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HQ 735239

January 28, 1994

MAR-2-05 CO:R:C:V 735239 RSD

CATEGORY: MARKING

R.J. Kieber, President
Mid-America Golf Supply
Route 1 Box 241
Le Sueur, Minnesota 56058

RE: Country of origin marking for pencils used to keep score on golf courses; printing; marking after importation; certification; ultimate purchaser; container marking; 19 CFR 134.32(d) 19 CFR 134.34

Dear Mr. Kieber:

This is in response to your letter dated June 30, 1993, concerning pencils distributed by golf courses for the purpose of keeping score. We have received samples of the pencils. We regret the delay in responding.

FACTS:

Mid-America Golf Supply imports 3.5 inch and 7 inch pencils for golf courses. The 7 inch pencils will be cut into two 3.5 inch pencils before they are distributed to the golf courses. The pencils are hexagon shape. They will be printed in the United States with one to three lines of information, such as the name of a golf course and a telephone number.

The pencils are sold to golf courses who are supposed to give them away free to their customers. They are not intended to be resold. In fact, you indicate that anyone, customer or not, can walk into the golf shop and request a scorecard and a pencil and they will be given one free of charge. Many individuals also collect the pencils.

You claim the pencils cannot be marked with their country of origin prior to importation. This is because there is no method or machine that can determine which of the hex sides of the pencils will be printed as they run through the printing machine. Therefore, when they are printed in the United States, many pencils would have any existing marking printed over. This would render these pencils unsightly and unsalable.

You indicate that the pencils are distributed in a small box which contains a gross of pencils. This box will be marked with the country of origin of the pencils. Your position is that everyone who takes a pencil will see the box and thus be able to read the country of origin marking on the box. Therefore, you want to mark only the box instead of marking each pencil.

ISSUE:

Are the individual pencils excepted from marking if the box, in which they are distributed in, is marked to indicate their country of origin?

May the pencils be marked with their country of origin after importation?

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 its 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 is the product. The evident purpose 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 at 302; C.A.D. 104 (1940).

In order to determine the marking requirements of the pencils, it is necessary to determine who is their ultimate purchaser. Part 134 Customs Regulations (19 CFR Part 134), implements the country of origin marking regulations and exceptions of 19 U.S.C. 1304. Section 134.1(d), Customs Regulations, (19 CFR 134.1(d)) defines ultimate purchaser as generally the last person in the U.S. who will receive (or, in the case of a NAFTA country, purchase) the article in the form in which it is imported. 19 CFR 134.1(d)(4) indicates that, unless the good is a good of a NAFTA country, if the imported article is distributed as a gift the recipient of the article is the ultimate purchaser. Therefore, assuming the pencils are not goods of a NAFTA country, in this case the ultimate purchaser of the pencils is their recipients not the golf courses. Consequently, the pencils must be marked to indicate their country of origin to their recipients.

Instead of marking each pencil, you want to mark the box filled with a gross of pencils, in which the pencils are supposed to be distributed. Articles for which the marking of the containers will reasonably indicate the origin of the articles are excepted from marking under 19 U.S.C. 1304(a)(3)(D). For an exception to be granted under 19 U.S.C. 1304(a)(3)(D), the article must generally be imported in the container and that container must generally reach the ultimate purchaser unopened. See also 19 CFR 134.32(d).

The pencils will not reach the ultimate purchaser in sealed containers. Although some recipients will have an opportunity to observe the country of origin marking on the box, it is not certain that all the recipients of the pencils will see such a marking. Customs has no way of verifying that in all cases the pencils will be distributed to the ultimate purchaser only in the gross size box. It is also possible that marking on the box will be turned around or will be obscured so that the ultimate purchaser will not have a chance to read it. Accordingly, we find that the pencils are not excepted from the country of origin marking requirements of 19 U.S.C. 1304 by marking the boxes under 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d).

Normally, articles of foreign origin imported into the United States must marked be with their country of origin at the time of their importation. However, in certain circumstances Customs has recognized that it is necessary to allow articles to be marked after importation. For example, in HQ 735111 (October 15, 1993), we ruled that plastic pens could not be marked prior to importation because of practical problems associated with the plastic molds used to make the pens. Similar problems exist in this case, because there is no way of knowing on which of the hex sides the printing will occur when a golf course name and other information is printed on the pencils in the United States. Requiring each pencil to be marked with its country of origin before importation would result in a large number of pencils having the country of origin marking printed over. Therefore, we find that it is acceptable for the pencils to be marked with their country of origin after importation at the same time the other information is printed on the pencils. The procedures set forth in 19 CFR 134.34 should be followed.

19 CFR 134.34 provides that an exception under 19 CFR 134.32(d) may be authorized in the discretion of the district director 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 willindicate the origin of the articles to an ultimate purchaser in the United States.

(2) The importer arranges for supervision of the marking of the containers by Custom 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.

In HQ 735292 (September 21, 1993), Customs indicated that although 19 CFR 134.34 sets forth the procedures to be followed when unmarked imported articles are to be repacked into marked containers after importation, these procedures would also be appropriate in situations when it was necessary to have articles marked after importation because of practical considerations. The purpose of these procedures is to ensure that articles which are not adequately marked at the time of importation due to practical problems are properly marked after importation before they reach the ultimate purchaser. In this case, we believe that due to the problems involved in printing the pencils prior to importation, the procedures of 19 U.S.C. 134.34 should be applied to permit marking after importation.

HOLDING:

Assuming the pencils are not goods of a NAFTA country, the ultimate purchasers of the pencils are their recipients. Marking only the boxes filled with a gross of pencils is not sufficient to indicate the country of origin of the pencils to their ultimate purchasers. Therefore, the imported pencils are not excepted from marking under 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d). The pencils can be marked after importation at the same time the other information is printed on the pencils, provided that Customs officials at the port of importation are satisfied that the pencils will reach the ultimate purchaser properly marked and the provisions of 19 CFR 134.34 are satisfied.

Sincerely,

John Durant, Director

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