HQ 0732814 - Country of origin marking requirements applicable to labels to be affixed to beverage bottles - United States International Trade Commision Rulings

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HQ 732814

February 21, 1990

MAR-2-05 CO:R:C:V 732814 jd

CATEGORY: MARKING

District Director of Customs
P.O. Box 2112
Old San Juan, Puerto Rico 00903

RE: Country of origin marking requirements applicable to labels to be affixed to beverage bottles

Dear Ms. Pollock:

This is in reply to your letter of September 26, 1989 (your file MAR-2-05:DD:CO:IAB CT-454), concerning the application of country of origin marking requirements to labels to be affixed to beverage bottles.

FACTS:

You received a request made on behalf of two companies involved in bottling rum concerning the marking requirements for labels to be affixed to the rum bottles. The labels are printed by a lithographic process in Canada, then shipped to the Dominican Republic in sheet form. In the Dominican Republic the sheets will be cut, framed, die-cut, inspected and packed. The companies purchase the labels in the Dominican Republic and bring them to their locations in Puerto Rico and the U.S. to be affixed to bottles containing rum.

ISSUES:

Are labels in sheet form substantially transformed by being cut, framed, die-cut, inspected and packed?

Must labels imported into the U.S. and Puerto Rico to be affixed to beverage bottles be individually marked with their 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 container) will
permit in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article.

Section 134.35, Customs Regulations (19 CFR 134.35), provides that an article used in the U.S. in manufacture which results in an article having a name, character, or use differing from that of the imported article will be considered substantially transformed, and therefore the manufacturer or processor in the U.S. who converts or combines the imported article into the different article will be considered the ultimate purchaser of the imported article within the contemplation of 19 U.S.C. 1304(a). Accordingly, the article shall be excepted from marking. However, in accordance with 19 U.S.C. 1304(b) and { 134.22, Customs Regulations (19 CFR 134.22), the outermost container of the imported article shall be marked to indicate the country of origin of the article.

Customs ruling 727885 (November 1, 1985), concerned the marking requirements for labels imported in bulk into the U.S. to be affixed to containers. It was determined that the manufacturer who affixed the labels to the containers was the ultimate purchaser of the labels. Therefore, pursuant to 19 U.S.C. 1304(a)(3)(D) (see 19 CFR 134.32(d)), marking on the container of the labels was permitted and the labels were excepted from individual marking.

Customs ruling 729436 (April 18, 1986), held that labels from Mexico to be affixed to bottles of vodka in the U.S. were not required to be individually marked. "[T]he imported items lose their separate identity and become an integral part of the vodka bottles to which they are affixed." Only the shipping containers in which the labels are imported from Mexico needed to display the origin of the labels.

The processing in the Dominican Republic of the labels as received from Canada involves cutting a sheet of labels into individual labels and placing a border around the label. This is not the creation of a new article with a new name, character or use, and we agree with your assessment that this is not a substantial transformation. Accordingly, the labels remain of Canadian origin for marking purposes.

Pursuant to { 134.35, Customs Regulations, and in accord with rulings 727885 and 729436, we hold that the manufacturer who affixes labels to rum bottles is the ultimate purchaser of the labels. Country of origin marking on the outermost container of the labels reaching the ultimate purchaser will satisfy the requirements of 19 U.S.C. 1304.

HOLDING:

The labels from Canada shipped to the Dominican Republic for the processing described above are not substantially transformed by that processing and remain of Canadian origin for purposes of 19 U.S.C. 1304. The manufacturer who purchases the labels and affixes them to beverage bottles is the ultimate purchaser of the labels. Marking on the outermost container of the labels reaching the manufacturer will satisfy marking requirements.

Sincerely,

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