HQ 735554 - Country of origin marking requirements for imitation precious or semiprecious stones imported from Canada; Article 509; NAFTA Marking Rules; section - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 735137 - HQ 950208 > HQ 735554

Previous Ruling Next Ruling
HQ 735554

February 3, 1995

Mar-2-05 CO:R:C:S 735554 AT

CATEGORY: MARKING

Mr. David Kennedy
W.Y. Moberly, Inc.
P.O. Box 164
Sweetgrass, Montana 59484

RE: Country of origin marking requirements for imitation precious or semiprecious stones imported from Canada; Article 509; NAFTA Marking Rules; section
134.1(d) of the interim regulations; section 102.11(a) and (b) of the interim regulations.

Dear Mr. Kennedy:

This is in response to your letter dated December 6, 1993, to Customs in New York, on behalf of Jupiter Crystal Collectibles ("Jupiter") requesting the tariff classification and country of origin marking requirements of "Good Vibes Crystal: Rainbow Maker" imported from Canada. Your classification request was addressed in HQ 955614 (March 24, 1994). A sample was submitted with your letter. We regret the delay in responding.

FACTS:

According to your submission, the "Good Vibes Crystal: Rainbow Maker" (crystal products) are in the shape of various ornaments, i.e., ball, drop, and pendant. You describe the crystal products as being made from 32% full leaded Austrian crystal, which is cut and drilled in Austria. In Canada, nylon line is strung through the drilled hole and it is packaged for sale in the U.S.

The sample crystal product is pendant shaped and has a clear piece of nylon strung through a hole at the top of the crystal. The article is affixed to a cardboard card that is marked on the front bottom with the words "32% Full Leaded Austrian Crystal Made in Canada". The words "Printed in Canada" appear directly below. The reverse side of the card indicates a similar statement in French.ISSUE:

What are the country of origin marking requirements for the crystal products imported from Canada in the manner described above?

LAW AND ANALYSIS:

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) 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. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the interim amendments to the Customs Regulations published as T.D. 94-4 (59 Fed. Reg. 109, January 3, 1994) with corrections (59 Fed. Reg. 5082, February 3, 1994) and T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993). These interim amendments took effect on January 1, 1994, to coincide with the effective date of the NAFTA. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in T.D. 94-4 (adding a new Part 102, Customs Regulations). The marking requirements of these goods are set forth in T.D. 94-1 (interim amendments to various provisions of Part 134, Customs Regulations).

Section 134.1(b) of the interim regulations, defines "country of origin" as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin within this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j) of the interim regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the interim regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the interim regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

In this case, leaded crystal products of Austrian origin are imported into Canada to be assembled with nylon line and packaged, after which they are exported to the U.S. for retail sale. Thus, in order to determine the appropriate marking requirements for the crystal products imported from Canada we must apply the NAFTA Marking Rules.

Part 102 of the interim regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the interim regulations, sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) of the interim regulations states that "[t]he country of origin of a good is the country in which:

(1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied."

"Foreign Material" is defined in section 102.1(e) of the interim regulations as "a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced."

For purposes of this ruling, we are assuming that the nylon string is a good of Canada either under 102.11(a)(1) or (2). However, the leaded crystal of Austrian origin (foreign as defined in section 102.1(e) of the interim regulations) is neither wholly obtained/produced nor produced exclusively from domestic materials. Therefore, paragraphs (a)(1) and (a)(2) of section 102.11 cannot be used to determine the country of origin of the crystal products. Thus, paragraph (a)(3) of section 102.11 is the applicable rule that next must be applied to determine the origin of the finished article.

The leaded crystals are classified under subheading 7018.10, HTSUS. According to HQ 955614 (March 24, 1994) the crystal products are classified in the same subheading. The applicable change in tariff classification set out in section 102.20(m), Section XIII, Chapters 68 through 70, 7010-7018 of the interim regulations provides:

7010-7018 .... A change to heading 7010 through 7018 from any other heading, except from heading
7020; or

A change to heading 7010 through 7018 from heading
7020 if that change results in a substantial transformation

In this case, since the leaded crystals of Austrian origin are classified under subheading 7018.10 both before and after the processing performed in Canada, they do not undergo the applicable change in tariff classification set out in section 102.20(m), and, as a result, section 102.11(b) of the hierarchial rules must be applied next to determine the country of origin of the finished crystal products.

Section 102.11(b) of the interim regulations provides that:

Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a), the country of origin of the good:

(1) Is the country or countries of origin of the single material that imparts the essential character of the good, or

(2) If the material that imparts the essential character of the good is fungible, has been commingled, and direct physical identification of the origin of the commingled material is not practical, the country or countries of origin may be determined on the basis of an inventory management method provided under the Appendix to part 181 of the
Customs Regulations.

Applying section 102.11(b)(1) to the facts of this case, we find that the single material that imparts the essential character of the finished crystal products is the foreign origin leaded crystal from Austria. The nylon string is an insignificant component of the finished article. In HQ 955614 the characteristics of the leaded crystal determined the appropriate classification of the finished crystal products. Therefore, pursuant to section 102.11(b)(1), the country of origin of the crystal products imported from Canada for marking purposes is Austria, the origin of the leaded crystal. Accordingly, the articles or their retail containers must be marked to indicate Austria as the country of origin of the "Good Vibes Crystal: Rainbow Maker" products to the ultimate purchaser in the U.S.

The proposed country of origin marking "32 Full Leaded Austrian Crystal Made in Canada" that appears on the sample is not an acceptable country of origin marking for the "Good Vibes Crystal: Rainbow Maker" products since it indicates that the crystal product is of Canadian origin, rather than the actual origin, Austria. Although the proposed marking does indicate that the crystal is of Austrian origin. An ultimate purchaser reading the proposed marking in its totality would be misled into believing that the imported crystal product is of Canadian origin since the definitive statement "Made in Canada" follows the reference to the Austrian-leaded crystal.HOLDING:

Pursuant to section 102.11(b)(1) of the interim regulations amendments to the Customs Regulations, the country of origin of the "Good Vibes Crystal: Rainbow Maker" crystal products imported from Canada is the country of origin of the leaded crystal, Austria. Marking the cardboard card with the proposed marking "32 Full Leaded Austrian Crystal Made in Canada" is not an acceptable country of origin marking for the imported crystal products.

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 handling the transaction.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling