HQ 734795 - Country of origin marking requirements for stainless steel bends and tees; stainless steel ferrule; stainless steel clamps; raw stainless steel valve bodies used for dairy and food processing equipment; special marking for pipes and tubes; paint stenciling conspicuous; legible; permanent; etching; 19 U.S.C. 1304(c) - United States International Trade Commision Rulings

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HQ 734795

October 26, 1994

MAR-2-05 CO:R:C:V 734795 RSD

CATEGORY: MARKING

R. Kevin Williams, Esq.
O'Donnell, Byrne & Williams
20 North Wacker Drive
Suite 3710
Chicago, Illinois 60606

RE: Country of origin marking requirements for stainless steel bends and tees; stainless steel ferrule; stainless steel clamps; raw stainless steel valve bodies used for dairy and food processing equipment; special marking for pipes and tubes; paint stenciling conspicuous; legible; permanent; etching; 19 U.S.C. 1304(c)

Dear Mr. Williams:

This is in response to your letter dated August 25, 1992, submitted on behalf of G&H Products Corp., requesting a ruling concerning the country of origin marking requirements for stainless steel bends and tees; stainless steel clamps; stainless steel ferules; and raw stainless steel valve bodies. Seven samples of these articles were submitted with your August 25, 1992, letter. Three additional samples were submitted subsequently. On April 23, 1993, a meeting was held at the Office of Regulations and Rulings with a member of my staff to discuss your ruling request. We regret the delay in responding.

FACTS:

G&H Products of Kenosha, Wisconsin, imports stainless steel bends and tees from Denmark, stainless steel ferrules from Denmark and Taiwan, stainless steel clamps from Taiwan, raw stainless steel valve bodies from Denmark and finished stainless steel valve actuators. The articles are entered through the port of Chicago.

The bends and tees are made of stainless steel tubes of U.S. or Swedish origin. They are exported to Denmark and fabricated into the bends and tees by LKM, which is G&H Products' parent corporation. The bends and tees are imported with nominal sizes of 1", 1 1/2", 2", 2 1/2", 3", and 4".

The submitted sample is a 3" bend in its imported condition. The words "Made in Denmark" are ink stenciled onto the bend in letters which are about an 1/8 inch tall. The grade of the stainless steel is also stenciled onto the bends. All bends and tees imported by G&H Products are marked in this manner. G&H has amended its ruling request by stating that none of the bends and tees will be sold in their imported condition as raw bends and tees. All of the bends and tees are subjected to further processing in the United States by G&H Products. The U.S. processing operations result in bends and tees with different types of finishes.

The bends and tees are sold primarily to the dairy and food processing industries for use in product flow lines. Due to the strict sanitary requirements, the bends and tees are finished to meet the "3-A" sanitary standard developed by the International Association of Milk, Food and Environmental Sanitarians, United States Public Health Service and the Dairy Industry Committee. This sanitary standard for bends and tees requires that the product's contact surfaces shall be of stainless steel which is free of imperfections such pits, folds, and crevices.

After ferrules, if any, have been welded to the bends and tees in the U.S. and they have been polished, the country of origin is etched onto the side wall of the bend or the tee. Sample 2, which is a 1 1/2" butt welded elbow, has the word "DENMARK" etched in 1/16th" tall letters. The etch also contains the letters "G/H", the grade of the stainless steel and 3-A symbol to show that the bend or tee has been approved for use in sanitary applications. The bends and tees are then shrink-wrapped for sale and a label showing the part number and the country of origin is also affixed to the plastic wrap. The etch and the label are used on all the sizes of the bends and tees.

G&H imports two major types of ferrules: GC ferules and bevel ferrules. Each type of ferrule will eventually be welded to another component in a flow line such as a bend, tee, tube, or union which connects the flow line components. The ferrules are imported from Taiwan and Denmark and are available with nominal sizes of 1", 1 1/2", 2", 2 1/2", 3", and 4". The imported ferules may be welded onto bends and tees by G&H Product or may be sold in their imported condition.

