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HQ 735555




November 1, 1994

Mar-2-05 CO:R:C:S 735555 AT

CATEGORY: MARKING CLASSIFICATION

TARIFF No.: 4911.10.0080

Ms. Denise Bennett-Chavoustie
Ms. Carin Moore
Trans Continental West Printing, Inc.
1420 Fifth Avenue, Suite 2200
Seattle, Washington 98101

RE: Classification and country of origin marking requirements of various printed material imported from Canada; Article 509; NAFTA Marking Rules; ultimate purchaser; section 134.1(d) of the interim regulations; 19 CFR 134.32(d)

Dear Ms. Bennett-Chavoustie and Ms. Moore:

This is in response to your letter dated February 25 1994, forwarded to our office by the New York Seaport Area, requesting a ruling on the appropriate classification and country of origin marking requirements for certain printed materials imported from Canada to be sold or distributed in the U.S. free of charge. Samples were submitted with your letter for review. We regret the delay in responding.

FACTS:

You state that Trans Continental West Printing, Inc. intends to import into the U.S. from Canada printed material consisting of unbound advertising publications, bound home and real estate publications, bound advertising publications and bound travel guides. You also state that the printed material will be either sold or distributed in the U.S. free of charge. You have requested the appropriate classification and country of origin marking requirements for the sample printed material. By letter dated July 22, 1994, you represent that the printed material which is to be distributed in the U.S. free of charge will have the word "free" printed on the front cover. Also, any printed material which is intended to be sold in the U.S. will have a "price" printed on the front cover.

By letter dated September 12, 1994, you have withdrawn your request for a country of origin marking ruling for the following printed material samples:

1.Harmon Homes
2.Ernst Home and Nursery

The following samples were submitted:

1.) Unbound Advertising Publications: The two samples submitted are sheets of paper folded to form 8 pages of advertising. They are published by (or on behalf of) a drug store and a super market. They consist entirely of advertisements for products sold in the stores. There are no dates or numbers. U.S. references (e.g. "Neenah, Wi" or "Kankakee, Il") are printed on the advertisements themselves or on the front or back cover of the publications.

2.) Bound Home and Real Estate Publications: These are paper publications bound by staples. The three samples submitted measure approximately 11 inches by 8 inches and have 104, 84, and 40 pages. They consist entirely of advertisements pertaining to the sale of homes: page after page of photographed homes with a brief description below each photo, including, in most instances, a price. Several pages in each publication are advertisements for real estate companies, mortgage companies, or real estate development companies. There are no articles of either general or specialized interest. One of the three samples is numbered and dated, one is only dated, and the other is only numbered. Several U.S. references also appear on these publications. The word "free" appears on the front cover of one of the sample publications.

3.) Bound Advertising Publications: The three samples of this kind are paper publications bound by staples. They measure 10 and 3/4 inches by 8 and 1/2 inches, 10 inches, and 5 inches by 8 and 1/4 inches. The first of these publications is dated and has about 40 unnumbered pages consisting entirely of advertisements for a multitude of products and services, from mattresses and appliances to auto body repair, carpet cleaning, and landscape work. The second sample is dated and numbered and has 16 pages. It is published by (or on behalf of) a home and nursery store. It consists of advertisements for particular products sold in the store and brief articles concerning home decorating, maintenance, and improvements and the kinds of products needed to perform the decorating, maintenance, and improvements discussed. The third sample is neither dated nor numbered and has 15 pages. It is published by an auto parts store. It consists entirely of advertisements and coupons for products sold in the store. The words "Printed in Canada" appear on the back cover of each of the sample articles in black lettering approximately 4.5 points (a point is a unit of measurement approximately equal to 0.01384 inches or nearly 1/72 inches).

