HQ 558755 - Country of origin marking of integrated circuits; Multiple countries of origin; - United States International Trade Commision Rulings

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HQ 558755

January 18, 1995

MAR-2-05 CO:R:C:S 558755 DEC

CATEGORY: MARKING

Mr. George R. Tuttle, III
Law Offices of George R. Tuttle
Three Embarcadero Center - Suite 1160
San Francisco, California 94111

RE: Country of origin marking of integrated circuits; Multiple countries of origin;
T.D. 75-187; T.D. 71-296(1); Abbreviations of countries; 19 CFR 134.45

Dear Sir:

This is in response to your letter dated September 13, 1994, on behalf of your client, Microchip Technology Incorporated (MTI), concerning the country of origin marking requirements of integrated circuits. This ruling only addresses the propriety of the proposed alternative listing of multiple countries or origin for the integrated circuits and presumes the countries of origin listed are the proper countries of origin.

FACTS:

MTI develops, manufactures, and markets various integrated circuits used for high-volume embedded control applications in consumer, automotive, office automation, communications, and industrial products. MTI's sales are divided between original equipment manufacturers who incorporate the integrated circuits into electronic assemblies and to distributors who resell the integrated circuits to manufacturers and other end users who incorporate them into their products.

MTI manufactures integrated circuits on wafers at its Arizona facilities. After testing, the wafers are exported and individual die are assembled and encapsulated (commonly referred to as "packaging") for export. MTI assembles and tests most of its products at their facility in Taiwan. However, an increasing percentage of MTI's products is assembled in other countries such as Korea, Hong Kong, Malaysia, People's Republic of China, Thailand, Indonesia, and the Philippines. MTI's integrated circuits are each marked and/or embossed with the name of the country where the assembly occurred. Integrated circuits assembled in countries other than Taiwan are shipped to the Taiwan facility where they are held in inventory pending shipment to customers.

After testing, nearly all of MTI's integrated circuit products are volume packaged in either translucent plastic tubes (containing up to 100 integrated circuits), on tape-and-reel carriers (containing 900-3300 integrated circuits), specialty trays, or in boxes. Since only lots from one assembler are tested at a time and the integrated circuits are packaged immediately after testing, the origin of the devices contained in these particular packages is the same.

Products leaving MTI's Taiwan facility are packaged in inner and outer shipping cartons. The inner cartons that are used in conjunction with the tube carriers are capable of holding up to 160 tubes. An inner carton designed for the tape-and-reel carrier contains either one or two reels. The outer shipping carton contains up to six inner cartons. MTI's production process, as described by counsel, involves the packaging of integrated circuits all with a particular country of origin into tubes, tape-and-reel carriers, specialty trays, or in boxes. MTI does not currently mix integrated circuits that are from different countries of origin in the same inner carton. However, it is possible that inner cartons containing integrated circuits of various origins will be combined within a single outer shipping carton.

Currently, MTI hand marks the tubes, reels, and trays with the name of the country of assembly of the integrated circuits after they are inserted into or on their respective carrier. In cases where the tubes, reels, or trays are wrapped in antistatic and vacuum sealed bags, MTI places a sticker or other label on the bag. The inner cartons are also hand marked with the country of assembly of the devices packaged in the box. Outer shipping cartons are marked with a single country of origin if all of the articles contained in the carton are the same. If there are inner cartons of differing origins, the outer carton will be left blank with respect to the country of origin.

Typically, the outer carton is shipped to the customer without being opened after it arrives in the United States at a centralized location. In circumstances where an outer carton contains inner cartons intended for different customers, the outer cartons are broken down and the inner cartons are shipped to the individual customers. Customers who resell MTI products are advised in writing, pursuant to section 134.26, Customs Regulations (19 CFR 134.26), of their obligation to ensure that any repackaged MTI product is in a properly marked container.

MTI is requesting a ruling as to whether it may cease marking the tubes, reels, and trays with the specific country of origin of the integrated circuits while continuing to mark the individual integrated circuits with their actual country of origin. MTI proposes to mark the inner and outer shipping containers with either of the following all-inclusive country of origin marking:

1. MADE IN ONE OR MORE OF THE FOLLOWING COUNTRIES: TAIWAN, KOREA, HONG KONG, MALAYSIA, PRC, INDONESIA, PHILIPPINES, OR THAILAND

2. ARTICLES CONTAINED IN THIS CARTON ARE MARKED WITH THEIR ACTUAL COUNTRY OF ORIGIN, WHICH MAY BE ONE OR MORE OF THE FOLLOWING COUNTRIES: TAIWAN, KOREA, HONG KONG, MALAYSIA, PRC, INDONESIA, PHILIPPINES, OR THAILAND.

