HQ 0735183 - Country of Origin Marking of Drawer Slides; Furniture kits; T.D. 91-7; 19 CFR 134.26; 19 CFR 134.34. - United States International Trade Commision Rulings

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HQ 735183

December 17, 1993

MAR-2-05 CO:R:C:V 735183 AT

CATEGORY: MARKING

Mr. John W. Cronin
National Sales Manager
TFI Corporation
240 Ryan Ave.
Chico, California 95926

RE: Country of Origin Marking of Drawer Slides; Furniture kits; T.D. 91-7; 19 CFR 134.26; 19 CFR 134.34.

Dear Mr. Cronin:

This is in response to your letter of May 21, 1993, requesting a ruling on the country of origin marking requirements for foreign manufactured drawer slides imported into the U.S. and sold as parts of unassembled furniture kits. Samples were submitted with your letter along with literature for the furniture involved and a set of instruction sheets for the same. We regret the delay in responding.

FACTS:

Your company intends to import into the U.S. foreign-made drawer slides ("slides") from Taiwan in bulk. The outer box cartons will be marked with their country of origin "Taiwan" in lieu of the slides themselves. After importation, the slide sets will be sold to distributors or manufacturers of unassembled furniture kits who will package the unmarked slides in retail boxes containing other furniture components of U.S. origin. The kits will include desks, computer workcenters, or file cabinets, and will be sold in stores in the retail boxes. The slides will comprise between approximately four and eight percent (depending upon the furniture item in question) of the total material costs of the furniture kits.

ISSUE:

Whether furniture kits containing foreign-made drawer slides must be marked to indicate the country of origin of the drawer slides.
LAW AND ANALYSIS:

The marking statute, section 304, 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.

Section 134.1(d) defines the "ultimate purchaser" generally as the last person in the United States who will receive the article in the form in which it was imported. The marking must be conspicuous to the ultimate purchaser. Here, because the slides would not be used in the manufacture of finished furniture, the ultimate purchaser is the person who buys the furniture kit at retail.

The "country of origin" for marking purposes is defined by section 134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean the country of manufacture, production, or growth of any article of foreign origin entering the U.S.

Neither the marking statute nor the Customs Regulations make any provision for the marking of sets, mixtures or composite goods. 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. See T.D. 91-7 (dated January 16, 1991).

According to T.D. 91-7, "if the materials or components are not substantially transformed as a result of their inclusion in a set or mixed or composite goods, then, subject to the usual exceptions, each item must be individually marked to indicate its own country of origin." Thus, where the slides are installed in furniture prior to retail sale, they are substantially transformed and not subject to marking. Where the slides are sold as separate parts of kits, they may constitute significant components requiring marking. As discussed in T.D. 91-7, Customs will follow a "common sense" approach in determining whether articles of foreign origin imported as parts of kits will be subject to country of origin marking.
In HQ 734737 RC (December 17, 1992), Customs applied the common sense approach in T.D. 91-7 and found that foreign-made drawer slides which were sold in unassembled furniture kits representing between 6 and 12 percent of the cost of the finished furniture were not insignificant and were required to be marked with their foreign country of origin. Similarly, in this case, we find that the imported drawer slides representing between 4 to 8 percent of the cost, must be marked with their country of origin "Taiwan. As in HQ 734737, the cost of the foreign drawer slides is not insignificant in that it represents approximately between four and eight percent of the cost of the finished furniture, depending upon the furniture item in question. Also, the drawer slides are significant and essential components of the completed furniture unit.

The required method of marking the drawer slides must be determined by reference to the condition in which they reach the ultimate purchaser. Here, the ultimate purchaser is the retail purchaser of the furniture kit. It does not appear possible in this instance for Customs to supervise the levels of distribution through which the drawer slides will pass prior to their inclusion in furniture kits, or to be sure that the containers of the kits will be marked to indicate the foreign origin of the drawer slides. For this reason, marking in bulk will not be sufficient. It is necessary to insist that the drawer slides be individually marked at the time of importation in a manner which is legible, conspicuous, and permanent. To the extent stickers are used, they must be affixed so as to remain on the article throughout distribution unless deliberately removed.

Moreover, the importer is subject to the repacking certification requirements of 19 CFR 134.26, so as to give assurance to Customs that the retail packages containing the furniture kits will be marked to indicate the country of origin of the slides.

In the alternative, as a way of avoiding the necessity of marking each slide, the importer may seek approval of local Customs officials for a repacking operation conducted under Customs supervision as provided under 19 CFR 134.34. Section 134.34, Customs Regulations (19 CFR 134.34), provides that an exception may be authorized in the discretion of the district director under 19 CFR 134.32(d) for imported articles which are to be repacked after release from Customs custody under the following conditions: (1) The containers in which the articles are repacked will indicate the origin of the articles to an ultimate purchaser in the U.S.; (2) The importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense or secures such verification, as may be necessary by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry. We do not have sufficient information, for purposes of this ruling, to determine whether such approval might be appropriate.

HOLDING:

In accordance with T.D. 91-7, the drawer slides must be marked to indicate their country of origin at the time of importation. The drawer slides must be individually marked, unless the district director at the port of entry approves the procedures set forth in 19 CFR 134.34.

Sincerely,

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