HQ 0224671 - Loh Sun International Inc.; relabelling of cigarettes with Surgeon General's warning; 26 U.S.C. 5713; 15 U.S.C. 1333 - United States International Trade Commision Rulings

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HQ 224671

November 1, 1993

ENT-1-07-CO:R:C:E 224671 CB

CATEGORY: ENTRY

Mr. James Tang
BJ Customs Brokerage Co.
P.O. Box 91034
Los Angeles, CA 90009-1034

RE: Loh Sun International Inc.; relabelling of cigarettes with Surgeon General's warning; 26 U.S.C. 5713; 15 U.S.C. 1333

Dear Mr. Tang:

This is in response to your letter of April 21, 1993, on behalf of your client Loh Sun International Inc., wherein you requested a ruling on the following fact situation:

FACTS;

According to your letter, your client imports several brands of British cigarettes from Singapore. Each of the packaged cigarettes have the country of origin label as required. However, because these cigarettes were originally intended for Asian markets, in most instances they do not bear the required Surgeon General's warning label as required by law. One of the reasons the importer was not able to have the goods labelled in Singapore was the fact that the cigarettes were in a bonded warehouse in Singapore and no manipulation of any kind is allowed.

Your client is seeking permission from Customs to relabel the product with the Surgeon General's warning label at your client's warehouse and to pay the necessary costs to cover any Customs verification of the labelling. You state that relabelling in a foreign trade zone or bonded warehouse would pose a financial hardship on your client.

ISSUE:

Whether the proposed procedure is permissible?

LAW AND ANALYSIS:

All cigarettes imported into the United States must be marked in accordance with 26 U.S.C. 5723 and 15 U.S.C. 1331 et seq. ("the Cigarette Act"). Section 4 of the Cigarette Act imposes labelling requirements on the manufacturers, packagers, and importers of cigarettes. Section 4(c) requires that any company
wishing to sell cigarettes within the United States must submit a letter to the Federal Trade Comission explaining how it will comply with the warning label display requirements.

Cigarettes that do not bear the required markings are considered restricted, not prohibited, merchandise. They are considered restricted because cigarettes not permitted entry for labelling violations may be entered if the defect in labelling is cured. Restricted merchandise is permitted entry into a Customs Bonded Warehouse (CBW) or a Foreign Trade Zone (FTZ) only. Altering the labelling or packaging of tobacco products within the Customs territory of the U.S. is not permitted unless the party doing so has obtained a permit from the Bureau of Alcohol, Tobacco and Firearms. See 26 U.S.C. 5713. Permits are issued only to those parties engaged in the full range of activities associated with tobacco products manufacturing. Permits will not be granted solely for relabelling activities. Therefore, if your client wishes solely to relabel the cigarettes, it will be unable to do so within the Customs territory of the United States.

However, applying the warning label to the cigarettes can be done in an FTZ which is outside of the Customs territory. Cigarettes altered in a zone are permitted entry into the United States, provided all other applicable laws and requirements are satisfied.

HOLDING:

Cigarettes which do not bear the Surgeon General's Warning are restricted merchandise. Altering the cigarette package, within the Customs territory, requires a permit from the Bureau of Alcohol, Tobacco and Firearms. However, relabelling may be conducted in a foreign trade zone without the need for a permit.

Sincerely,

John Durant, Director
Commercial Rulings Division

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