HQ 0734148 - Decision on Application for Further Review of Protest xxx concerning country of origin marking of knit garments. 19 CFR 134.46; comparable size requirement; hang tag; 19 CFR 134.52; 19 CFR 134.54 - United States International Trade Commision Rulings

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HQ 734148

February 13, 1992

MAR-2-05 CO:R:C:V 734148 GRV

CATEGORY: MARKING

Area Director of Customs
JFK Airport, Bldg. 178
Jamaica, NY 11430

RE: Decision on Application for Further Review of Protest xxx concerning country of origin marking of knit garments. 19 CFR 134.46; comparable size requirement; hang tag; 19 CFR 134.52; 19 CFR 134.54

Dear Sir:

This is in response to the above-referenced protest, filed by Soller, Singer & Horn (now Soller, Shayne & Horn), on behalf of Mexx USA Inc., contesting your July 13, 1990, decision to issue marking/redelivery notices on three entries of ladies knit blouses and sweaters from Hong Kong determined to be improperly marked with their country of origin by virtue of a hang tag attached to the garments.

In response to requests from this office for a sample of the hang tag in dispute, Counsel submitted a copy of the hang tag by letter dated September 10, 1991. The authenticity of the hang tag copy as that in dispute was verified by the Commodity Team Leader at JFK as a "reasonable facsimile" in a telephone conversation with a member of my staff on October 4, 1991.

FACTS:

Between approximately June 27 and July 2, 1990, the importer entered three shipments of ladies wearing apparel (knit blouses and sweaters) from Hong Kong containing 2,112, 384 and 1,200 pieces each. (It is disputed whether all of the garments were marked with a fabric label sewn into the center of the neck area inside the merchandise, however, this Protest only concerns the markings on the hang tags affixed to the garments, which references a locality (Europe) other than the country of origin (Hong Kong)).

The entries were collectively inspected on July 3, 1990 and each was determined to be not legally marked. One reason the merchandise was determined to be not legally marked was because the fabric labels were not located in the nape of the garments neck as required. Another reason for the marking determination concerned the fiber content information denoted on the fabric label, which is required by the Federal Trade Commission (FTC). Both reasons were denoted on each Customs Form 4647 (Notice of Redelivery-Markings, etc.) issued.

On July 13, 1990, it appears that the FTC fiber content issue was favorably resolved, i.e., the FTC decided that the garments' labels were properly marked. The importer alleges that, "[u]pon learning that there was no apparent problem with the three shipments, [it] began immediately filling outstanding orders for this merchandise," apparently believing "there was no effective restraint on these goods." However, because of the markings on the hang tags, second Notices of Redelivery-Marking were issued for each entry on July 13, 1990, instructing the importer to either mark the garments so that the "Made in Hong Kong" country of origin marking was as prominent as the "Styled in Europe" designation or to remove the "Styled in Europe" designation from the hang tag.

Regarding the hang tags, the sample submitted shows the "Styled in Europe" designation to be uniformly printed across the bottom of the hang tag in bolded white lettering on a black background in approximately 15-point type (>3/16" letters), whereas, the "Made in Hong Kong" marking is variously handwritten on a small circular sticker label separately affixed to the hang tag at the other end--some 3+ inches away--from the Europe designation and is denoted in black ink on a white background in letters ranging from approximately 3-10-point type (<1/16->1/8" letters).

On July 24, 1990, the importer signed the Customs Forms 4647, indicating that the merchandise had been correctively marked, but did not submit samples of the marking. The next day (July 25, 1990) Customs officials attempted to inspect the redelivered merchandise, but only a portion of the entries was available:

(1) 870 of the 2,112 pieces from the first shipment, (2) 29 of the 384 pieces from the second shipment, and (3) 400 of the 1,200 pieces from the third shipment.

These portions of the entries were found to be correctly marked, as the hang tags were removed from the merchandise. On August 15, 1990, Customs Forms 5955A (Notice of Penalty or Liquidated Damages Incurred and Demand for Payment) were issued on each entry, and on August 16, 1990, Customs Forms 29 (Notices of Action) were issued on each entry, informing the importer that marking duties of 10% were being assessed on each entry for the missing portion of merchandise in each entry.

The present Protest (Customs Form 19) was filed August 17, 1990.

Counsel contends that the garments were properly marked, in that the hang tag labels contained clear and prominent language that the goods were "Made in Hong Kong," so that the issuance of the marking/redelivery notices were without legal justification. Counsel claims that, in addition to the country of origin marking on the hang tags, "made in Hong Kong" appeared in two other places on these garments--(1) a fabric label at the nape of the neck, and (2) another fabric label on the inside seam of the garment, although which inside seam in not specified, so that no one could possibly have been deceived as to the country of origin of these goods.

ISSUES:

I. Does the country of origin marking on the hang tag comply with the marking requirements of 19 U.S.C. 1304 and 19 CFR 134.46?

