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HQ 735037

December 29, 1993

MAR 2-05 CO:R:C:V 735037 LR

CATEGORY: MARKING

Ms. Laurie Everill
J.C. Penny Purchasing Corporation
P.O. Box 10001
Dallas, Texas 75301-0001

RE: Country of origin marking of "Bag of Blocks"; sets; composite goods; 19 CFR 134.32(d); 19 CFR 134.34; T.D. 91-7

Dear Ms. Everill:

This is in response to your inquiry of February 8, 1993, concerning the country of origin marking of an article identified as a "Bag of Blocks" consisting of plastic blocks in a cotton bag with drawstring. A sample bag with blocks was submitted with your inquiry; however, a sample retail package was not.

FACTS:

The sample submitted consists of a textile drawstring bag containing 120 variously shaped blocks of injected, molded plastic. The bag and drawstring are comprised of 100 percent cotton woven materials. When flat, the bag measures approximately 10-1/2 inches in width by 13-1/2 inches in length. The bag will be manufactured in China, then purchased and imported into Israel by the Israeli block manufacturer, who will screen print the bag with the words "BAG OF BLOCKS." The Israeli manufacturer will insert the blocks into the bag and package the article for retail sale in the U.S.

You ask whether it is acceptable to indicate the country of origin on the retail carton instead of on the items themselves. If so, you would mark the carton as follows:

Blocks Made in Israel
Bag Made in China

ISSUES:

1. Whether it is acceptable to mark the country of origin on the retail carton instead of on the imported articles themselves.

2. Whether the proposed marking is acceptable.

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

Is it acceptable to mark the country of origin on the retail carton instead of on the "BAG OF BLOCKS"?

Section 134.32(d), Customs Regulations (19 CFR 134.32(d)), provides that articles for which the marking of the container will reasonably indicate the origin of the articles are excepted from marking. Without a sample retail container, we cannot determine whether this exception is applicable. Marking the retail carton in lieu of articles themselves would be acceptable if each "BAG OF BLOCKS" is imported in its own retail carton and Customs officials at the port of entry are satisfied that the "BAG OF BLOCKS" will be reach the ultimate purchaser in this marked container. If the "BAG OF BLOCKS" is packaged into retail containers after importation, you make ask the district director for approval to mark the retail container in lieu of the articles themselves after importation in accordance with the procedures set forth in 19 CFR 134.34. However, approval is subject to the district director's discretion.

Is the proposed wording "Blocks Made in Israel, Bag Made in China" acceptable?

Section 134.1(b), Customs Regulations (19 CFR 134.1(b)) defines country of origin as the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the country of origin. 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 C.C.P.A. 297, 302 C.A.D. 104 (1940)

In Headquarters Ruling Letter ("HRL") 953605, December 23, 1993, Customs ruled that the "BAG OF BLOCKS" was to be classified as mixed or composite goods pursuant to GRI 3(b), and that the blocks impart the essential character to the "BAG OF BLOCKS". As such, Customs determined that the "BAGS OF BLOCKS" is properly classified in subheading 9503.30.40, HTSUSA, the provision for "Other toys...and accessories thereof: Other construction sets and construction toys, and parts and accessories thereof: Toy building blocks, bricks and shapes."

In Treasury Decision 91-7, 25 Cust. Bull 2/3, January 16, 1991, the country of origin marking requirements for mixed or composite goods was explained. The decision notes that neither the marking statute nor the implementing regulations contains any provision regarding the marking of sets, mixtures or composite goods and that in the absence of any special requirements, the general country of origin marking requirements apply, i.e., every article that is imported into the U.S. must be marked to indicate its country of origin as determined by where the article underwent its last substantial transformation. Thus, unless the various items in the mixed or composite goods are substantially transformed as a result of their inclusion in the mixture or composite good, the country of origin of each item must be indicated. In this regard, the decision states that:

In most cases the mere inclusion of an item in a collection will not substantially transform it into an article with a new name, character or use, and therefore, each item must be separately marked with its own country of origin...This result is consistent with the purpose of the marking statute since the ultimate purchaser's decision as to whether to buy the collection might be influenced by the country of origin of any of the items in the set, whether or not an item gives the collection its essential character. However, in certain circumstances, the marking of every item in a collection of goods may not be consistent with the purpose of the statute, or may be impractical and/or undesirable. This may be because one or more items in the collection are relatively insignificant and would have no influence on the purchasing decision, because the items in the collection are too numerous making it impractical to specify the country of origin of each item, or for various other reasons. Therefore, Customs will continue to employ a "common sense" approach to determine the marking requirements applicable to articles which comprise a collection of goods.

In this case, we find that neither the blocks nor the textile bag is substantially transformed when they are combined in Israel. Each item retains its separate identity. Although the blocks provide the essential character of the whole article, we believe that the bag too is a significant component which may influence the purchasing decision. We note also that it does not appear that there are practical problems associated with marking the bag. Based on T.D. 91-7, we find that the country of origin of each item must be indicated. The country of origin of the blocks is Israel. The country of origin of the bag is China inasmuch as silk screening the words "BAG OF BLOCKS" on the otherwise finished bag in Israel does not change its name, character or use; it is merely decoration. The proposed wording clearly indicates the country of origin of each item and is therefore acceptable marking.

HOLDING:

The "BAG OF BLOCKS" must be marked to indicate that the blocks are made in Israel and that the Bag is made in China. Your proposed wording satisfies the requirements of 19 U.S.C. 1304 and 19 CFR Part 134.

The retail carton may be marked with the countries of origin of the "BAG OF BLOCKS" in lieu of the articles themselves provided the conditions set forth above are satisfied.

Sincerely,

John Durant, Director

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