HQ 0734796 - Country of Origin Marking of Screws; Shelf kits; 19 CFR 134.33; 19 CFR 134.26; 19 CFR 134.34; T.D. 91-7. - United States International Trade Commision Rulings

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HQ 734796

December 24, 1992

MAR-2-05 CO:R:C:V 734796 RC

CATEGORY: MARKING

Mr. Edward L. Hart, Jr.
Lee Hardeman Customs Broker, Inc.
P.O. Box 45545
Atlanta, GA 30320-0545

RE: Country of Origin Marking of Screws; Shelf kits; 19 CFR 134.33; 19 CFR 134.26; 19 CFR 134.34; T.D. 91-7.

Dear Mr. Hart:

This is in response to your letter of August 14, 1992, requesting a ruling on the country of origin marking requirements for foreign manufactured screws imported into the U.S. and sold as parts of unassembled shelf kits.

FACTS:

Your client, Woodline, Inc. (Woodline), will import in bulk into the U.S. screws made in China. The screws will be packed in plastic bags of approximately four screws per bag. The bags will be packed ready for shipment in cartons marked with the country of origin "Made in China" on the outer most container. The screws themselves will not be marked pursuant to section 134.33, Customs Regulations (19 CFR 134.33). After importation, the screws will be sold to IKEA, a distributor of unassembled shelf kits, who will attach packets of unmarked screws to unassembled shelves in retail boxes containing other components of U.S. origin. The screws cost $.12 and the wooden shelves $2.50 - $3.00. Pursuant to a telephone conversation with Bjorn Karlsson, of Woodline, on December 18, 1992, it is our understanding that the screws and screw packets will not be sold individually; they will only be sold as components of unassembled shelf kits. Mr. Karlsson stated that the cost of the screws comprises three to four percent of the total shelf kit cost, depending upon the particular model. The screws are the only kit components of foreign origin. A fax transmitted from Mr. Karlsson on December 18, 1992 demonstrates the label for the shelf kits containing the bag of four screws. It indicates the following marking "Design and Quality, IKEA of Sweden, Made in USA".

ISSUE:

Whether shelf kits containing foreign-made screws must be marked to indicate their country of origin.

LAW AND ANALYSIS:

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, 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 its container) will permit, in such a manner as to indicate to the ultimate purchaser the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The "country of origin" for marking purposes is defined by section 134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Provided for under section 134.1(d), Customs Regulations (19 CFR 134.1(d)), the "ultimate purchaser" generally is defined as the last person in the United States who will receive the article in the form in which it was imported. The marking must be conspicuous to the ultimate purchaser. Here, because the screws would not be sold for use in the manufacture of finished shelves, the ultimate purchaser is the person who buys the shelf kit at retail.

Pursuant to section 134.33, Customs Regulations (19 CFR 134.33), screws are "J-Listed", that is, imported screws are excepted from country of origin marking inasmuch as their containers are marked in a manner which is legible, conspicuous, and permanent.

According to T.D. 91-7 (dated January 16, 1991), "if the materials or components are not substantially transformed as a result of their inclusion in a set or mixed or composite goods, then, subject to the usual exceptions, each item must be individually marked to indicate its own country of origin." Thus, if the screws are installed in shelves prior to retail sale, they are substantially transformed and not subject to marking. Where the screws are sold as separate parts of kits, they may constitute significant components requiring marking. As discussed in T.D. 91-7, Customs will follow a "common sense" approach in determining whether articles of foreign origin imported as parts of kits will be subject to country of origin marking.

In HQ 555365, we found that foreign-made screws when sold with U.S.-made junction boxes were not subject to marking. The reasoning was that in terms of value, the screws constituted an insignificant part of the set, 2.3% of the total value. Here, Mr. Karlsson indicates that the screws account for three to four percent of the shelf kit cost; this percentage is de minimis. Thus, we will extend the treatment of T.D. 91-7 to the instant case provided that the screws are combined as described herein with the unassembled shelving units for sale as kits and not simply individual packets of screws.

HOLDING:

Imported screws, packaged in the U.S. for sale as components of shelf kits, will not need to be marked to indicate their country of origin based upon the finding that their cost is de minimis, in comparison to the other shelf kit components. The label on the shelving kit which reads "Design and Quality, IKEA of Sweden, Made in USA", is subject to the requirements of the Federal Trade Commission. Please be advised that you must comply with the requirements of that agency.

Sincerely,

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