4.) Bound Travel Guide: This sample is a paper publication bound by staples. It measures 10 and 3/4 inches by 8 and 1/4 inches. It has 47 pages of ferry schedules and numerous advertisements for hotels, resorts, restaurants, stores, shops, and points of interest (historical, geographical, and geological). In addition to schedules, each ferry service and the area it serves is briefly described. The guide serves local commuters, vacationers, and travelers. The guide publishes schedules for Washington (state) and British Columbia destinations, through the Puget Sound and the Straits of Juan de Fuca and Georgia. It is printed three times per year and is dated but not numbered. A price "$1.95 U.S./Cdn" is printed in black lettering on the top right corner of the front cover of the travel guide. Various cities located in Washington state (such as "Seattle", "Vashon", "Fauntleroy") appear on the front and back cover of the travel guide. U.S. references also appear on the inside pages of the guide. The words "Printed in Canada" are printed on the lower left corner of the back cover in black lettering approximately 5 points.

ISSUES:

1. Are the publications described above classifiable as periodicals in heading 4902, Harmonized Tariff Schedule of the United States (HTSUS), or as advertising materials in heading 4911, HTSUS?

2. What are the country of origin marking requirements for imported printed material distributed in the U.S. in the manner described above? LAW AND ANALYSIS:

I. CLASSIFICATION OF THE PRINTED MATERIAL

Classification under the HTSUS is accomplished in accordance with the General Rules of Interpretation (GRI's). The systematic detail of the Harmonized System is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that goods cannot be classified solely on the basis of GRI 1, and if headings and legal notes do not otherwise require, the remaining GRI's will then be applied in numerical order. Further, the Explanatory Notes (EN's) to the Harmonized Commodity Description and Coding System (HCDCS), which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRI's. Accordingly, the GRI's and EN's are applied as the basis for the classification determinations discussed below. (See Treasury Decision 89-80, 23 Cust. Bull. 379 (1989), 54 Fed. Reg. 35,127 (August 23, 1989).)

Unbound Advertising Publications

The unbound paper advertisements described in #1 above are nothing more than unbound advertising papers and should be classified under subheading 4911.10.0080, HTSUS, which provides for other printed matter, trade advertising material, other.

Bound Home/Real Estate Publications and Product Advertising Publications

It is clear that these publications are devoted entirely or essentially to advertising. The home and real estate publications (#2 above) contain, almost exclusively, advertising for particular homes, with the occasional advertisement for a mortgage company, real estate broker, or real estate development the only exception. The product advertising publications (#3 above) are devoted entirely to the advertisement of products (and services, such as auto repair) sold at retail. While this is clear, the following question is raised: Does the fact that an advertising publication is dated and published in a continuous series mean that it is a periodical, even though the publication contains only advertising? The EN's for heading 4902, HTSUS, provide the following (EN's, HCDCS, Vol. 2, p. 693):

The distinguishing feature of the publications of this heading is that they constitute one issue in a continuous series under the same title published at regular intervals, each issue being dated (even by merely indicating the period of the year, e.g., "Spring 1966") and also frequently numbered. . . . These publications usually consist essentially of reading matter but they may also be profusely illustrated and may even consist mainly of pictorial matter. They may also contain advertising material. [Italics added.]

From the above EN, we know two things about the publications of this heading: 1) they are dated and regularly published in a continuous series, and 2) essentially, they consist of "reading matter." The question is: Do advertising publications qualify as "reading matter"?

In our view, the term "reading matter" suggests something other than mere print that can be read. In other words, not all printed text qualifies as reading matter in the context of heading 4902, HTSUS. Such a broad meaning of the term would be literally boundless. Thus, "reading matter" in the context of this heading is appropriately limited.

Heading 4902, HTSUS, provides explicitly for newspapers, journals, and periodicals, including professional journals and periodicals. These are good examples of reading matter. The tariff provision does not provide for advertising publications. It merely provides that the newspapers, journals, and periodicals of the heading may contain, in part, advertising material. The EN uses the words "may contain" for advertising rather than "consist of" which it uses for reading matter, reading matter with illustration (even profuse illustration), or mainly pictorial matter (which implies the presence of at least some reading matter). The publications of this heading "consist of" the foregoing; they do not "consist of" advertising. Moreover, the plain and ordinary meaning of the term "reading matter" suggests something other than advertising. While one can, and does, read advertising, this fact does not make it "reading matter."

