HQ 0733753 - Country of origin marking of imported water meter accessories; municipality, ultimate purchaser, cartons, 19 CFR 134.1(d), 19 CFR 134.32(d), 19 CFR 134.34 - United States International Trade Commision Rulings

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HQ 733753

June 6, 1991

MAR-2-05 CO:R:C:V 733753 RSD

CATEGORY: MARKING

Mr. Larry Martens
Jano Metal Products, Inc.
24 ST. Remy Drive
Nepean, Ontario K2J 1A3

RE: Country of origin marking of imported water meter accessories; municipality, ultimate purchaser, cartons, 19 CFR 134.1(d), 19 CFR 134.32(d), 19 CFR 134.34

Dear Mr. Martens:

This is in response to your letter of August 29, 1990, regarding water meter accessories. In a subsequent telephone conversation with a member of my staff on November 27, 1990, you stated that would like a binding ruling on the country of origin marking requirements for the water meter accessories that you intend to import into the U.S.

FACTS:

Jano Metal Products, Inc. (Jano) is considering importing into the U.S. a line of water meter accessories. You indicated in the November 27, 1990, telephone conversation that the products are made in Taiwan and will be shipped to Canada before being imported into the U.S. However, in the next few months Jano intends to import into the U.S. directly from Taiwan. The products that will be imported in the U.S. include the following:

- brass couplings for residential water meters - non-malleable cast iron flange couplings for larger water meters
- rubber gaskets to fit various sizes of meter couplings - water meter cable which connects water meters with external registers

These imported products will be sold by your company only in carton quantities to municipalities which install water meters. Your company will deal directly with the municipalities, with no distributors or agents. You indicate that the cartons containing the water meter accessories will be properly marked with the country of origin of the accessories, Taiwan. Although the water meter accessories are installed with a water meter, in a customer's home or business, you indicate that even after installation, the water meters and accompanying accessories remain the property of the municipality. ISSUE:

Whether water meter accessories sold to municipalities are required be individually marked with country of origin?

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 its 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. 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 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." United States v. Friedlaender & Co. 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).

Articles for which the marking of the containers will reasonably indicate the origin of the article are excepted from marking under 19 U.S.C. 1304(a)(3)(D). For an exception to be granted under 19 U.S.C. 1304(a)(3)(D), the article must be imported in the container and that container must reach the ultimate purchaser unopened. See also 19 CFR 134.32(d).

In order to determine whether this exception applies it is necessary to determine who is the ultimate purchaser of the water meter accessories. Part 134 Customs Regulations (19 CFR Part 134), implements the country of origin marking regulations and exceptions of 19 U.S.C. 1304. Section 134.1(d), Customs Regulations, (19 CFR 134.(d)) defines ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it is imported. In this case, if the ultimate purchaser is the municipality, the above exception may apply. However, if the municipality's customer is the ultimate purchaser the exception would not apply. In HQ 731937, February 27, 1990, Customs ruled that imported sewer caps and gate valves, if purchased by and for the use of a municipality or other local government agency, such municipality or agency would be the last person in the U.S. to receive them in the form in which they were imported and the ultimate purchaser of these items for the purposes of 19 U.S.C. 1304. We noted that although citizens of the municipality pay taxes which ultimately are used to pay for all municipal purchases, citizens are not involved in the purchasing decision. In C.S.D. 88-26, HQ 730945, August 11, 1988, Customs determined that a hospital rather than the patient was the ultimate purchaser of imported patient identification bracelets because the bracelets are really given to patients for the hospital's use. Similarly, in this case we find that the municipalities are the ultimate purchasers of the water meter accessories because these products are installed in a customer's home or business, for a municipality's use to determine the proper billing of its customers. Moreover, the municipalities actually do the purchasing of the water meters and the accompanying accessories by deciding which products to buy. Most significantly, the water meter and the accessories remain the property of the municipality; ownership or title does not change, even after installation in a customer's home or business. Therefore, the municipality is the last person to receive the water meter accessories in the form in which they are imported, and would be the ultimate purchaser of the water meter accessories.

For this ruling, we are assuming that none of the water meter accessories are pipes or pipe fittings of iron or steel. We were not presented with any samples and are not able to make a determination if the any of these articles should considered pipe or pipe fittings. However, if after the articles are classified, it is determined that some of the water meter accessories are pipes or pipe fittings of iron or steel, they would have to be marked with the country of origin in accordance the requirements of 19 U.S.C. 1304(c). This provision requires that imported pipe and pipe fittings of iron or steel must be marked with the English name of country of origin by means of die stamping, cast- in-mold lettering, etching or engraving. Because 19 U.S.C. 1304 also does not permit exceptions to marking based on any of the exceptions listed in 19 U.S.C. 1304(c), if any articles are considered pipe or pipe fittings, they cannot be excepted from marking based on 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d).

HOLDING:

The municipalities who buy the water meter accessories directly from the importer are the ultimate purchasers of these products. Assuming the water meter accessories are imported in cartons which are marked to indicate the country of origin and the district director at the port of entry is satisfied that these cartons will reach the municipalities unopened, the individual water meter accessories are excepted from country of origin marking under 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d). If the merchandise is going to be repacked in the U.S., the exception from marking the articles under 19 CFR 134.32(d) will be permitted only if the district director is satisfied that importer will follow the procedures outlined 19 CFR 134.34. This ruling is not applicable if any of the water meter accessories are determined to be pipe or pipe fittings of iron or steel.

Sincerely,

John Durant, Director

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