HQ 0735318 - Country of origin marking for imported faucets and pre- rinse units repackaged in the U.S.; 19 CFR 134.46; 19 CFR 134.32(d) - United States International Trade Commision Rulings

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HQ 735318

October 18, 1993

MAR-2-05 CO:R:C:V 735318 AT

CATEGORY: MARKING

Jeffrey W. Lorell, Esq.
Clapp & Eisenberg
One Newark Center
Newark, New Jersey

RE: Country of origin marking for imported faucets and pre- rinse units repackaged in the U.S.; 19 CFR 134.46; 19 CFR 134.32(d)

Dear Mr. Lorell:

This is in response to your letters dated July 7, July 22, and August 19, 1993, on behalf of Component Hardware Group (CHG), requesting a prospective ruling pursuant to 19 CFR Part 177 concerning the country of origin marking requirements applicable to the importation and repackaging of components for "Encore" faucets and pre-rinse units. Representative samples of the repackaged products were submitted with your letter.

By letter dated July 22, 1993, you informed this office that the appropriate country of origin marking for CHG's Encore line of faucets and pre-rinse units is one of several issues raised in an action before the United States District Court for the District of New Jersey entitled T&S Brass and Bronze Products, Inc. v. Component Hardware Group, Inc., et al. You also advise that the repackaging program which is the subject of this ruling request has already been implemented with local Customs at the port of entry (JFK Airport), that a certification in that regard has been filed and approved, and that there is no dispute with Customs over any current transaction. A copy of the certification was submitted with your letter.

The conditions provided in section 177.7(b), Customs Regulations (19 CFR 177.7(b)) must be satisfied for issuance of a binding ruling to be appropriate in this case. That section provides in part that:
no ruling letter will be issued with respect to any issue which is pending before the United States Court of International Trade, the United States Court of Federal Appeals for the Federal Circuit, or any court of appeal therefrom. Litigation before any court will not preclude the issuance of a ruling letter, provided neither the Customs Service nor any of its officers or agents is named as a defendant.

Based on your representations, we find that the conditions of 19 CFR 177.7(b) are satisfied. The marking issue is not before either the U.S. Court of International Trade nor the U.S. Court of Appeals for the Federal Circuit, and neither the Customs service or any of its officers or agents are named as defendants. Accordingly, issuance of a binding ruling for prospective transactions is appropriate in this case.

FACTS:

You state that CHG distributes specialty hardware and related fixtures for use in commercial and industrial kitchens. The "Encore" line of products consists of sink faucets and pre- rinse units. The faucets of the "Encore" line are represented by models K-51 and K-54. The pre-rinse units are generally either model K-50 or K-53.

The components in the "Encore" product line are manufactured in Taiwan and imported in bulk into the U.S. by CHG. You state that the immediate containers and import shipping containers are marked "Made in Taiwan" but the individual components are not marked to indicate their origin. The components are placed in inventory prior to repackaging.

Product Description

Components for the faucets (models K-51 and K-54) include the spout and faucet body. The K-54 also features couplings. The faucet body, including handles, valve stem, packing, and washers, is pre-assembled in Taiwan. The faucet body is disassembled and reassembled in the U.S. only if the mechanism is faulty.

The pre-rinse units (models K-50 and K-53) consist of a hose assembly, wall bracket assembly, faucet body, spring, riser pipe, and hook. The hose assembly, consisting of four basic parts (shroud and inner rubber hose, spray head, grip and spring retainer), is assembled by CHG in the U.S. prior to repackaging. The spray head is pre-assembled in Taiwan with disassembly and reassembly only if necessary. The wall bracket assembly consists of wall bracket clamp, nipple, and base. The faucet body is pre- assembled in Taiwan.

Repackaging Operation

(1) Faucets: Faucets, consisting of spout, faucet body, and couplings (in the case of K-54) are placed on a cardboard insert, but not joined together. An adhesive country of origin label (bottom label) is placed on the insert printed with the following language:

"CRAFTED IN TAIWAN
Specified, tested and packaged by
Component Hardware Group, Inc., Lakewood, N.J."