Furthermore, the publications at issue do not fit the EN's description of periodicals. The EN's for heading 4902, HTSUS, describe journals and periodicals as follows (EN's, HCDCS, Vol. 2, p. 694): (2) Journals and other periodicals, issued weekly, fortnightly, monthly, quarterly or half-yearly, either in the form of newspapers or as paperbound publications. They may be mainly devoted to the publication of intelligence on subjects of a specialized nature or sectional interest (e.g., legal, medical, financial, commercial, fashion or sporting), in which case they are frequently published by or for the organizations of the interests concerned. Or they may be of more general interest, such as the ordinary fiction magazine. These include periodicals published by or for named industrial concerns (e.g., motor car manufacturers) to promote interest in their products, staff journals normally having circulation only within the industrial, etc., organizations concerned and periodicals such as fashion magazines which may be issued by a trader or an association for publicity purposes. (Bolding in original; italics added.)

We note that advertising is not mentioned in the above EN; nor is there anything in the text to suggest that advertising publications are included. In addition, the language, "[journals and other periodicals] may be mainly devoted to the publication of intelligence on subjects of a specialized nature or sectional interest (e.g., legal, medical, financial, commercial, fashion or sporting)," does not reasonably suggest that advertising is contemplated.

Regarding the home and nursery publication that contains brief articles about home decorating, maintenance, and improvements, we believe that it does not qualify as reading matter or intelligence as contemplated in heading 4902, HTSUS, for the reason that it is essentially advertising. The articles generally discuss the kinds of products (for carrying out the discussed activities) that are sold in the store. In addition, the publication is published by or on behalf of the nursery, indicating its advertising intent.

Based on the foregoing, we conclude that the bound home/real estate publications and the bound product advertising publications are advertising materials, not periodicals. The language of heading 4911, HTSUS, indicates that advertising materials are classified thereunder. It provides for "[o]ther printed matter . . .: [t]rade advertising material, commercial catalogs and the like." (Italics added.) The EN's for heading 4911, HTSUS, explicitly state that advertising matter is included under the heading. (See EN's, HCDCS, Vol. 2, p. 699.) While the note also states that newspapers, periodicals, and journals, whether or not containing advertising material, are excluded, we have already determined that the sample home/real estate publications and product advertising publications are not periodicals within the meaning of heading 4902, HTSUS. Thus, this exclusion is inapplicable. Finally, Legal Note 5 to Chapter 49 provides that publications essentially devoted to advertising are not covered in heading 4901, HTSUS. It states the following: "Such publications are to be classified in heading 4911."

Bound Travel Guide

The bound travel guide contains timetables for ferry transport, brief descriptions of ferry routes and destinations, and numerous advertisements for hotels, resorts, restaurants, and places of historical and geographical interest. Its primary function is to publicize the schedules of the various ferries serving the area, giving notice to the traveling public of times of departure and arrival, prices, and other information (such as capacity of the ships and whether autos are transported). In this way, the publication serves a decidedly utilitarian function. In addition, its numerous advertisements also serve the tourist and traveller. It is published three times per year to accommodate seasonal schedule changes.

The travel guide does not contain the kind of reading matter that heading 4902, HTSUS, contemplates (as discussed above in the previous section). Reading matter must be something more than printed text that can be read; it must be more than mere advertising. Likewise, reading matter must be more than a mere travel guide that provides primarily a utilitarian function in the form of published ferry schedules, timetables, and advertisements.

Further, the EN's description of periodical, taken as a whole, does not encompass bus, train, airplane, cruise ship, and ferry schedules. Dating them and publishing them at regular intervals does not transform them into periodicals of the kind contemplated by the heading. Moreover, the words of text describing the routes, destinations, and points of interest are more in the nature of tourist promotional literature. The EN's for heading 4911, HTSUS, explicitly provide that tourist propaganda is included in that heading. (See EN's, HCDCS, Vol. 2, p. 699.) In addition, Legal Note 5 to Chapter 49 provides that tourist promotional literature is a kind of advertising classifiable in heading 4911, HTSUS.

