HQ 0735279 - Country of origin marking of room air conditioners; containers; 19 CFR 134.32(d); displays - United States International Trade Commision Rulings

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HQ 735279

November 17, 1993

MAR 2-05 CO:R:C:V 735279 LR

CATEGORY: MARKING

William H. Steere
Manager, U.S. Customs Compliance
Carrier Corporation
Carrier Parkway
P.O. Box 4800
Syracuse, New York 13221

RE: Country of origin marking of room air conditioners; containers; 19 CFR 134.32(d); displays

Dear Mr. Steere:

This is in response to your letter dated July 21, 1993, regarding the country of origin marking of room air conditioners.

FACTS:

Carrier Corporation imports various models of residential room air conditioners made in Brazil and/or Mexico. Each unit is imported in its own sealed retail box. You have submitted copies of the box artwork for seven different models. The country of origin of the unit is marked on one of the side panels of the box preceded by the words "Made in". A picture of the air conditioner appears on the box, along with other pertinent information, i.e., name of the company, model number, list of features, warranty information, etc. Several of the boxes have the words "SAVE THIS CARTON FOR FUTURE STORAGE" printed across one of the panels in very large letters. You indicate that the country of origin marking appears in letters "a little over half inch high". You also note that there are no conflicting U.S. addresses. The only possible exception would be the name and address of the selling store and if that is the case, you advise that the origin appears right under the address.

The air conditioners are also marked with country of origin; however, such marking is hidden from view. You advise that such marking appears on the Serial Plate along with the model number, serial number, and ratings and that such plate is usually located behind the front bezel. The bezel is usually removed to install the unit in the window and then replaced to keep the front as clear as possible from an aesthetic and functional point of view. You advise that this is a standard location for placement of the Serials Plates.

You indicate that Carrier has a line of light commercial units that are usually sold to and installed by distributors who purchase those units in their original boxes. You state that these boxes are also prominently marked with country of origin. No samples or artwork of the boxes for the commercial units were submitted. You state that these units also have the country of origin on the name plate, along with other pertinent information, which is located under the front grill. You indicate that the front grill is usually spring loaded.

You advised us by phone that both the retail and commercial air conditioners are sold in their original sealed marked boxes. The commercial units are delivered in boxes and then installed.

Your company has received several marking notices from Laredo Customs advising that the air conditioners must be marked, even if the containers are marked. One of the notices indicates that this is because the units may be displayed out of the container. The notices also state that the marking on the air conditioners is not acceptable because a panel must be removed in order to locate the country of origin. Pending receipt of this ruling, officials in Laredo have asked you to place an additional country of origin label on the outside of air conditioner.

ISSUE:

Whether the air conditioning units described must be individually marked on the outside in order to satisfy the country of origin marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.

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.

A country of origin marking is considered to be marked in a conspicuous place if the ultimate purchaser is able to find it easily. See 19 CFR 134.41. We agree with Laredo Customs that this requirement is not satisfied if part of the unit must be removed to see the origin marking. Therefore, the question to be addressed is whether the country of origin marking on the box is sufficient.

Articles for which the marking of the containers will reasonably indicate the origin are excepted from marking pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d). This exception applies in instances where the article is imported in a properly marked container and Customs is satisfied that the ultimate purchaser will receive it in this original unopened container. In determining whether an article will remain in its original marked container until receipt by the ultimate purchaser, we consider how the product is generally sold along with the nature of the container.

We find that the air conditioners which are imported in sealed boxes similar to those depicted in the submitted artwork are designed to remain in these boxes until at least the time of sale to the ultimate purchaser. Because the boxes contain a picture of the product along with pertinent information, we are satisfied that the air conditioners will reach the ultimate purchaser in the marked box. The fact that some of the boxes even advise the purchaser to save the cartons for future storage is evidence that the boxes are designed to remain with the air conditioner even after the time of sale. Considering the nature of the product and the nature of the box, along with your representations that the product is sold in the box, marking of the container should be sufficient.

The remaining issue concerns air conditioners that could possibly be removed from their marked boxes prior to sale for display purposes. Although this situation is not mentioned in the ruling request, one of the marking notices raises this matter. The question to be addressed is whether notwithstanding the discussion above, every air conditioner should be individually marked in a conspicuous place to account for this possibility; or alternatively, whether the marking of the display models is required.

