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HQ 558759




October 11, 1995

MAR-2-05 R:C:S 558759 KR

CATEGORY: MARKING

Dan Bard
Diamond Brands Incorporated
1800 Cloquet Avenue
Cloquet, Minnesota 55720

RE: Country of origin marking of matchboxes; Article 509, NAFTA

Dear Mr. Bard:

This is in reference to your letter to the U.S. Customs Service in New York and subsequently forwarded to this office, dated August 23, 1994, concerning whether imported matchboxes from Canada to be filled in the U.S. with U.S. origin matches must be marked with the country of origin of the matchboxes. You have included sample matchboxes in various stages of production for our review.

FACTS:

Diamond Brand produces matches to be used as advertising for the Hotel Intercontinental New Orleans. Diamond Brand manufactures the actual wooden matches in the U.S. Diamond Brand also manufactures the slide in "drawer" or "tray" of the matchbox in the U.S. However, the outer sleeve of the matchbox is imported from Canada. The sleeve is imported in a pre-printed sheet. After importation, a friction surface is applied which is used to strike the match, the sheet is cut to the appropriate length, and the boxes are glued. The printing on the sheet as it is imported has the location of the hotel,"New Orleans", printed on it in large type, as well as the hotel's street address in smaller type. The name of a match company with its location,"San Antonio", is also printed on the matchbox.

ISSUE:

Whether the matchbox with the U.S. address appearing on the outer sleeve must be individually marked with the country of origin of the pre-printed sleeve.

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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940). Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. 1304.

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 U.S. as determined under the NAFTA marking rules.

Section 134.35(b), provides that:

A good of a NAFTA country which is to be processed in a manner that would result in the good becoming a good of the United States under the NAFTA Marking Rules is excepted from marking. Unless the good is processed by the importer or on its behalf, the outermost container of the good shall be marked in accord with this part.

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.

Since the finished matchboxes are not wholly obtained or produced in a single country nor produced exclusively from domestic materials, ?102.11(a)(1) and (2) are not applicable. Therefore, it must be determined whether pursuant to ?102.11(a)(3), the foreign materials incorporated into the finished matchboxes meet the specific tariff rule of ?102.20. In this case the matchbox pre-printed sheet is a product of Canada. It is then imported into the U.S. where it is cut, folded and glued into the proper shape and a friction surface is applied on which to strike the match. The pre-printed imported sheet is classified under 4823.90.6500 HTSUS. The finished matchbox is classified under 4819.50.4040 HTSUS. Thus, the specific tariff rule for these goods is set out in section 102.20(j) (Section X: Chapters 47 through 49) of the interim regulations, which states: "A change to headings 48.17 through 48.22 from any other heading, including another heading within that group."

Accordingly, the imported matchbox sleeves undergo the necessary change in tariff classification and the finished articles become products of the U.S. as a result of the processing being performed in the U.S. Therefore, pursuant to ?134.35(b), the imported matchbox sleeves (and the containers in which they are imported) and the finished article are excepted from marking.

HOLDING:

The imported matchbox sleeves undergo the necessary change in tariff classification under 19 CFR ?102.20 after importation as a result of the further processing performed in the U.S. and, therefore, become products of the U.S. As a result, the imported matchbox sleeves and finished matchboxes are excepted from marking.

Sincerely,

John Durant, Director
Tariff Classification Appeals Division

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