For purposes of this ruling, the Customs Service is assuming that the country of assembly of the integrated circuits is the country of origin. In addition, Customs is assuming that the manufacturers who use the integrated circuits in the production of their products are the ultimate purchasers of the integrated circuits.

ISSUE:

Whether MTI's proposed method of marking the individual integrated circuits together with a disjunctive multiple country of origin marking on the outermost containers is acceptable pursuant to 19 U.S.C. 1304 and part 134, Customs Regulations (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 United States 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 United States 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, 302 (1940). Part 134 of the Customs Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. ?1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b), mandates that the ultimate purchaser in the United States must be able to find the marking easily and read it without strain.

Customs has allowed an alternative country of origin marking statement similar to the marking you have proposed. In Headquarters Ruling Letter (HRL) 734101, dated

July 9, 1991, we allowed toys sold inside plastic eggs in a vending machine to be individually marked with the actual country of origin, but since this was not visible, to have the machine marked "The Toys Contained In This Machine Are Marked With The Country Of Origin, And May Be Made In One Or More Of The Following Countries: Hong Kong Taiwan China". In that case, like the present case, the items themselves are marked with the actual country of origin but the packaging contains the alternative country of origin designations.

Section 134.45(b)(2), Customs Regulations (19 CFR 134.45(b)(2)), provides that:

Abbreviations which unmistakably indicate the name of a country, such as "Gt. Britain" for "Great Britain" or "Luxemb" and "Luxembg" for "Luxembourg" are acceptable. Variant spellings which clearly indicate the English name of the country of origin, such as "Brasil" for "Brazil" and "Italie" for "Italy," are acceptable.

Customs has determined that articles manufactured in the People's Republic of China shall be marked using the legend "The People's Republic of China", "People's Republic of China", or by use of the short-form name "China". Therefore, the proposed country of origin legends need to be amended to incorporate one of these three approved markings for products of Chinese origin. T.D. 71-296(1). Accordingly, Customs is satisfied that the proposed country of origin marking:

ARTICLES CONTAINED IN THIS CARTON ARE MARKED WITH THEIR ACTUAL COUNTRY OF ORIGIN, WHICH MAY BE ONE OR MORE OF THE FOLLOWING COUNTRIES: TAIWAN, KOREA, HONG KONG, MALAYSIA, PEOPLE'S REPUBLIC OF CHINA, INDONESIA, PHILIPPINES, OR THAILAND
is acceptable subject to the requirements of section 134.45, Customs Regulations (19 CFR 134.45).

Customs has addressed the issue of multiple country of origin marking requirements for integrated circuits. T.D. 75-187. In T.D. 75-187, Customs allowed a disjunctive listing of multiple countries of origin when the articles (semiconductor devices, including transistors, diodes, and integrated circuits) were commingled for a bona fide reason, and subsequently repackaged for sale to an ultimate purchaser. This determination was based on the situation where a manufacturer would commingle many devices of the same type from various countries during the testing and symbolization marking process. MTI's production process, as described by counsel,
involves the packaging of integrated circuits all with a particular country of origin into tubes, tape-and-reel carriers, specialty trays, or in boxes. Since MTI's production process does not involve the commingling of the integrated circuits as described in T.D. 75-187, Customs will not permit the outermost containers to reach the ultimate purchaser to be marked "made in one or more of the following countries."

HOLDING:

MTI may cease marking tubes, reels, and trays with the specific country of origin of the integrated circuits when the outermost container that reaches any ultimate purchaser of the integrated circuits is marked with the following all-inclusive country of origin marking:

ARTICLES CONTAINED IN THIS CARTON ARE MARKED WITH THEIR ACTUAL COUNTRY OF ORIGIN, WHICH MAY BE ONE OR MORE OF THE FOLLOWING COUNTRIES: TAIWAN, KOREA, HONG KONG, MALAYSIA, PEOPLE'S REPUBLIC OF CHINA, INDONESIA, PHILIPPINES, OR THAILAND
provided that all other applicable requirements of the marking statute are met.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer.

Sincerely,

John Durant
Director, Commercial Rulings Division

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