Based on the foregoing, we conclude that the travel guide at issue is not a periodical classifiable under heading 4902, HTSUS. Because it is not more specifically described in any other heading of the chapter, it is classifiable in heading 4911, HTSUS, as other printed matter, specifically in subheading 4911.10.0080, HTSUS, as trade advertising material, commercial catalogs, and the like, other.
II. COUNTRY OF ORIGIN MARKING REQUIREMENTS FOR THE PRINTED MATERIAL IMPORTED FROM CANADA TO BE DISTRIBUTED IN THE U.S. IN THE MANNER DESCRIBED ABOVE

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(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 U.S. as determined under the NAFTA Marking Rules. Since the printed material is printed in Canada, we will assume for purposes of this ruling that the country of origin of the imported articles is Canada. Thus, the NAFTA marking rules must be applied in determining the appropriate marking requirements of the imported articles.

In determining the country of origin marking requirements for the imported printed material, it first must be determined who is the ultimate purchaser in the U.S. of the imported articles. Section 134.1(d) of the interim regulations, provides that the ultimate purchaser of a good of a NAFTA country is the last person in the U.S. who purchases the good in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. If an imported article is to be distributed as a gift, the recipient is the ultimate purchaser. However, if a NAFTA article is imported and distributed as a gift, the ultimate purchaser is the purchaser of the gift rather than the recipient. See, Section 134.1(d)(4) of the interim regulations.

In this case either the printed material will be distributed in the U.S. free of charge or it will be sold to the U.S. consumer.

Ultimate Purchaser of the Imported Printed Material

1. Imported Printed Material Distributed in The U.S. Free of Charge

In accordance with section 134.1(d) of the interim regulations, the ultimate purchasers of the printed material which is imported from Canada, a NAFTA country, (assuming the imported article is a good of Canada) and is to be distributed free of charge in the U.S., as gifts or giveaways, are the U.S. companies which pay Trans Continental West the fee for printing the various advertisements in the publications. The U.S. companies which pay for the printing of the advertisements are the last persons in the U.S. to purchase the imported articles in their imported condition and not the consumer who receives the imported article free of charge, as a gift or giveaway. Accordingly, the ultimate purchasers of the imported printed material which is to be distributed free of charge are the U.S. companies which pay Trans Continental West the fee to be advertised in the publication.

2. Imported Printed Material Sold in the U.S.--Not Distributed Free of Charge

With respect to the imported printed material which is to be sold in the U.S., rather than distributed free of charge, the ultimate purchasers of the imported articles in accordance with section 134.1(d) are the U.S. consumers who purchase the printed advertisement publications. The U.S. consumers who purchase the advertisement publications are the last persons in the U.S. to purchase the imported articles in their imported condition--not the U.S. companies who pay Trans Continental the fee for printing the advertisements.

The last issue which must be examined is whether the advertisement publications are excepted from country of origin marking.

Are The Imported Printed Materials Excepted From Country of Origin Marking

1. Imported Printed Material Distributed Free of Charge

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. Accordingly, provided the outermost container is marked with the article's origin, the printed material itself, which is to be distributed free of charge, is excepted from country of origin marking.

Section 134.46, Customs Regulations (19 CFR 134.46), generally requires that when a name of any U.S. city or locality or the name of any foreign country other than the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly, and permanently, in close proximity to such words, letters or name and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning. The purpose of this section is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the actual country of the imported goods.

Although section 134.46-type references, appear on the advertisement publications, the special marking requirements of 19 CFR 134.46 do not apply for marking the imported printed materials, if they are excepted from marking pursuant to 19 CFR 134.32(d).

