HQ 559620 - Application for Further Review of Protest No. 3901-95-101103 concerning country of origin marking of imported neckties and scarves; Marking duties; - United States International Trade Commision Rulings

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HQ 559620

May 17, 1996

MAR-2-05 RR:TC:SM 559620 DEC

CATEGORY: MARKING

Port Director of Customs
610 South Canal Street
Chicago, IL 60607

RE: Application for Further Review of Protest No. 3901-95-101103 concerning country of origin marking of imported neckties and scarves; Marking duties;
19 U.S.C. 1304(f); 19 CFR 134.51; 19 CFR 134.52; HRL 731775; HRL 733097;
19 CFR 141.113; Textile Fiber Products Identification Act

Dear Madam:

This is in reference to Protest No. 3901-95-101103 and the Application for Further Review dated May 8, 1995, timely submitted by Marianne P. Basham, Esq., on behalf of Corporate Textiles, Incorporated, against your decision to assess marking duties in connection with an entry of neckties and scarves from Korea.

FACTS:

On April 15, 1994, Corporate Textiles, Incorporated (Corporate Textiles) entered certain neckties and scarves. At the time of importation, each article had a fabric sewn-in label with the words "100% SILK" printed on the front side of the label and the words "MADE IN KOREA printed on the back side. At the time of importation, the Customs inspector and import specialist determined that the neckties and scarves were not properly marked because the country of origin did not appear on the "front" side of the sewn-in label. Customs issued a marking notice of Customs Form (CF) 4647 on April 15, 1994, citing 19 CFR 141.113, with a request for redelivery on May 15, 1994. Since redelivery of the merchandise did not occur, Customs assessed a claim for liquidated damages. You state that Customs assessed 10% marking duties for the alleged marking violation and the entry was liquidated on February 24, 1995.

ISSUE:

Was the assessment of marking duties proper against the neckties and scarves that had a fabric sewn-in label with the words "100% SILK" printed on the front side of the label and the words "MADE IN KOREA" printed on the back side?

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 container) will permit, in such manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Section 1304(f) provides that 10 percent marking duties shall be levied, collected and paid if an imported article is not properly marked with the country of origin at the time of importation and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.51, Customs Regulations (19 CFR 134.51), provides that when articles or containers are found upon examination not to be legally marked, the port director shall notify the importer on Customs Form (CF) 4647 to arrange with the port director's office to properly mark the article or container or to return all released articles to Customs custody for marking, exportation or destruction. Section 134.52, Customs Regulations (19 CFR 134.52), allows a port director to accept a certification of marking supported by samples from the importer or actual owner in lieu of marking under Customs supervision if specified conditions are satisfied.

Section 1304(f) states that marking duties "shall be deemed to have accrued at the time of importation, shall not be construed to be penal, and shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause." See C.S.D. 92-32 (Headquarters Ruling Letter (HRL) 734151, dated April 6, 1992). As noted by the United States Customs Court in A.N. Deringer, Inc. v. United States, 51 Cust. Ct. 21, C.D. 2408 (1963),
those who import goods into the United States accept certain responsibilities that have been laid on them by Congress. One such responsibility, and an important one, is to see that imported merchandise of foreign origin is properly marked to show the country of origin, before it enters into the commerce of the
United States.

In HRL 731775, dated November 3, 1988, Customs ruled that two prerequisites must be present in order for marking duties to be properly assessed under 19 U.S.C. 1304(f). These two prerequisites are:

1. the merchandise was not legally marked at the time of importation, and

2. the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation.

In this case, the assessment of marking duties on the neckties and scarves would be appropriate if there was a violation of 19 U.S.C. 1304. The neckties and scarves have a fabric label that is sewn into the silk articles. The front side that is most readily exposed to the ultimate purchaser says "100% SILK" and the back side which can be observed by flipping up the label has printed on it the words "MADE IN KOREA."

In HRL 733907, dated October 15, 1991, Customs addressed the propriety of the country of origin marking of various dresses, skirts, and blouses and the propriety of assessing marking duties. In this ruling, Customs cited the requirements of 19 U.S.C. 1304 as well as the Textile Fiber Products Identification Act which provides, in part, that a textile article's country of origin shall be set out on the same side of the label as the other required information, and must be clearly legible and readily accessible to the prospective purchaser. Also, in that ruling, Customs stated that the back side of the sewn-in tag is not a conspicuous location for the placement of country of origin marking within the meaning of 19 U.S.C. 1304 and that in accordance with T.D. 54640(6) (1958), the sewn-in tag is the only location which is acceptable to Customs for the marking of shirts, blouses, coats, sweaters, and the like. This protest, however, pertains to neckties and scarves which are accessory articles rather than wearing apparel with a neck opening, such as shirts, coats, and sweaters which are included within the scope of T.D. 54640.

Accordingly, it is Customs' position that the conspicuousness requirement of 19 U.S.C. 1304 does not mandate that the neckties and scarves be marked on the front-side of the fabric label that is sewn to the article. Upon our own examination of the sample necktie and scarf, we are satisfied that, for purposes of 19 U.S.C. 1304, the country of origin on the back of the sewn-in label may be easily found by a casual examination by an ultimate purchaser. Accordingly, the articles were properly marked when imported for purposes of 19 U.S.C. 1304.

Pursuant to section 141.113, Customs Regulations (19 CFR 141.113), textile and apparel articles are required to be marked or labeled pursuant to the Textile Fiber Products Identification Act (15 U.S.C. 70). Section 303.16(b), Federal Trade Commission Regulations (15 CFR 303.16(b), provides, in pertinent part, that the fiber content, the registered identification number or manufacturer's name, and the country where the product was manufactured shall all appear conspicuously on the same side of the label. We recommend that the importer contact the Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508, as to whether the marking for the neckties and scarves apparel satisfies such requirements.

Since we have concluded that the neckties and scarves were legally marked pursuant to the 19 U.S.C. 1304 at the time of importation, the assessment of marking duties was inappropriate. However, since the importer failed to redeliver the articles in compliance with the marking notice, the claim for liquidated damages was proper.

HOLDING:

The assessment of marking duties in this case was not proper due to the fact that this merchandise was marked at the time of importation for purposes of 19 U.S.C. 1304. Accordingly, the protest should be allowed with respect to the assessment of marking duties.

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 by 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 Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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