HQ 559045 - Application for Further Review of Protest No. 2704-94-102213, dated August 12, 1994; Country of origin marking; 19 CFR 134.34(a); `19 CFR 134.32(d) - United States International Trade Commision Rulings

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HQ 559045

March 3, 1995

MAR-2-05 CO:R:C:V 559045 BLS

CATEGORY: MARKING

District Director
U.S. Customs Service
300 S. Ferry Street
Los Angeles, California 90731

RE: Application for Further Review of Protest No. 2704-94-102213, dated August 12, 1994; Country of origin marking; 19 CFR 134.34(a); `19 CFR 134.32(d)

Dear Sir:

This is in reference to a memorandum received by this office February 17, 1995, concerning an Application for Further Review of Protest No. 2704-94-102213. The issue concerns country of origin marking of certain fiber discs imported by SAIT Overseas Trading ("SAIT"). The protest was denied by your office on November 15, 1994.

FACTS:

The subject discs are imported in bulk, and not marked. However, the bands that are used in bulk packaging are marked with the country of origin. While SAIT resells the merchandise in its original bulk packaging, much of it is repacked by SAIT's customers before it reaches the ultimate purchasers. Protestant claims that in fact the containers used in repackaging were properly marked to indicate the country of origin, that its bulk merchandise is exempt from marking at the time of importation under Part 134, Customs Regulations (19 CFR Part 134), and that it files a repackaging certificate with each and every entry it files.

The district director has refused to authorize the exception from marking under section 134.32(d) (19 CFR 134.32(d)), which allows for exceptions from marking when the shipping containers are properly marked with the country of origin, since the conditions set forth under 19 CFR 134.34(a) (relating to repacked articles), have not been met.

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 CCPA 297 at 302; C.A.D. 104 (1940).

In order to determine the marking requirements for the discs, it is necessary to determine who is the ultimate purchaser. 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 (or, in the case of a good of a NAFTA country, purchase) the article in the form in which it is imported. In the instant case, the ultimate purchasers will be those persons who will purchase the goods from the protestant's customers. Therefore, unless otherwise excepted, the goods must be marked to indicate the country of origin to these purchasers.

However, articles for which the containers will reasonably indicate the country of origin 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). Under section 134.34(a), Customs Regulations (19 CFR 134.34(a)), however, 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 country of 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.

Counsel states that SAIT files with the District Director, Los Angeles, a repackaging certificate (pursuant to 19 CFR 134.34(a)) for every entry it files; that it also includes on its resale
invoices a statement advising its customers of their statutory responsibility to mark the bulk merchandise it intends to repackage; and that, on information and belief, all bulk merchandise imported by SAIT and sold to repackagers have been properly marked with the country of origin

The file reflects that your office has advised SAIT, prior to the subject importation, that pursuant to the provisions of 19 CFR 134.34(a), it must establish a program that would ensure that the repackaged discs would be placed in retail containers that show the country of origin. Moreover, SAIT was further advised that it would be required to ensure that Customs would have a way of verifying, through spot-check examinations, that this program was performed consistently. The file indicates that such a program has not been followed. With respect to the subject entry, the record also reflects that while SAIT stated that the customhouse broker was instructed to file repackaging certificates with its entries, no such certificate was attached to the entry, and that a Notice to Mark and Redeliver, CF 4647, was issued, but no response was made to the notice.

Under the circumstances, we find that the protestant has not complied with the requirements under 19 CFR 134.34(a), and that accordingly, there is no basis for granting the exception to the marking requirements under 19 CFR 134.32(d).

HOLDING:

Since the protestant has not complied with the requirements as set forth under 19 CFR 134.34(a), related to repacked articles, there is no basis for granting the exception to the marking requirements under 19 U.S.C. 1304 (a)(3)(D). Therefore, you are directed to deny the protest.

In accordance with section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed to your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely

John Durant, Director
Commercial Rulings Division

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