The words "Crafted in Taiwan" are printed in bold blue capital lettering approximately 7 point (a point is a unit of type measurement equal to 0.01384 inch or nearly 1/72 inch). The phrase "Specified, tested and packaged by Component Hardware Group, Inc., Lakewood, N.J." is printed in blue lettering approximately 7 point. Directly above the origin label appears a second label (top label) printed with the statement "Component Hardware Group Inc., Lakewood, N.J." in white lettering approximately 3 point.

This language "CRAFTED IN TAIWAN/Specified, tested and packaged by Component Hardware Group, Inc., Lakewood, N.J." also appears on a hang tag tied by elastic string to the stem of the faucet body which is tucked underneath so that it will survive the effect of the heat and adhesive of the shrinkwrapping or removal of the shrinkwrapping.

The faucet components are then shrinkwrapped against the cardboard insert. The insert is then placed inside a cardboard box, which is printed with the phrase "Encore by CHG" on the top panel. An adhesive label is affixed on the outside of the box on a side panel which identifies the model number and repeats the language on the insert: "Crafted in Taiwan/Specified, tested and packaged by Component Hardware Group, Inc., Lakewood N.J.". This phrase is printed in white lettering approximately 5 point. The words "Component Hardware Group" appear on the opposite panel and back panel. On the bottom of the box the words "Pennsauken, N.J." appear in white lettering as part of the box maker's certificate. You state that all the boxes will be taped shut.

(2) Pre-rinse units: The hose assembly, faucet body, wall bracket assembly, spring riser pipe, and hook are positioned unjoined on a cardboard insert, shrinkwrapped, and placed in a cardboard box. The box is marked in the same fashion as the faucets, except that there are two cardboard inserts instead of one. Each insert has an adhesive label (bottom label) attached to it marked with the country of origin in the same manner as the origin labels used for the faucets. Also, directly above each origin label appears a second label (top label) marked identical to the ones used with the faucets. An instruction/warranty sheet is included in each box which contains two references to the CHG street and post office address "1890 Swarthmore Ave., P.O. Box 1582, Lakewood, N.J. 08701" in connection with the "Limited Warranty" information, a telephone number, facsimile number, and the phrase "Printed in U.S.A.

You state that Encore line products are sold by CHG to either industrial or commercial sink manufacturers (original equipment manufacturers or "OEMs") who, in turn, sell to food service equipment dealers or restaurants or commercial kitchens or cafeterias. Alternatively, CHG may sell to distributors who sell to food service equipment dealers who, finally, also sell to restaurants or commercial kitchens and cafeterias. Installation may be performed either by the OEM's, dealers, or contractors hired by the end users.

You assert that the CHG box with shrinkwrapped components inside is likely to reach the installation site inasmuch as the packaging: 1) protects the finish of the product, and 2) identifies the product for the installers, and 3) transports the product components intact for installation.

Replacement Parts

You state that any replacement parts which CHG sells are imported separately in shipping cartons marked "Made in Taiwan". As imported, the components inside are generally wrapped in polybags which are not marked except for a number. Following importation the polybagged replacement parts are placed in bins. When sold, CHG has certified that the polybags will contain labels or cards sealed inside which contain country of origin information. No sample was submitted for our review.

ISSUES:

Whether it is acceptable to mark the cardboard inserts and outside boxes in which the imported faucets and pre-rinse units are repackaged with the country of origin in lieu of marking the article itself?

Whether the country of origin marking on the cardboard insert and outer box containing imported faucets and pre-rinse units and marked in the manner described above satisfies the 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. 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 the article in the form in which it was imported." In this case, the ultimate purchaser of the faucets or pre-rinse units is either the restaurant, commercial kitchen or cafeteria which is the institution where the product is installed. See C.S.D. 91-5 (1991); (auto repairmen who install foreign parts in cars are the ultimate purchaser of those parts).

Are The Faucets and Pre-rinse Units Excepted From Marking?

An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. However, since the faucets and pre-rinse units are not imported in the shrinkwrapped cardboard insert and box, whether the subject articles are excepted from individual marking under 19 CFR 134.32(d) is for the district director to decide. In this regard 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. In this case, as supported by a copy of the repackaging certificate submitted, it appears that the district director has determined that the faucets and pre-rinse units may be excepted from individual marking under 19 CFR 134.32(d), provided they are marked in the manner described above and the conditions of 19 CFR 134.34 are satisfied.
Assuming that the district director remains satisfied that the imported faucets and pre-rinse units will be repacked in the manner set forth below, and that the other conditions set forth in 19 CFR 134.34 are met, the district director may authorize an exception under 19 CFR 134.32(d), in which case marking of the faucets and pre-rinse units themselves would not be required.

