HQ 0734635 - Country of Origin Marking for Airline Washcloths; Ultimate Purchaser; Airlines; 19 U.S.C. 1304(a)(3)(D); 19 CFR 134.32(d); 19 CFR ?134.1(d). - United States International Trade Commision Rulings

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HQ 734635

December 17, 1992

MAR-2-05 CO:R:C:V 734635 KR

CATEGORY: MARKING

Mr. John J. Peters
WESSC International
1950 Sawtelle Boulevard
Suite 360
West Los Angeles, CA 90025

RE: Country of Origin Marking for Airline Washcloths; Ultimate Purchaser; Airlines; 19 U.S.C. 1304(a)(3)(D); 19 CFR 134.32(d); 19 CFR ?134.1(d).

Dear Mr. Peters:

This is in response to your letter of April 21, 1992, concerning the country of origin marking requirements for airline washcloths imported from either China or Taiwan.

FACTS:

The washcloths will be imported into the U.S. from China or Taiwan. You state that the washcloths you have been importing are individually marked with the country of origin. You no longer wish to individually mark the washcloths with the country of origin, but instead wish to mark only the bulk packaging with the country of origin. After importation the washcloths will be sold to airlines in the U.S. You state that the washcloths will not be sold or given away by the airlines, but will remain the property of the airline.

ISSUE:

Who is the ultimate purchaser of the washcloths used on an airline?

Are the washcloths excepted from country of origin marking?

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 are the product. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Among the exceptions to country of origin marking is 19 U.S.C. 1304(a)(3)(D), also provided for in section 134.32(d), Customs Regulations (19 CFR 134.32(d)). That section provides that articles for which the marking of their containers will reasonably indicate the country of origin of the articles may be excepted from country of origin marking. However, for the exception to apply Customs must be satisfied that the articles will reach the "ultimate purchaser" in the original, properly marked containers in which the articles were imported. Section 134.1(d), Customs Regulations (19 CFR 134.1(d)), defines the "ultimate purchaser" as generally the last person in the U.S. who will receive the article in the form in which it was imported.

In HQ 734524 (July 30, 1992), reasoning that the ultimate purchaser of frozen food meals would be the airline rather than the passenger, Customs found that such frozen meals would probably be excepted from individual marking so long as the ultimate purchaser (the airline) received the meals in bulk with proper marking on the outermost containers in which they were imported. See also Information Letter, HQ 732988 (May 30, 1990).

In Legal Determination 79-0382 (HQ 710493 dated July 17, 1979), Customs found that the ultimate purchaser was not necessarily the ultimate user or consumer. In that case, dinnerware was imported for sale by the importer to a company that resold it to an airline company for its use in serving in- flight meals. The airline company received the dinnerware in the original, unopened and properly marked bulk containers. There Customs found that the ultimate purchaser was the airline company, not the airline passenger, and the dinnerware was excepted from marking as provided for in 19 U.S.C. 1304(a)(3)(D). However in HQ 724335 (January 16, 1984), Customs found that airline passengers were the ultimate purchasers of plastic cups and glasses of durable nature which the passengers could keep. Accordingly, the cups and glasses had to be marked with country of origin. The distinguishing factor between these two decisions which was determinative as to whether the imported goods should be marked was the fact that in the former decision the passengers could not take the goods with them for use elsewhere, and in the latter decision they could. In HQ 729477 (May 2, 1986), Customs found that the ultimate purchasers of air sickness bags were the individual airline passengers who received the bags incidental to the service of air transport for which consideration was paid and for whose convenience they were made available -- hence, the bags had to be marked with country of origin. However, HQ 729477 was specifically revoked in HQ 734524 (July 30, 1992).

For what purpose and in what manner imported goods are to be used has been the focus of several marking decisions which are relevant in the instant case. When imported goods are purchased by an employer for use exclusively at work by its employees, the imported merchandise has been excepted from individual country of origin marking. See HQ 734304 (January 28, 1992) (disposable industrial work coveralls distributed free of charge to employees at an industrial plant (the ultimate purchaser) for use on the job are excepted from individual marking); and HQ 732793 (December 20, 1989) (employers are the ultimate purchasers of industrial work gloves distributed free of charge to employees on the job for use at work; such gloves are excepted from individual marking). Similarly, imported goods purchased by hospitals for use exclusively on the premises by staff or patients have also been excepted from individual marking. HQ 730945 (August 11, 1988) (hospitals are the ultimate purchasers of imported patient identification bracelets; such items are excepted from individual marking); HQ 715640 (June 16, 1981) (hospitals are the ultimate purchasers of imported disposable paper shoe covers, head covers, drape sheets, gowns, towels and other similar products, none of which have to be individually marked to indicate country of origin); HQ 723745 (February 6, 1984) (hospitals are the ultimate purchasers of imported surgical masks; such items do not have to be individually marked); and HQ 730840 (January 12, 1988) (hospitals are the ultimate purchasers of imported surgical gloves; such gloves are excepted from individual marking).

Like imported items purchased by employers and distributed to their employees for use only on work premises and like the various imported items used by hospital staff and patients while on hospital premises, prepared frozen meals are purchased by the airline only for passenger consumption on the airplane during flight. In none of these situations is the imported merchandise ever otherwise sold or intended for retention and use other than on site or in flight. Accordingly, it is our opinion that the ultimate purchaser of the washcloths is the airline, and not the airline passenger. Therefore, so long as the airline continues to receive the washcloths in properly marked containers, the individual washcloths may be excepted from country of origin marking pursuant to 19 CFR 134.32(d).

It is noted that special marking requirements are applicable to textile articles under the Textile Fiber Products Identification Act ("TFPIA"), and its regulations. Thus, while Customs is prepared in this instance to allow the requested exception from country of origin marking, there may remain a requirement under the TFPIA to mark each washcloth with a sewn on or otherwise affixed label. We, therefore, suggest that you consult the Federal Trade Commission and the appropriate regulations for guidelines on this point.

HOLDING:

For purposes of country of origin marking, the ultimate purchaser of airline washcloths is the airline and not the airline passenger. Accordingly, pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d) the airline washcloths are excepted from individual country of origin marking so long as the ultimate purchaser, the airline, receives the washcloths in containers which are properly marked with the country of origin.

Sincerely,

John Durant, Director
Commercial Rulings Division

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