HQ 0735175 - Application for Further Review of Protests No. 3401-93- 100007, No. 3401-93-100008, and No. 3401-93-100009 concerning country of origin marking of imported fur hats and imitation fur; marking duties; failure to mark. - United States International Trade Commision Rulings

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HQ 735175

September 8, 1993

MAR-2-05 CO:R:C:V 735175 RC

CATEGORY: MARKING

District Director of Customs
Pembina, North Dakota 58271

RE: Application for Further Review of Protests No. 3401-93- 100007, No. 3401-93-100008, and No. 3401-93-100009 concerning country of origin marking of imported fur hats and imitation fur; marking duties; failure to mark.

Dear Sir:

This is in response to your memo forwarding Applications for Further Review of the above protests dated April 8, 1993, submitted by Janice Beattie, (atty-in-fact), on behalf of H.A. & J.L. Wood, Inc., the importer, against your decision to assess marking duties in connection with two entries of imported fur hats and one entry of imitation furs. Although protestant also requests further mitigation of the liquidated damages claim, a supplemental petition and not a protest is the appropriate remedy.

FACTS:

(1) Entry for 480 fur hats imported from Canada was made on October 7, 1992. On October 28, 1992, a notice of marking/redelivery (CF 4647) was issued for failure to indicate the country of origin marking on the merchandise or the containers as required under 19 U.S.C. 1304 and 19 CFR 134.11. The importer neglected to complete the certification block indicating that the merchandise had been marked and subsequently released the articles. They were not redelivered to Customs for supervised marking. Marking duties in the amount of 10 percent of the dutiable value of the merchandise were assessed. Protestant claims that the assessment of marking duties was improper because the importer was not made aware of any marking problem and seeks relief based upon protestant's past performance to correct improper markings in a timely manner. It is claimed that the importer did not receive the CF 4647 dated October 28, 1992, until a duplicate was sent by Customs on December 10.

(2) Entry for 198 fur hats imported from Canada was made on October 15, 1993. On November 2, 1992, a notice of marking/redelivery (CF 4647) was issued because there was no country of origin marking on the merchandise or the containers as required under 19 U.S.C. 1304 and 19 CFR 134.11. The importer neglected to complete the certification block indicating that the merchandise had been marked and subsequently released the articles. The subject merchandise was not stored, nor redelivered to Customs for supervised marking. However, the importer submitted affidavits from certain subsequent transferees which state that country of origin labels were sewn onto the imported articles. Marking duties in the amount of 10 percent of the dutiable value of the merchandise were assessed. Protestant claims that the assessment of marking duties was improper because the merchandise in question had been marked promptly and accurately after importation.

(3) Entry for 33 imitation furs imported from an unspecified country was made on August 28, 1992. Also on August 28, 1992, a notice of marking/redelivery (CF 4647) was issued because there was no country of origin marking on the merchandise or the containers as required under 19 U.S.C. 1304 and 19 CFR 134.11. The importer signed the certification block and indicated with a stamp "'EXEMPT FROM MARKING' Use by the importer 304 (H), (G), & (F)". On September 16, 1992, Customs issued a letter to the importer stating that it was unable to ascertain exactly which exception was being claimed 304 (h), (g), or (f); and that the importer did not submit any information to validate any of the exceptions. The letter further stated that the 33 rolls of fabric must be marked or redelivered. The importer released the articles and never redelivered them to Customs. Marking duties in the amount of 10 percent of the dutiable value of the merchandise were assessed. Protestant claims that the assessment of marking duties was improper because the merchandise in question qualified for an exception from marking because it was to be used in the manufacturing of coats by Sajon, Ltd. In a letter dated December 23, 1992, Sajon stated that the fur was for its own use and that it was aware of the country of origin.

In each case, the date of liquidation was January 8, 1993.

ISSUE:

Whether the assessment of marking duties is proper in these instances.

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 in to 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 manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. 19 U.S.C. 1304(f) provides that 10 percent marking duties shall be levied, collected and paid if an imported article is not properly marked with the country of origin at the time of importation and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.

Part 134, Customs Regulations (19 CFR 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 HQ 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, and

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

In this case, the assessment of marking duties is proper due to the fact that both prerequisites cited above are present. The record indicates that in each instance the subject merchandise was not legally marked at the times of importation. The marking notices issued by Customs on the respective dates indicate that neither the articles nor their containers were marked. Protestant has not provided any proof that the merchandise was properly marked under Customs supervision prior to liquidation. In the absence such proof, we find that the merchandise was not properly marked under Customs supervision. Also, protestant has not established that the articles in question qualified for one of the exceptions from marking. No details were provided either at the time the CF 4647 was filed or now regarding its claimed exceptions.

In the first instance, Protestant claims that it did not receive the marking notice in a timely manner. However, there is no way for Customs to verify this claim. In the second instance, Protestant claims that the labels were indeed sewn in and submitted affidavits to this effect. However, the labeling was not performed under Customs' supervision, prior to liquidation. Thus, Customs had no way to verify this claim either. In the third instance, Protestant claims that the goods were entitled to exception from marking because they were to be used in manufacturing coats. However, this consideration depends upon the exact nature of the processing performed. The importer did not furnish these details. Furthermore, the importer did not respond to Customs letter of September, 1992, so Customs has no way to verify this claim. Lastly, pertinent information was not provided to Customs prior to liquidation. It should also be noted that even if the processing performed by Sajon, Ltd. was sufficient to render it the ultimate purchaser, the marking of the containers would have been required. See 19 CFR 134.35.

HOLDING:

The assessment of marking duties in these instances was proper due to the fact that the merchandise was not legally marked at the time of importation nor was it subsequently marked under Customs supervision prior to liquidation. Accordingly, the protest should be denied. A copy of this decision should be attached to the Customs Form 19, to be sent to the protestant.

Sincerely,

John Durant, Director

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