Two recent rulings involved a similar issue. In both cases, Customs did not require the imported articles to be individually marked with country of origin at the time of importation, even though some would be removed from the marked container for display purposes. However, we did require the marking of those articles that were actually displayed. In Headquarters Ruling Letter ("HRL") 732943, May 11, 1990 (C.S.D. 90-81, 24 Cust. Bull. No. 30, November 30, 1990), Customs ruled that importers of ready-to-assemble furniture would have to submit to Customs officials, at the time of importation, declarations from their retail distributors that any article or component removed from a marked container would be marked with its country of origin in order to qualify for an exception from country of origin marking. Customs indicated that this declaration was necessary to ensure that in the likely event that an article of ready-to-assemble furniture was removed from its marked container and used as a display model, the ultimate purchaser will in all circumstances be advised of the country of origin of the article or its components. The ruling noted that in some cases the furniture could be delivered to the purchaser's home so that all it would view prior to purchase would be the item on display.

HRL 734499, June 19, 1992, also involved the importation of unassembled articles (weight sets) in a marked retail box. Although most of the weight sets are designed to remain in the retail boxes for sale to the ultimate purchaser, the importer advised that some of the sets will be assembled and displayed in its showroom stores. The importer proposed marking the items that are removed from the boxes and displayed in its stores with the country of origin by means of a hang tag attached to the weight set. Customs determined that in such circumstances it was unnecessary to mark each individual item with its country of origin.

The rulings discussed above requiring marking of the display models are distinguishable from the circumstances presented here. In both those rulings, there was a reasonable possibility that the ultimate purchaser would not receive the imported article in its marked container prior to purchase. We note that in both of these cases, the articles were imported in an unassembled fashion for assembly by the consumer after purchase. In these circumstances, it is quite common for the retailer to display an assembled model in the showroom to be viewed by its customers. In some cases, the display model may also be available for sale. It would be unusual for the consumer to receive these assembled items in the original marked boxes in which the unassembled components were imported. In addition, in HRL 732943 some of the furniture was delivered to the home of the ultimate purchaser after purchase without ever seeing the marked box. For these reasons, marking of the display items was warranted. In contrast, the air conditioners imported by Carrier are imported completely assembled. Even if one were to be removed from its box for display purposes, it would be easy to replace it into its marked box prior to sale. Considering the nature of the product and the box, we believe that this is likely to occur. There is also no indication that delivery of the subject air conditioners to the homes of the ultimate purchasers is common or that the ultimate purchasers would not view the marked box in the store prior to delivery.

We consulted with the National Import Specialist concerning this case. He indicated that even where the consumer bases its decision to purchase on the display model, he thought that the marking of the country of origin on the box is sufficient because the ultimate purchaser would receive the air conditioner in such box prior to purchase.

After careful review, we conclude that marking the country of origin on the boxes in lieu of the air conditioners themselves at the time of importation is sufficient. Because of the nature of the product and the box in which it is imported, we believe that it is highly unlikely that any of the air conditioners will be sold without their box; even those that are removed for display purposes. We are satisfied that the ultimate purchaser will have the opportunity to view the marked box prior to purchase and that marking of each unit or the display models is not essential.
Therefore, as long as the country of origin marking on the boxes is legible, conspicuous and permanent, we find that the requirements of 19 U.S.C. 1304 and 19 CFR Part 134 are satisfied. Although it appears from the submitted artwork that the country of origin marking on the boxes meets these requirements, without an actual sample, we cannot make a definite determination.

Assuming that Carrier's commercial air conditioners are imported and sold to the ultimate purchasers in sealed boxes similar to the ones described above, the marking of those boxes in lieu of the air conditioners would also be acceptable.

HOLDING:

Assuming the air conditioners described above are imported in boxes like those depicted in the submitted drawing, that such boxes are properly marked with country of origin, and that the air conditioners are sold in the manner described above, individual marking of the outside of the units is not required in order to satisfy the requirements of 19 U.S.C. 1304 and 19 CFR Part 134.

Sincerely,

John Durant, Director

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