HQ 0734874 - Application for Further Review of Protest No. XXXXXXXXXXXXXX concerning Country of Origin Marking on Sweater Hangtags; Marking Duties; 19 U.S.C. 1304(f) and 19 CFR 134.46. - United States International Trade Commision Rulings

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HQ 734874
May 10, 1993
MAR-2-05 CO:R:C:V 734874 ER

CATEGORY: MARKING

Area Director
U.S. Customs Service
J.F.K. Airport
Building 178
Jamaica, New York 11430

RE: Application for Further Review of Protest No. XXXXXXXXXXXXXX concerning Country of Origin Marking on Sweater Hangtags; Marking Duties; 19 U.S.C. 1304(f) and 19 CFR 134.46.

Dear Sir:

This is in response to your memorandum dated October 20, 1992, forwarding the application for further review of the above- referenced protest, submitted by Grunfeld Desiderio Lebowitz and Silverman (counsel) on behalf of XXXXXXXXXXXXXXXXXXXXXXXXXX ("protestant"), regarding the assessment of additional marking duties on certain imported sweaters. A sample sweater was submitted with the application.

FACTS:

On November 11, 1988, entry was made for 245 dozen sweaters from Taiwan. On November 17, 1988, a notice of marking/ redelivery (CF 4647) was issued with instructions to mark the sweater hangtags with country of origin in close proximity to the U.S. address and in letters of equal size, or else remove the hangtags from the garments. By letter (undated), received by Customs on November 17, 1988, protestant's broker requested release of the merchandise to protestant for corrective marking of the hangtags on the same side as the U.S. address. On November 21, 1988, the importer certified that the merchandise was in conformity with the marking statute. On February 2, 1989, the entry was liquidated, with marking duties being assessed at the rate of 10 percent for failure to retain merchandise for Customs' inspection after the CF 4647 was certified.

Protestant claims that the merchandise was sufficiently marked, at the time of entry, to avoid misrepresenting or confusing the ultimate purchaser as to the actual country of origin and, accordingly, that marking duties should not have been assessed. This assertion is made despite the fact that (1) after the time the CF 4647 was issued protestant's broker requested release of the merchandise to protestant for remedial marking of the hangtags on the same side as the U.S. address and (2) protestant subsequently certified that the merchandise had been marked with country of origin, as required by the marking statute.

The sweaters in question have a permanently attached brand name label (i.e., XXXXXX) and a second permanently attached label which sets forth the fiber content, size and care information. Both labels are located in the neck area and each is marked with country of origin.

The garments were also imported with hangtags which are swift-tacked to the body of the sweater just below the armhole. The hangtags contain the brand name, size, and country of origin on the front. The size information is repeated on the back along with the address and telephone number of protestant's New York showroom. The sample hangtag provided with this protest is stamped on the back with the words "Made in Taiwan". As imported, the back of the hangtag did not display this marking.

ISSUE:

Whether the marking duties were properly assessed?

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. Section 134.51, Customs Regulations (19 CFR 134.51), 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 article or container or to return all released articles to Customs' custody for marking, exportation or destruction. This section further provides that the identity of the imported article shall be established to the satisfaction of the district director. Section 134.52, Customs Regulations (19 CFR 134.52), allows a district director to accept a certification of marking supported by samples from the importer or actual owner in lieu of marking under Customs' supervision if specified conditions are satisfied.

In 731775 (November 3, 1988), Customs ruled that two prerequisites must be present in order for it to be proper to assess marking duties under 19 U.S.C. 1304(f). These two prerequisites are:

1. the merchandise was not legally marked at the time of importation;

2. the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation.

Two related provisions of the marking regulations, section 134.46, Customs Regulations (19 CFR 134.46) and section 134.47, Customs Regulations (19 CFR 134.47) are of concern in determining whether the merchandise was legally marked at the time of importation. The critical difference between the two provisions is that 19 CFR 134.46 requires that the name of the actual country of origin appear "in close proximity" to the U.S. reference and in lettering of at least comparable size. By contrast, 19 CFR 134.47 is less stringent, providing that when as part of a trade name, trademark or souvenir mark, the name of a location in the U.S. or "United States" or "America" appears on the imported article, the name of the country of origin must appear in close proximity or "in some other conspicuous location". In other words, the latter provision triggers only a general standard of conspicuousness. In either case, the name of the country of origin must be preceded by "Made in", "Product of", or other similar words.

Since the U.S. reference is not part of a trade name, trademark or souvenir mark, the more stringent marking requirements of 19 CFR 134.46 are applicable. Protestant argues that the marking on the merchandise (twice in the neck area and once on the front of the hangtag) at the time of importation was sufficient to avoid misrepresenting or confusing the ultimate purchaser as to the actual country of origin. Protestant also argues that the country of origin marking on the front of the hangtag is in sufficiently close proximity to the U.S. address on the back of the hangtag to satisfy the close proximity requirements of 19 CFR 134.46. Interestingly, at no time in the protest does protestant assert that the corrective marking was ever performed, despite the fact that the merchandise was released to protestant for the express purpose of performing corrective marking and that protestant subsequently certified to Customs that such marking had been performed.

To satisfy 19 CFR 134.46, country of origin marking must appear in close proximity to the U.S. reference and in letters of at least comparable size. Neither criterion was satisfied by the markings appearing on the garment at the time of importation. The marking in the neck area of the sweater and on the front of the hangtag is not in close proximity to the U.S. reference, nor do any three of the markings appear in letters of comparable size to those in the U.S. address. This office has a long standing practice of ruling that the close proximity requirements of 19 CFR 134.46 mean that the country of origin marking must appear on the same side or surface as the U.S. reference so that the information is viewable in one inspection of the item. Moreover, this "same-side" requirement is applied even if the article is otherwise properly marked with country of origin. (See HQ 733840 (February 1, 1991)) garment hangtags had to be marked with the country of origin of the garment on the same side of the hangtag as the U.S. address despite the fact that the garments were otherwise properly marked with country of origin; and HQ 729469 (February 24, 1988) gloves otherwise marked with country of origin did not satisfy marking requirements because hangtags bearing U.S. reference were not also marked with country of origin on same side of hangtag as U.S. reference.)

It is Customs' determination, therefore, that the imported sweaters were not in conformity with country of origin marking requirements at the time of importation. The hangtags should have been marked with country of origin on the same side as the U.S. reference and in lettering of at least comparable size; accordingly, marking duties were properly assessed.

HOLDING:

To comply with the marking statute and 19 CFR 134.46, sweater hangtags featuring a U.S. address must be marked with country of origin on the same side of the hangtag as the U.S. reference and in lettering of at least comparable size. In view of this requirement, the subject merchandise was not properly marked with country of origin at the time of importation and, accordingly, marking duties were properly assessed. A copy of this decision should be attached to the Customs Form 19, to be sent to protestant.

Sincerely,

John Durant, Director
Commercial Rulings Division

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