II. Whether the issuance of the marking/redelivery notices was proper in this case.

LAW AND ANALYSIS:

The marking statute, 304 of the 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 primary purpose of the country of origin marking statute 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 CCPA 297, 302, C.A.D. 104 (1940).

Where locations other than the country of origin of the merchandise appear on an imported article, 19 CFR 134.46 imposes further marking requirements. This regulation provides that:

[i]n any case in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or locality in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appear on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning.

The purpose of this regulation is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the origin of the imported article, 19 CFR 134.36(b), and constitutes a separate consideration than whether the country of origin marking itself is conspicuous. See, Headquarter Ruling Letter (HRL) 733888 dated October 9, 1991 (water heaters not conspicuously marked, however, marking requirements of 19 CFR 134.46 were met). Thus, counsel's arguments that the primary fabric label(s) completely fulfilled the country of origin marking requirements prescribed by 19 U.S.C. 1304 and that the hang tag markings have no bearing whatsoever on the proper identification of the country of origin are dismissed as irrelevant. In this case, both the comparable size and close proximity requirements of 19 CFR 134.46 are in issue.

In C.S.D. 79-36, we considered whether a label, indicating that trousers made in Hong Kong were "Styled in London" and attached to the outer waistband of the trousers, complied with the marking requirements of 19 CFR 134.46. Finding that the label did not satisfy the comparable size requirement, Customs noted that the phrase "Styled in London" was potentially misleading to ultimate purchasers because it appeared prominently across the label in contrasting colors in letters twice the size of those denoting the country of origin marking--"Made in British Hong Kong," which was printed in uncontrasting colors.

Concerning the location of country of origin markings for purposes of meeting the close proximity requirement of 19 CFR 134.46, we have ruled that the country of origin must appear on the same side(s) or surface(s) on which the name of the locality other than the country of origin appears. See, HRL 734232 dated November 20, 1991. In this case, although the sample hang tag submitted was marked on the same side as the "Styled in ..." marking, as the country of origin marking is accomplished by means of affixing a separate small sticker to the "Styled in ..." tag and no assurances were made that this location methodology held true for the marking of all the hang tags, there exists a legitimate concern respecting the close proximity location of the other sticker markings on the other hang tags.

Concerning the print size and type used to denote the country of origin markings for purposes of meeting the comparable size requirement of 19 CFR 134.46, we have stated that the term "comparable" does not mean "identical," but rather "sufficiently similar." HRL 733736 dated June 19, 1991. In this case, we do not believe that the present country of origin marking is sufficiently similar to the "Styled in ..." marking. Comparing the two markings we find the following:

Country of Origin Marking Other Locality Reference

1. Manner of type -
variously handwritten uniformly printed

2. Location of marking -
on separate small uniformly across bottom sticker variously of hang tag affixed to hang tag

3. Print Size -

3-10-point type 15-point bolded

As material differences are found in each of these areas of comparison, we do not find the country of origin marking to be comparable in size to the locality other than marking. This is especially the case here because the other locality reference is presented in large letters in a bolded-letter format, whereas the country of origin marking appears in small handwritten print. See, C.S.D. 91-23 (we note that, in general, information present- ed in a bold print type and/or a large print size tends to draw the ultimate purchaser's attention away from other information that is presented in a lighter-face type and/or a smaller print size). Accordingly, we find that the subject garments were not legally marked in that they did not satisfy the requirements of 19 CFR 134.46.

Imported articles determined to be not legally marked are subject to the provisions of Subpart F of 19 CFR Part 134. Section 134.51 of this Subpart provides that when articles or containers are found upon examination not to be legally marked, the district director shall notify the importer on Customs Form 4647 to arrange with the district director's office to properly mark the articles or containers, or to return all released articles to Customs custody for marking, exportation, or destruction. In this case, the district director correctly followed this procedure in issuing the CF 4647s for the not legally marked garments. This section further provides that the identity of the imported articles shall be established to the satisfaction of the district director.

Section 134.52 of this Subpart allows district directors to accept certificates of marking that are supported by samples of the articles required to be marked in lieu of marking under Customs supervision if specified conditions are satisfied and requires the district director to notify the importer when the certificate of marking is accepted. In this case, the importer did not submit supporting samples and was not notified by the district director that the certificates were accepted. Thus, the importer's belief "there was no effective restraint on these goods," was erroneous.

HOLDING:

The country of origin marking(s) on the hang tags do not comply with the marking requirements of 19 U.S.C. 1304 and 19 CFR 134.46, in that material differences are present in the manner in which the other locality marking is presented compared to the country of origin. The print size and type used to denote the country of origin marking is not comparable type to that used to denote the other locality marking. Further, it is not certain that the country of origin sticker is uniformly presented in close proximity to, i.e., on the same side as, the other locality reference, as the small sticker is separately affixed to the hang tag. Thus, pursuant to 19 CFR 134.51, issuance of the marking/ redelivery notices was proper.

You are directed to deny the Protest in full. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant as part of the notice of action on the protest.

Sincerely,

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