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HQ 734420

March 31, 1992

MAR-2-05 CO:R:C:V 734420 RSD

CATEGORY: MARKING

Area Director
U.S. Customs
J.F.K Airport
Building 178
Jamaica, New York 11430

RE: Country of origin marking requirements for earrings that will be imported in bulk and repacked in the individual packages for sale; repacking, district director discretion; 19 CFR 134.34

Dear Sir:

This is in reference to a ruling request submitted by the law firm Sharretts, Paley, Carter & Blauvelt on behalf of their client, Crystal Brands Jewelry Group (Crystal Brands), concerning the importation of certain earrings imported in bulk that will be repacked in the U.S. Since the subject of this request pertains to on going importations in your area and we have had discussion with your office in this matter, we are treating the ruling request as a request for internal advice. Samples of the earrings in the repacked retail packages were provided for our review.

FACTS:

Crystal Brands is seeking to import earrings produced in Costa Rica into the U.S. without individual country of origin markings through the port of J.F.K. Airport. The earrings will be imported in bulk. Crystal Brands states that it will file a certification with Customs indicating that it will repack the earrings in individual packages, which will be marked to indicate the country of origin of the earrings, before they reach the ultimate purchaser.

Crystal Brands indicates that after importation all of the earrings will be shipped to a single Crystal Brands facility located in Providence, Rhode Island. The earrings will be mounted in pairs on plastic cards bearing the brand name Trifari. A bar code sticker will be attached to the front panel of each card which bears the statement "MADE IN COSTA RICA." The bar codes will be used to convey price and inventory information at the retail level. (On the submitted sample the bar code sticker is affixed to the back panel of the card). All of the imported earrings will be labelled in this manner and will reach the ultimate purchaser wrapped in clear cellophane film, through which the country of origin marking, "MADE IN COSTA RICA," can be seen. Crystal Brands states that several styles of earrings cannot be marked with their country of origin prior to importation because of their size or configuration.

ISSUE:

When can the District/Area Director of Customs exercise his discretion and allow certification procedures of 19 CFR 134.34 for the importation of unmarked merchandise which will be repacked in properly marked containers?

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).

Section 134.34 Customs Regulations (19 CFR 134.34), provides that an exception may be authorized in the discretion of the district director under 19 CFR 134.32(d) for imported articles which are to be repacked after release from Customs custody under following conditions: (1) The containers in which the articles are repacked will indicate the origin of the articles to an ultimate purchaser in the U.S.; (2) The importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense or to secure such verification, as may be necessary by certification and the submission of a sample or otherwise, of the marking prior to liquidation of the entry.

In HQ 732808, December 12, 1989, we indicated that the discretion of the district director under 19 CFR 134.34 is quite broad. He may determine whether the marking of the repacked containers will comply with 19 U.S.C. 1304. He may determine whether direct supervision, certification, verification, or review of a sample is necessary to accomplish the purposes of 19 U.S.C. 1304 and to extend the 60-day liquidation period.

In that same ruling, we also indicated that the district director would be acting within the scope of his discretion in determining that the 19 U.S.C. 1304(a)(3)(D) exception may be approved for all entries made over an extended or indefinite period time, rather than on an entry-by-entry basis. An important element in the exercise of the district director's discretion is his assessment of whether the company requesting the exception can be relied upon to carry through on its undertakings. Another factor to be considered is whether the district has adequate resources to provide the continuing supervision necessary to ensure proper country of origin making after importation.

Additional factors that the district director could consider are the importer's history of violations and record in complying with Customs procedures and regulations, whether the importer is doing the repacking himself, or having another party do the repacking, and whether the repacking is done on the importer's premises within the Customs district in which the merchandise was imported. Where the district director determines that the importer may not utilize the certification procedure of 19 CFR 134.34, he/she must able to articulate a specific reason for this decision.

In this case, the following factors are relevant:

1. Due to the size and shape of many of the earrings, the only way to mark them prior to importation is by means of hangtags. These tags would have to be removed when they are placed onto the retail cards after importation.

2. The retail card which is to be affixed will contain not only country of origin information but also a computer generated bar code which is used by retailers to convey inventory and price information. This method of displaying earrings on a retail card is a common one. It is highly unlikely that Crystal Brands will neglect to place the retail card on the earrings.

3. The proposed marking whether on the front or the back of the retail card is clearly conspicuous.

4. Crystal Brands will be do the repacking itself at its own facility; this should make supervision of the marking feasible, even though the repacking will be done outside the Customs district in which the goods are to be imported. Assuming Crystal Brands has a history of complying with country of origin marking requirements, direct supervision of the marking would not be needed on a continual basis.

HOLDING:

Based on the above considerations, we believe that the 19 CFR 134.34 procedures were designed to cover the situation presented by Crystal Brands and that absent good reason why such procedures are not appropriate (e.g., the company has a history of marking problems and cannot be relied upon to carry through its proposal), they should be approved. Please notify Crystal Brands of your decision.

Sincerely,

John Durant, Director,

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