The Marking of the Repacked Article

In determining whether the marking is acceptable, Customs will take into account the presence of words or symbols on an article which may mislead the ultimate purchaser as to the country of origin. Consequently, if the words "United States," or "America," the letters "U.S.A.," any variation of such words or letters, or the name of any city or locality other than the country of origin appear on the imported article, special marking requirements are triggered. See, 19 CFR 134.46

The special marking requirements set forth in section 134.46 are triggered by the presence of the words "Lakewood N.J." printed on the labels (top and bottom label) affixed to the shrinkwrapped insert (faucet) or inserts (pre-rinse unit), on the label affixed to the side panel of the box and the hang tag affixed to the faucet body. Accordingly, the actual country of origin of the faucets and pre-rinse units must appear "in close proximity" to the U.S. reference and in lettering of at least a comparable size. Customs ruled in HQ 732689 (December 7, 1989), that the phrase "Crafted in" is an acceptable country of origin marking for purposes of 19 U.S.C. 1304. The words "Crafted in Taiwan" which appear on the bottom label affixed to the insert(s) and side panel of the box are in close proximity to the U.S. reference "Lakewood, N.J." Also, although the U.S. reference printed on the top label does not have the origin marking "Crafted in Taiwan" printed on it, the bottom label marked "Crafted in Taiwan" is directly below the top label which we find to be in close proximity to the top label. The marking "Crafted in Taiwan" printed on the hang tag affixed to the faucet body also is in close proximity to the U.S. reference. In all cases, the words "Crafted in Taiwan" are in lettering of at least in a comparable size as the U.S. reference "Lakewood, N.J.". Also, the faucet is marked with the country of origin by means of a hang tag. Based on these considerations, we find that the marking "Crafted in Taiwan" printed on the bottom label affixed to the insert(s) and the side panel of the box, and a hang tag affixed to the faucet body, satisfies the marking requirements of 19 CFR 134.46 and is an acceptable country of origin marking for the imported faucets and pre-rinse units. With respect to the U.S. references "1890 Swarthmore Ave., P.O. Box 1582, Lakewood, N.J. 08701" and "Printed in U.S.A." which appear on the installation/warranty sheet and "Pennsauken, N.J." printed on the bottom of the box, we find that these U.S. references do not trigger the special marking requirements of 19 CFR 134.46. In C.S.D. 90-31 (December 20, 1989), Customs indicated that under certain conditions geographic names appearing in connection with imported articles do not necessarily trigger the requirements of 19 CFR 134.46. In that decision, Customs cited to several rulings including HQ 732329 (July 12, 1989), (address on a warranty card did not pose a risk of confusion to ultimate purchaser) and HQ 732816 (November 24, 1989), (address printed on display ticket was provided to assist customer in the event of questions concerning guarantees) where it was decided that the context in which the names and addresses were used was such that confusion regarding country of origin was not conceivable. In more recent rulings, Customs determined that certain information provided to enable customers to contact the company regarding complaints or questions about the product did not trigger the requirements of 19 CFR 134.46. (See, HQ 733840, (February 1, 1991), (where garment hang tags, which included a telephone number of the company and language which invited the customer to contact the company for informational purposes, did not trigger the requirements of 19 CFR 134.46). In the instant case, neither the U.S. references printed on the warranty/ installation sheet nor the U.S. reference printed on the bottom of the box triggers the requirements of 19 CFR 134.46. The U.S. address "1890 Swarthmore Ave., P.O. Box 1582, Lakewood, N.J. 08701" printed on the installation/warranty sheet does not connote origin but rather clearly invites the customer to contact the company for product information, thereby dispelling any potential confusion regarding country of origin.

HOLDING:

Assuming the district director authorizes an exception from marking the faucets and pre-rinse units pursuant to 19 CFR 134.32(d) and 19 CFR 134.34, the proposed method of marking described above satisfies the requirements of 19 U.S.C. 1304 and 19 CFR Part 134.

Sincerely,

John Durant, Director

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