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HQ 733990


June 17, 1991

MAR-20-5 CO:R:C:V 733990 RSD

CATEGORY: MARKING

Mr. Alfredo Perez
Frontier Products Co.
2910 San Bernardo
Laredo, Texas 78040

RE: Country of origin marking requirements for imported flint rock arrowheads, stones; 19 CFR 134.32(c); economically prohibitive

Dear Mr. Perez:

This is in response to your letter of December 2, 1990 and your follow up letters of February 11, 1991 and March 12, 1991 requesting a binding ruling on the country of origin marking requirements for flint rock arrowheads imported from Mexico. Two sample arrowheads accompanied the submission.

FACTS:

Frontier Products Co. (Frontier) is in the import/export and mail order business, selling western, indian, and muzzleloading supplies. Frontier has been importing flint rock arrowheads from Mexico through the port of Laredo. The arrowheads are designed to look primitive and are made out of stone. They are sold as souvenirs through souvenir stands. The arrowheads are imported in bags containing 1,000 arrowheads, which are marked with "MADE IN MEXICO." The individual arrowheads are taken out of the bag and are sold loose. Frontier had been importing between 5,000 and 8,000 arrowheads a week.

Local Customs officials advised Frontier that the each arrowhead must be individually marked to indicate its country of origin. Frontier is marking the arrowheads with a sticker to indicate its country of origin. Your letter indicates that it costs $325.10 to import 6,000 arrowheads a month without a country of origin sticker. Placing the stickers on the arrowheads increases the cost of importing the 6,000 arrowheads by $36, of which $18 is for the cost of the stickers and $18 is for the labor costs of putting the stickers on the arrowheads. You indicate that the major problem in marking the arrowheads is the time it takes to put the stickers on the arrowheads. You claim that the delay caused by putting the stickers on the arrowheads has resulted in a reduction in the amount of arrowheads imported into the U.S. from 24,000 to 6,000. This has caused a significant reduction of monthly profit from $1000.68 down to $179.40. You further state that the marking is done by two regular workers and one part-time worker and that you have to pay your employees, who have other duties, overtime to do the marking.

ISSUE:

Whether the arrowheads are excepted from country of origin marking under 19 CFR 134.32(c) covering articles that cannot be marked prior to shipment to the U.S. except at an expense economically prohibitive of its importation?

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. 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 (1940). C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S, is able to find the marking easily and read it without strain. That section further provides that the degree of permanence should be at least sufficient to insure that in any reasonably foreseeable circumstance the marking shall remain on the article until it reaches the ultimate purchaser unless it is deliberately removed.

An article may be excepted from marking under 19 U.S.C. 1304(a)(3)(c) and 19 CFR 134.32(c), if the article cannot be marked prior to shipment to the U.S. except at an expense prohibitive of its importation. You indicate that your cost of importing 6,000 arrowheads is $323.10 ($.054/per arrowhead). Placing a sticker on the arrowheads increases your cost by only $36 (about $.006 per arrowhead). The profit realized from selling the arrowheads without the marking was about $.04 per arrowhead. We do not find that this cost of marking qualifies as an economically prohibitive one. Although the increased costs associated with marking on a low cost item like the arrowheads may be significant, in this case we do not find them economically prohibitive. It appears that the major problem associated with marking the arrowheads is that the increased time involved in marking the arrowheads causes a sizeable reduction in the number of arrowheads that can be imported into the U.S. In order to comply with the marking law, it may be necessary for you to hire additional employees for the purpose of marking the arrowheads.

HOLDING:

The arrowheads do not qualify for an exception from individual marking under 19 U.S.C. 1304(a)(3)(c) and 19 CFR 134.32(c). They must be individually marked to indicate their country of origin.

Sincerely,


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