Sample 3 is a 2" standard butt-weld clamp ferrule with a polished finish. Sample 4 is a 1 1/2" short weld ferrule with a polished finish. The country of origin, Denmark or Taiwan, is etched in 1/8" tall letters onto the neck of the GC ferules. When sold individually, the GC ferules are shrink-wrapped on a card and a label is affixed showing the part number and the country of origin. Sample 5 is a 2" short neck plain bevel ferrule. It is used with a threaded bevel ferrule and a hex nut to form a union between components in a flow line. The country of origin "Denmark" or "Taiwan" is etched in 1/8" tall letters onto the neck of the plain bevel ferrule. When sold
individually, the plain bevel ferrules are shrink-wrapped on a card. A label is affixed to the card showing the part number and the country of origin.

G&H Products imports the GC clamps which are used with the GC ferules to form a union between the components in a flow line. Sample 6 is a 1 1/2" clamp. The clamps are imported from Taiwan and the word "TAIWAN" is etched in 1/8" tall letters on the side of the clamps.

G&H also imports raw SRC valve bodies from Denmark. The valve body is assembled with a valve stem and a pneumatic actuator or a manual handle to form a completed valve. All components used to make the valve are from Denmark. Sample 7 is a sample of the raw SRC valve. The valve body is not marked at time of importation, but the outermost containers are marked with the country of origin. After the valve body is assembled with the remaining components, the completed valve is marked with the country of origin by means of a label affixed to the valve. The label also contains the letters "G/H", the grade of the stainless steel and the 3-A symbol to show that the fitting has been approved for use in sanitary applications.

G&H imports SRC valve actuators from Denmark, which are assembled, after importation, with SRC valve body and valve stem to form a completed SRC valve. The SRC valve actuators are operated with compressed air into the actuator to cause a piston to move. An adhesive label stating the country of origin is affixed to the actuator at the time of entry into the United States. This label remains on the actuator through the assembly process and contains the country of origin for the finished valve.

ISSUE:

What are the country of origin marking requirements applicable to the stainless steel bends and tees, ferrules, GC clamps, SRC valve bodies, and SRC valve actuators?

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 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. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940). C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain.

Section 207 of the Trade and Tariff Act of 1984, (Pub. L. 98-573), amended 19 U.S.C. 1304 to require, without exception, that all pipes, tubes, and pipe fittings of iron or steel be marked to indicate the proper country of origin by means of die stamping, cast-in-mold lettering, etching or engraving. 19 U.S.C. 1304(c). However, after the enactment of Section 207, it was brought to the attention of Customs that certain pipes and pipe fittings of iron or steel cannot be marked by any of the methods prescribed by the section without rendering such articles unfit for the purpose for which they were intended. Customs solicited comments on this subject, and issued T.D. 86-15 published in the Federal Register on February 5, 1986, 51 FR 24, setting forth certain categories of articles which may be marked by alternative methods. For certain categories of articles, paint stenciling was the requisite method. For other categories, paint stenciling or tagging of the bundles or the containers was permitted. These categories included thin-walled pipes and fittings, small-diameter pipes and fittings, other fittings, line pipe, coated pipes, and spun iron pipes. These categories of articles are described in detail in T.D. 86-15. In addition, for ornamental pipes, tubes, and fittings of all types, having a highly polished surface, T.D. 86-15 permitted marking by means of a durable tag or sticker securely affixed or marking the protective wrapper.

In 1986, Congress enacted Pub. L. 99-514 which amended 19 U.S.C. 1304(c) to authorize such alternative methods of marking if, because of the nature of an article, it is technically or commercially infeasible to mark by one of the four originally prescribed methods. 19 U.S.C. 1304(c)(2) provides that in such case, "the article may be marked "by an equally permanent method of marking such as paint stenciling or in the case of small diameter pipe tube and fittings, by tagging the containers or bundles." (emphasis added).

In order to carry out Congressional intent, on July 22, 1992, Customs published, in the Federal Register, T.D. 92-70, which amended T.D. 86-15 by permitting the country of origin marking of pipes, tubes, and fittings by tagging of bundles or containers only with respect to small diameter pipes, tubes, and fittings. T.D. 92-70 specifically stated that pipes, tubes and fittings which could not be marked by a prescribed method must be marked by "paint stenciling or an equally permanent method." The notice indicated that Customs does not consider tagging the containers or bundles an equally permanent marking method as paint stenciling. Therefore, marking pipes, tubes, and fittings by tagging the bundles or containers is acceptable only for small diameter products. In T.D. 86-15, Customs determined that small diameter products included fittings that have a nominal diameter of one-fourth inch or less and pipes with an inner diameter of 1.9 inches or less.

