HQ 0734595 - Country of Origin Marking of Imported Imitation Jewelry; 19 U.S.C. 1304(a)(3)(G); 19 CFR 134.32(g); 19 CFR 134.34; 19 CFR 134.26 - United States International Trade Commision Rulings

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HQ 734595
August 4, 1992

MAR-2-05 CO:R:C:V 734595 ER

CATEGORY: MARKING

Mr. Nick Nowick
Magic Novelty Co. Inc.
308 Dyckman Street, New York, NY 10034-5391

RE: Country of Origin Marking of Imported Imitation Jewelry; 19 U.S.C. 1304(a)(3)(G); 19 CFR 134.32(g); 19 CFR 134.34; 19 CFR 134.26

Dear Mr. Nowick:

This is in response to your letter dated April 3, 1992, in which you request a ruling concerning the country of origin marking requirements for certain imitation jewelry. Samples of the imitation jewelry were submitted with the request.

FACTS:

You state that almost all the merchandise imported by you is in an unfinished condition and is subjected to further processing, including plating, stringing and attaching medallions or charms. Presumably, the processing is generally performed by your customers prior to the sale to the retail buyer or retail establishment.

The imported merchandise consists of the following items: metal beads (BM1905); stainless steel necklaces (ZNH4570); copper coated steel bracelets (ZBH4203); copper coated chain connectors/extenders (ZCN4523); and copper coated steel necklaces (NH10277). Details regarding the manner in which the merchandise is imported were not provided.

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that every article of foreign origin (or its container) 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. The purpose of the marking statute is to inform the ultimate purchaser of the country of origin so that he can decide whether or not to purchase the goods.

Pursuant to 19 U.S.C. 1304(a)(3)(G) and 19 CFR 134.32(g), one of the general exceptions from the marking requirements is for articles to be processed in the U.S. by the importer or for his account otherwise than for the purpose of concealing the origin of such articles, and in such manner that any mark contemplated by law would necessarily be obliterated, destroyed, or permanently concealed. You assert that the jewelry qualifies for such an exception by virtue of the further processing performed on it after importation by your customers.

The imported merchandise is not entitled to such an exception because the processing is not performed "by the importer or for his account" as set is set forth in the statute. Nonetheless, the imported articles may qualify for an exception from individual country of origin marking pursuant to another statutory provision or section of the regulations, as is set forth below.

An article is excepted from marking under 19 U.S.C. 1304(a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. No details were provided regarding the manner in which the merchandise is imported, nor the identity of your customers, nor whether your customers sell to retail customers or retail establishments. Thus, for purposes of this ruling, we will assume that the merchandise is imported in bulk and is repackaged for sale to retail customers or retail establishments by your customers subsequent to the operations performed to finish the jewelry.

Pursuant to section 134.34, Customs Regulations (19 CFR 134.34), an exception may be authorized under these circumstances at 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 the 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 secures such verification, as may be necessary by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry.

In HQ 734420 (March 31, 1992), a case involving the country of origin marking requirements for earrings that are imported in bulk and repacked in individual packages for sale, Customs noted the following:

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 [of] 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 marking 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 [be] able to articulate a specific reason for this decision.

Since the operations to be performed on the imported merchandise (such as plating and minor assembly) do not amount to a substantial transformation, the ultimate purchaser of the merchandise is the retail buyer. (See C.S.D. 91-7 (HQ 732159) dated September 7, 1990, where Customs found that jewelry which is subjected to gold or silver electroplating after importation has not been substantially transformed.) Because these items are sold to an interim party before they are sold to the ultimate purchaser, the district director may require certification from you or the subsequent purchaser who finishes and repacks the merchandise, to the effect that the imported merchandise will be repacked in such a manner so as to inform the ultimate purchaser, the retail purchaser, of the country of origin of the imported merchandise.

HOLDING:

So long as the district director is satisfied that the imported imitation jewelry will be repacked into packaging that is properly marked with country of origin and that the ultimate purchasers will receive the merchandise in these properly marked packages, the merchandise may be excepted from individual country of origin marking pursuant to 19 U.S.C. 1304(a)(3)(D), 19 CFR 134.32(d) and 19 CFR 134.34.

Sincerely,

John Durant, Director

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