HQ 0732682 - Country of origin marking of imported replacement parts for drills and screwguns - United States International Trade Commision Rulings

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HQ 732682
November 28, 1989

MAR-2-05 CO:R:C:V 732682 KG

CATEGORY: MARKING

Steve Jackson
Black & Decker Inc.
P.O. Box 564
Hampstead, Maryland 21074

RE: Country of origin marking of imported replacement parts for drills and screwguns

Dear Mr. Jackson:

This is in response to your letter of August 24, 1989, requesting a country of origin ruling regarding imported replacement parts for drills and screwguns. We regret the delay in responding to your inquiry.

FACTS:

You propose to import spare parts for drills and screwguns from Mexico. These parts would be used as replacement parts for after-sales service. The parts would be sent to Black & Decker service centers, other authorized service centers and national accounts service centers such as Sears. They are used by these service facilities to repair and refurbish a discontinued line of drills and screwguns. Although sales to tool owners are estimated by you to be less than 5% of total sales, tool owners may purchase the replacement parts directly from a service center and do the repairs themselves. You state that the parts may be repackaged after importation.

ISSUE:

Whether imported replacement parts for drills and screwguns are excepted from individual country of origin marking requirements.

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 U.S. 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 the ultimate purchaser in the U.S. the English name of the country of origin of the article. The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, 12 CIT ___(CIT 1988), that: "In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297, 302, C.A.D. 104 (1940), where the court stated that: "Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that 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."

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.32(d), Customs Regulations (19 CFR 134.32(d)), reiterates the exception contained in 19 U.S.C.

The exception set forth in 19 U.S.C. 1304(a)(3)(D) applies in cases where the article is imported in a properly marked container and Customs officials at the port of entry are satisfied that in all foreseeable circumstances, the ultimate purchaser will receive it in its original unopened marked container. The ultimate purchaser is defined in section 134.1(d), Customs Regulations (19 CFR 134.1(d)), as the last person in the U.S. to receive the article in the form in which it was imported.

In this instance, the replacement parts may be imported in a box or other container in which the consumer, serviceman or distributor will receive the part. The consumer, serviceman or distributor all could be ultimate purchasers of the parts, depending upon the circumstances of the particular transaction. Since, in this case, the ultimate purchaser may be a consumer who most likely will purchase just one replacement part, the 19 U.S.C. 1304(a)(3)(D) exception is applicable only if each replacement part is imported in its own container which is marked to indicate the country of origin and Customs officials at the port of entry are satisfied that the replacement part will reach the ultimate purchaser in that original container. In such circumstances, the part itself need not be marked.

In ruling #732681 (November, 1989), Customs allowed the 19 U.S.C. 1304(a)(3)(D) exception for the individual country of origin marking of replacement parts for snowmobiles, sea-boos, ski-boos and industrial tractors provided that the replacement parts were imported in properly marked containers in which the ultimate purchaser would recieve the part.

You cited 5 ruling letters in support of your position that you are entitled to the 19 U.S.C. 1304(a)(3)(D) exception. However, four of the ruling letters you cited explicitly state that the imported item will be sold to the ultimate purchaser in the unopened marked container in which the item is imported. #720580 (Novemer 3, 1982), #727139 (April 10, 1985), #709210 (September 11, 1978), and #712115 (May 15, 1980). The fifth ruling letter cited, #729052 (November 8, 1985), is a form letter on which an "X" is marked in front of the phrase "No Substantial Transformation." This ruling letter is a denial for an exemption from country of origin marking.

You stated in your letter that the parts may be repackaged after importation. Although the 19 U.S.C. 1304(a)(3)(D) exception would not apply generally to any parts that may be repackaged after importation, pursuant to 19 CFR 134.34, this exception may be authorized in the discretion of the District Director for imported articles which are to be repacked after release from Customs custody if the containers in which the articles are repacked will indicate the origin of the articles to an ultimate purchaser in the U.S. and the importer arranges for supervision of the marking of the containers by Customs officers at the importers expense or secures such verification as may be necessary, by certification and the submission of a sample or otherwise.

HOLDING:

The imported replacement parts are excepted from being marked with the country of origin on the part provided each part is imported in its own container which is marked to indicate the country of origin in accordance with 19 U.S.C. 1304 and 19 CFR Part 134 and Customs officials at the port of entry are satisfied that the part will reach the ultimate purchaser in this marked container. If the replacement parts are to be repacked by the importer after importation, an exception from individual marking may be authorized in the discretion of the District Director if certain conditions are satisfied.

Sincerely,

Marvin M. Amernick
Chief, Value, Special Programs

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