming that the U.S. processing of hot-rolled steel bars into cold finished bars does not constitute a substantial transformation, do either the cold finished bars or the metal band that hold the cold finished bars together for shipment have to be marked to indicate the country of origin?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that, unless excepted, every article of foreign origin (or its container) imported into the United States 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 purchaser the English name of the country of origin of the article.

You cite 19 U.S.C. 1304(a)(3)(F), (G), (H), and (J) as statutory exceptions which you believe may be pertinent to your client's importations. As discussed below, we find that the steel bars are excepted from individual marking under 19 U.S.C. 1304(a)(3)(J), although the metal bands are required to be marked.

Articles of a class or kind listed in section 134.33, Customs Regulations (19 CFR 134.33), are on the so-called "J- list" and are excepted from individual marking requirements in accordance with the provisions of 19 U.S.C. 1304(a)(3)(J). Metal bars, except concrete reinforcement bars, are among the classes of articles which are included on the "J-list". Accordingly, except for concrete reinforcement bar, neither hot-rolled steel bar nor the cold finished steel bar is required to be individually marked with its country of origin.

However, 19 CFR 134.33 further provides that if articles included on the "J-list" are imported in containers, the outermost container in which the article ordinarily reaches the ultimate purchaser is required to be marked to indicate the origin of its contents. In addition, if a "J-list" article will be repacked into new containers after leaving Customs custody, the importer must certify that the new container will be marked to indicate the country of origin of the contents (see section 134.25, Customs Regulations (19 CFR 134.25)). Customs has taken the position that this provision is applicable unless the imported article is substantially transformed prior to the repacking.

Based on the assumption that the U.S. processing is not a substantial transformation, the container in which the cold finished bar is sold must be marked to indicate the country of origin of the imported hot-rolled steel bar. The metal bands holding the bars together are subject to marking if they are considered containers under 19 CFR 134.33.

Customs has previously determined that metal bands are considered containers for marking purposes. Specifically, Customs has repeatedly ruled that a metal band or strap constitutes a container under the provisions of 19 U.S.C. 1304(a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32), which authorize an exception from marking for articles when the container of such article will reasonably indicate the origin of such article. (See HQ 731768, December 8, 1988, regarding metal bands holding together a bundle of joists; HQ 731335, July 28, 1988, metal strip used to secure section of concrete interlocking pavestones; HQ 731555, July 18, 1988, metal straps and plastic shrink wrap used to secure bricks; C.I.E. 399/50, November 10, 1950, metal straps which hold bundles of concrete reinforcement bars together). In a case involving the application of an exception under 19 CFR 134.33, Customs found that a spool or reel on which wire (also a "J-list" article) was wound was a container that had to be marked (HQ 723781, January 17, 1984).

The requirement to mark the container of a "J-list" article even though the article itself is excepted from marking is to ensure that the ultimate purchaser is advised of the country of origin whenever possible. The conclusion that the metal bands holding together steel bar is a container under 19 CFR 134.33 is consistent with our previous determinations on this issue and with the underlying purpose for requiring that containers of "J- list" articles be marked.

Accordingly, although both the hot-rolled and cold finished steel bars are excepted from individual marking under 19 U.S.C. 1304(a)(3)(J) and 19 CFR 134.33, the metal bands securing them are containers which may be subject to marking. If the U.S. processing of the hot-rolled bars does not constitute a substantial transformation, in accordance with 19 CFR 134.25, the importer would be required to certify at the time of importation that the metal bands securing the cold finished bars (or any other container) will be marked to indicate the country of origin of the imported product. However, if the U.S. processing of the hot-rolled bars does constitute a substantial transformation, such certification would not be required. In either case, the container in which the hot-rolled product is imported must be marked to indicate the country of origin.

The other exceptions which are cited are not applicable in the circumstances presented. The exception provided in 19 U.S.C. 1304(a)(3)(F), which pertains to articles imported for use by the importer and not intended for sale in its imported or any other form, is not applicable since according to the facts presented, the imported steel bar is intended for sale.

The exception provided in 19 U.S.C. 1304(a)(3)(H) which applies if an ultimate purchaser, by reason of the character of such article or by reason of the circumstances of its importation, must necessarily know the country of origin of such article even though it is not marked to indicate its origin, is not applicable since the country of origin of steel bar cannot be determined on the basis of the character of the product alone and the latter part of this exception applies only in those instances where the importer is the ultimate purchaser of the imported articles and has direct contact with the foreign supplier (HQ 730243, March 5, 1987). Based on the assumption that the processing performed by the importer does not constitute a substantial transformation, the importer would not be considered to be the ultimate purchaser and this exception would not apply.

Finally, no evidence has been presented to support a marking exception under 19 U.S.C. 1304(a)(3)(G) which excepts from marking "articles to be processed in the United States by the importer or for his account otherwise than for the purpose of concealing the origin of such article and in such manner that any mark contemplated by this section would necessarily be obliterated, destroyed, or permanently concealed". In addition, as interpreted by Customs, articles excepted from marking under this provision must be marked with the country of origin after the U.S. processing (HQ 729434, May 23, 1986).

HOLDING:

Metal bars, including hot-rolled and cold finished bars, are excepted from individual country of origin marking under 19 U.S.C. 1304(a)(3)(J). However, the metal bands holding the product together are considered containers which may be subject to marking. If the U.S. processing of the hot-rolled bars does not constitute a substantial transformation, the metal bands holding the finished product together are required to be marked to indicate the country of origin of the imported bars. In such case, the importer should follow the certification procedures set forth in 19 CFR 134.25. If, however, the U.S. processing of the hot-rolled bars does constitute a substantial transformation, the bands holding the finished product together do not have to be marked and the certification procedures do not apply. In either case, the container in which the hot-rolled bars are imported are subject to marking.

Sincerely,

John Durant Director

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