In this case, where the advertisement publications are distributed free of charge to consumers in the U.S., the ultimate purchasers of the publications are not the U.S. consumers who receive the articles free of charge, but rather are the U.S. companies who pay for the advertisements. Under these circumstances, the U.S. references which appear on the printed material itself would not mislead or deceive the ultimate purchasers as to the article's actual origin given the fact that the outermost containers will be marked with the article's actual country of origin. Accordingly, the marking requirements under 19 CFR 134.46 will not be invoked when such references appear on the advertisement publications which are to be distributed free of charge in the manner described above, provided the outermost containers which reach the ultimate purchasers in the U.S. are marked with the article's actual country of origin, "Canada", pursuant to a 19 CFR 134.32(d) marking exception. 2. Imported Printed Material Sold to U.S. Consumers

Where the imported advertisement publications are to be sold to consumers in the U.S., the U.S. consumers are the ultimate purchases of the imported articles--not the U.S. companies who pay for the advertisements. Therefore, the imported advertisement publications must be marked to indicate to the U.S. consumers that "Canada" is the country of origin of the imported publications. In this case, various U.S. references may appear on the advertisement publications themselves, whether on the front or back cover or on the advertisement pages themselves. Thus, the special marking requirements of 19 CFR 134.46 are triggered. This being the case, a strict application of section 134.46 would require that the country "Canada" be marked in close proximity and at least in comparable size lettering preceded by the words "Made in" anywhere a U.S. reference would appear on the publications. However, we find that, to require such marking would be overly burdensome to the importer since compliance would be virtually impossible.

As previously stated, the purpose of section 134.46 is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the actual country of the imported goods. Thus, provided the printed material is conspicuously marked in such a manner as to clearly indicate to the U.S. consumer prior to purchase that "Canada" is the actual country of origin of the article the purpose of section 134.46 would be satisfied.

A country of origin marking is considered to be conspicuous, if the marking is easy to find and read upon a casual examination of the article. Review of the sample travel guide indicates that the country of origin marking "Printed in Canada" appears on the back cover near the lower left-hand corner of the guide in black lettering approximately 5 points. We find that this country of origin marking does not satisfy the conspicuousness requirement of section 134.46 and is not an acceptable country of origin marking for the travel guide. The back cover is not a location where a U.S. consumer would look or expect to find the country of origin of the publication. Also, we note that, aside from the country of origin marking, there is no other information on the back cover. With respect to the size of the lettering in this case (5 points), we find that it is acceptable in that it is easy to read.

However, the front cover of the travel guide in our opinion would be a conspicuous location to mark the travel guide with the country of origin marking "Printed in Canada". In HQ 731663 (July 18, 1989) Customs stated that with respect to books:

Because retail purchasers could reasonably expect to find all the pertinent publication, printing and copyright information related to a book on either the front or back of the title page and could therefore, look at the title page if they were confused by information appearing elsewhere, an importer satisfies 19 CFR 134.46 if the country of origin is placed on the front or back of the title page and otherwise complies with the requirements of 19 CFR 134.46.

Even though the travel guide is not a published book, we nevertheless, believe that the front cover is similar to the title page of a book. Individuals would normally look at the front cover to find information about the travel guide. Also, inasmuch as the front cover indicates to the individual purchaser the price of the travel guide and the areas covered in the guide, it is reasonable to believe that this would be a location where the individual purchaser would first look for information about the travel guide.

HOLDING:

The paper publications at issue - the unbound advertising publications, the bound home and real estate publications, the bound product advertising publications, and the bound travel guide - are classifiable in subheading 4911.10.0080, HTSUS. The applicable duty rate is "Free."

Assuming that the imported advertisement publications are goods of Canada, a NAFTA country, and are to be imported into the U.S. in the manner described above, the ultimate purchaser of the imported publications that are to be distributed in the U.S. free of charge are the U.S. companies who pay Trans Continental West the fee for printing the publications and not the consumers who receive the imported articles free of charge. Thus, provided the outermost containers are marked to indicate "Canada" as the origin of the imported advertisement publications pursuant to a 19 CFR 134.32(d) marking exception, the imported publications themselves are excepted from country of origin marking, and the special marking requirements of 19 CFR 134.46 are not invoked by the U.S. references which appear on the publications.

The ultimate purchasers of the imported advertisement publications which are to be sold in the U.S. in the manner described above are the U.S. consumers who purchase the publications not the U.S. companies which pay for the printing of the publications. Accordingly, these advertisement publications must be marked to indicate "Canada" as the origin of the imported publications. Marking the publications "Printed in Canada" on the back cover is not an acceptable country of origin marking for the imported advertisement publications for the reasons set forth above. 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

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