HQ 0734482 - Country of Origin Marking for Enameled Lapel Pins from China; Gifts; Ultimate Purchaser; 19 CFR 134.1(d); 19 CFR 134.1(d)(4); Pabrini, Inc. v. United States, 630 F.Supp. 360 (C.I.T. 1986); HQ734202 (November 12, 1991). - United States International Trade Commision Rulings

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HQ 734482
February 13, 1992

MAR-2-05 CO:R:C:V 734482 ER

CATEGORY: MARKING

Mr. Mark Mederski
Vice President, Membership
American Motorcyclist Association
P.O. Box 6114
33 Collegeview Road
Westerville, Ohio 43081-6114

RE: Country of Origin Marking for Enameled Lapel Pins from China; Gifts; Ultimate Purchaser; 19 CFR 134.1(d); 19 CFR 134.1(d)(4); Pabrini, Inc. v. United States, 630 F.Supp. 360 (C.I.T. 1986); HQ734202 (November 12, 1991).

Dear Mr. Mederski:

This is in response to your letter of January 13, 1992, addressed to the Office of the Commissioner concerning the country of origin marking requirements for enameled lapel pins. Your letter was forwarded to the Office of Regulations and Rulings for a reply. No samples were provided.

FACTS:

American Motorcyclist Association ("AMA") orders enameled lapel pins from International Badgeworks, a California based company. The pins are made off-shore in Shang Hai, China, and are shipped to International Badgeworks in California. International Badgeworks then ships the pins to AMA's headquarters in Westerville, Ohio. AMA receives the pins in poly bags, 100 pins per bag. Each poly bag is sealed and is marked with the country of origin.

AMA orders approximately 200,000 pins each year. There are 25 designs of pins and quantities range from as many as 50,000 of one design to 2,000 of other designs. AMA awards 99 percent of the pins on an annual basis, presumably to its members, for longevity at the time of AMA membership renewal. The remaining one percent of the pins are sold as replacements.

ISSUE:

Who is the ultimate purchaser of the pins that are given away at the time of membership renewal and that are sold as replacements?
Does the country of origin marking on the poly bags satisfy the country of origin marking requirements of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304)?

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. 19 CFR section 134.1(d)(4), Customs Regulations (19 CFR 134.1(d)(4)), specifies that if the imported article is distributed as a gift the recipient is the "ultimate purchaser". In a decision analogous to the present case, Customs ruled that pens given away by companies to their clients or customers as promotionals were "gifts" within the meaning of the Customs regulations. As the recipients, the clients or customers were the "ultimate purchasers" and hence the pens had to be individually marked to comply with the country of origin marking requirements of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304). There, Customs specified that marking only the poly bags in which the pens were imported, and not the individual pens, was not acceptable. HQ 734202 (November 12, 1991).

In Pabrini, Inc. v. United States, 630 F.Supp. 360, 361 n.5, 362 n.7 (C.I.T. 1986), the Court noted that the requirement that all goods entering the United States must be marked with their country of origin dates to the Tariff Act of 1890, ch. 1244, section 6, 26 Stat. 567, 613. Under federal common law at the time of the enactment of the statute, "gift" was defined as a gratuitous transfer of property to another without consideration. See, e.g., Schumacher v. United States, 55 F.2d 1007, 1011 (Ct.Cl. 1932). In the case at hand, since the lapel pins are given away gratuitously as an award for longevity by AMA to members at the time of membership renewal, under the Customs regulations, the recipient of the pin would be considered the ultimate purchaser. Thus, the lapel pins must be individually marked in a permanent, legible and conspicuous manner so as to indicate their country of origin to the recipient. Marking only the poly bags in which the lapel pins are imported with the country of origin is not acceptable since the pins do not remain in the unopened poly bags until they reach the final recipient.

HOLDING:

Since the enameled lapel pins are awarded by AMA to members for longevity at the time of membership renewal, the member recipients are considered the "ultimate purchasers" within the meaning of 19 U.S.C. 1304 and 19 CFR 134.1. Consequently, the pins must be individually marked in a permanent, legible and conspicuous manner to indicate their country of origin to AMA member recipients.

Sincerely,

John Durant, Director
Commercial Rulings Division

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