HQ 735443 - Clarification of HRL 734929; 19 CFR 134.32(j); East Asiatic Co., Inc. v. U.S., 27 C.C.P.A. 364, C.A.D. 112 (1940) - United States International Trade Commision Rulings

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HQ 735443

October 27, 1994

MAR-2-05-CO:R:C:S 735443 DEC

CATEGORY: MARKING

Mr. Dale E. Wolfer
Randy International, Ltd.
147-95 Farmers Boulevard
Jamaica, New York 11434

RE: Clarification of HRL 734929; 19 CFR 134.32(j); East Asiatic Co., Inc. v. U.S., 27 C.C.P.A. 364, C.A.D. 112 (1940)

Dear Mr. Wolfer:

This is in response to your letter dated October 26, 1993, presumably on behalf of Circuit Components, Incorporated in which you seek a clarification of Headquarters Ruling Letter (HRL) 734929, dated May 6, 1993.

FACTS:

In your request for a clarification of HRL 734929, you provided additional information with respect to your client's proposed importation. Specifically, you indicated that the bottles at issue are manufactured and silk-screened in Mexico. The bottles are to be exported to the United States to a bonded facility from which they will be shipped to various countries including Australia, England, and Belgium. The bottles are shipped and warehoused in the United States under bond for the convenience of the shipper since the United States has more frequent shipping schedules. While in the United States, the bottles may be co-mingled with domestically-manufactured bottles in a bonded facility prior to being exported to other countries. While in a foreign country, the bottles will be filled with the product for which they are designed.

ISSUE:

Are empty disposable bottles of Mexican origin that are transported in bond in the United States, placed in a bonded facility and subsequently exported without being withdrawn for consumption in the United States, subject to the country of origin marking requirements?

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 its 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. Part 134 of the Customs Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Part 134.32, Customs Regulations (19 CFR 134.32) sets forth some of the general exceptions to marking requirements. Section 134.32(j), Customs Regulations (19 CFR 134.32(j)), provides that articles entered or withdrawn from warehouse for immediate exportation or for transportation and exportation are excepted from marking requirements. This regulation does not exempt articles entered into the United States which are intended for distribution and consumption domestically. This regulation applies to situations, such as the case presented, where merchandise enters the United States or is withdrawn from a warehouse, solely for exportation or transportation and exportation to another country and is never consumed or used in the United States.

It is well established, that as a general rule, goods are considered "imported", and hence subject to the tariff statute, when they are brought within a Customs district of the United States with an intent to unlade. Hollander Co. v. U.S., 22 C.C.P.A. 645, T.D. 47632 (1935); Estate of Pritchard v. U.S., 43 C.C.P.A. 85, C.A.D. 612 (1955); Sterling Bronze Co. v. U.S., 12 Ct. Cust. Appls. 338, T.D. 40487 (1924); Mills & Gibbs Corp. v.U.S., 13 Ct. Cust. Appls. 72, T.D. 40933 (1925); and Charles T. Smith, Inc. v. U.S., 11 Ct. Cust. Appls. 39, C.D. 789 (1943). Of significance to the case at hand is the opinion in East Asiatic Co., Inc. v. United States, 27 C.C.P.A. 364, C.A.D. 112 (1940), which involved an interpretation of the word "importation" as used in the statute governing additional duties for failure to mark, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304). The court in East Asiatic stated that "import" in the tariff sense implies the bringing into the United States of foreign goods for use or consumption here. With respect to marking the court stated that:
when Congress enacted section 304(b), supra, relating to the marking of any imported goods, it had in mind merchandise which was to enter into our commerce. Unless the goods entered into our commerce, a failure to mark them would be of no concern . . .. (East Asiatic
Co., Inc., 27 C.C.P.A. at 366-67).

Based on the East Asiatic Co. decision, it follows that imported articles and their containers that are placed in a bonded warehouse to await transportation and exportation and are not destined for consumption or use in the United States should be excepted from the marking requirements of Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304).

As noted in the facts above, the importer will warehouse the bottles in a bonded facility and has no intention of entering the bottles into the commerce of the United States. The sole purpose in transporting the goods from Mexico to the United States is to allow the importer access to the more frequent shipping schedule available in the United States. Thus, consistent with the holding in East Asiatic and pursuant to the exception from marking provided for in 19 CFR 134.32(j), we find that, under the circumstances of this case, the goods and their outermost packing containers are not subject to the marking requirements of Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304). This exception is not applicable if the goods are entered for consumption, whether or not they are subsequently exported.

HOLDING:

Foreign articles and their containers that are imported, transported in bond to a bonded warehouse and then withdrawn for immediate exportation or transportation and exportation, are excepted from the marking requirements of 19 U.S.C. 1304.

This ruling letter does not modify or revoke any portion of HRL 734929 issued to Rudolph Miles & Sons, Incorporated on behalf of Circuit Components, Incorporated. This ruling is provided to you as a clarification of the application of the marking statute and regulations to imported items that are placed in a bonded warehouse and then withdrawn for immediate exportation or transportation and exportation.

Sincerely,

John Durant

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