HQ 0734352 - Application for Further Review of Protest Number 1401- 91-100081. Country of Origin Marking of Imported Hose from Greece; Ultimate Purchaser; 19 U.S.C. HQ 733678 (August 30, 1990); Bureau Circular MAR-2-RM (November 4, 1971). - United States International Trade Commision Rulings

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HQ 734352
March 30, 1992

MAR-2-05 CO:R:C:V 734352 ER

CATEGORY: MARKING

Mr. Dennis Murphy
District Director of Customs
101 East Main Street
Norfolk, Virginia 23510

RE: Application for Further Review of Protest Number 1401- 91-100081. Country of Origin Marking of Imported Hose from Greece; Ultimate Purchaser; 19 U.S.C. HQ 733678 (August 30, 1990); Bureau Circular MAR-2-RM (November 4, 1971).

Dear Mr. Murphy:

This is in response to your memorandum dated September 4, 1991, transmitted with the application for further review in the above-referenced protest.

FACTS:

Protestant is challenging the assessment of 10 percent marking duties. The record shows that entry of hose was made by protestant on December 5, 1990. Customs issued a Notice of Redelivery, CF 4647, to protestant. The notice stated that the imported merchandise was in violation of Section 304 of the Tariff Act of 1930, as amended, because the hose was not marked every ten feet with the country of origin.

Protestant responded to the redelivery notice in a submission dated January 24, 1991, addressed to the District Director of Customs in Norfolk. A copy of this submission, identified as Exhibit B, was provided with the subject request for further review.

Protestant claims that since the imported hose is sold to distributors who resell the hose to customers in the original, unopened bales in which the merchandise is imported and which are marked with the country of origin, that the hose was improperly made the subject of notices of redelivery. Protestant provided several statements from the distributors asserting that they resell the original, unopened, marked bales to industrial and agricultural customers that use the hose either in the length imported or in shorter lengths which they cut from the coil.

Norfolk Customs requested that protestant obtain statements of disposition or use from the ultimate purchasers of the imported hose. To date, these statements have not been provided. Norfolk Customs maintains that adequate evidence has not been submitted to prove that the distributors' customers are necessarily the ultimate purchasers of the merchandise in its imported condition because the possibility exists that they may once again sell the hose. Accordingly, Norfolk Customs maintains that the hose should be marked every ten feet to indicate the country of origin. Since the hose was not legally marked prior to liquidation, marking duties were assessed.

ISSUE:

Whether the assessment of marking duties was proper.

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 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. Congressional intent in enacting 19 U.S.C. 1304 was 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 are the product. Part 134, Customs Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

19 CFR section 134.1(d), Customs Regulations (19 CFR 134.1(d)), defines the "ultimate purchaser" as generally the last person in the United States who will receive the article in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser.

Pursuant to 19 U.S.C. 1304(a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), Customs excepts from individual marking those imported articles for which the marking of the containers will reasonably indicate the origin of the articles. This exception applies in instances where the merchandise is imported in a properly marked container and customs officials at the port of entry are satisfied that the ultimate purchaser will receive it in its original unopened and properly marked container. Accord, Legal Determination 79-0382 (July 17, 1979). As indicated below, protestant has not provided sufficient proof to establish the applicability of the exception to the imported hose.

In the instant case, protestant asserts, and its distributors affirm by written statements, that the hose is sold to the distributors in the original, unopened and properly marked bales in which the merchandise arrived in the United States and that the distributors subsequently resell the hose in the same imported form: unopened, sealed and marked. Customs finds, therefore, that the distributors are not the ultimate purchasers of the imported articles; rather, the ultimate purchasers are those companies that purchase the product for their own use. (Cf HQ 733678 (August 30, 1990), hospitals and hospital supply distributors were the ultimate purchasers of imported surgical towels purchased by them for their own use.) Although protestant submitted written statements from the distributors asserting that the distributors' customers are the end users of the merchandise in its imported form, no written statements from the distributors' customers were submitted to corroborate these assertions and the assessment of marking duties was proper as Norfolk Customs had requested. In the absence of statements from the distributors' customers, Customs could neither determine the identity of the ultimate purchaser, nor ascertain whether the imported hose remained in the original and properly marked bale until it is received by the ultimate purchaser. Hence, protestant has not adequately established the applicability of the marking exception provided for in 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d).

HOLDING:

In the absence of satisfactory evidence establishing the identity of the ultimate purchasers of the imported hose from Greece and that such ultimate purchasers received the merchandise in the original, unopened and marked bales, the hose may not be excepted from individual country of origin marking pursuant to the exception provided for by 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d). Accordingly, the hose was not legally marked and marking duties were properly assessed. You are directed to deny the protest in full. A copy of this decision should be attached to Customs Form 19 to be sent to protestant.

Sincerely,

John Durant, Director
Commercial Rulings Division

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