Customs recognized in T.D. 92-70 that there might be some cases where paint stenciling or an equally permanent method of marking could damage the product and render it unfit for the purpose it was intended. Customs indicated that in such instances it would consider alternative methods of marking on a case-by-case basis.

On December 8, 1993, as part of the North American Free Trade Agreement ("NAFTA") Implementation Act, Congress again amended the country of origin marking provisions on pipes, tubes and pipe fittings. Pub. L. No. 103-182. Section 207(a) of the Act revised the requirements for marking the country of origin for pipes of iron, steel, or stainless steel by adding a fifth acceptable statutory method of marking -- continuous paint stenciling. In addition, 19 U.S.C. 1304(c)(2) was amended by eliminating the reference in the statute which indicated that paint stenciling was an example of an equally permanent method of marking that could be used if it was technically or commercially infeasible to mark by one of the other statutory methods. By enacting this amendment to 19 U.S.C. 1304(c), Congress reaffirmed its decision that pipes must be permanently marked by only certain methods. Only in cases where it is technically or commercially infeasible to mark by one of the mentioned methods can an alternative be considered and that alternative must be equally as permanent.

BENDS and TEES

You indicate that the stainless steel bends and tees that G&H will be importing fall within the scope of 19 U.S.C. 1304(c) because they would be classified as a pipe or tube. The issue that must be resolved is whether the bends and tees are marked in accordance with the requirements of 19 U.S.C. 1304(c).

You contend that the bends and tees cannot be marked by die stamping or engraving because these processes would destroy the structural integrity of the bends or tees and make it impossible to produce an acceptable dust blast finish that is necessary to be able to use these products in the food industry. In addition, marking by engraving or die stamping would create crevices and pockets which would violate the 3-A sanitary standards imposed on products used for milk processing equipment.

Cast-in-mold lettering is not feasible because the bends and tees are not made of cast steel. You also maintain that marking the bends and tees by etching would result in a marking which was not conspicuous.

The final statutory method of marking of pipe is continuous paint stenciling. You claim that G&H is using a method to mark the bends and tees, ink stenciling, which is the equivalent of paint stenciling. The marking is done through an ink jet process in which each character in the marking consists of ink drops distributed in a "dot matrix". Selected ink drops are given an electrostatic charge by putting a voltage on the charge electrode as each drop breaks off. The ink then drops between two deflector plates which are maintained at very high opposing voltages, and an electrostatic field set up between these plates changes the direction of flight of the charged ink drops. The chief advantage of using this method of marking is that it can be automated, which makes it faster and cheaper.

Whatever the merit of the arguments you put forth as to whether it is commercially or technically infeasible to mark the bends and tees by cast-in-mold lettering, etching, engraving, or die stamping, it is not necessary to consider them, if marking by the process you call ink stenciling would be the equivalent of paint stenciling because the requirements of 19 U.S.C. 1304(c)(1) would be satisfied.

The statute uses the words "continuous paint stenciling" as one of the mandatory methods for marking pipes, tubes, and fittings and makes no reference to a method such as ink stenciling. In order to determine whether the word "paint" has a special meaning or if ink stenciling would be equivalent of paint stenciling, we have consulted with Customs Office of Laboratory Services and the National Import Specialist who handles paint and ink. These offices have advised that there may be a technical difference between paint and ink, but for practical purposes it is often difficult to discern the difference. We note that in many cases it could be very difficult for Customs officials such as import specialists and inspectors to discern whether paint or ink was used to mark a product.

It appears that the central intent behind 19 U.S.C. 1304(c) in requiring that pipes, tubes, and fittings be marked by certain methods was that the marking on these products be permanent. In other words, the marking on pipes should not be capable of being easily removed after importation. The required methods of marking pipe were the means by which Congress decided to accomplish this goal. Therefore, rather than trying to draw a very technical and difficult distinction between paint and ink, when an importer uses stenciling to mark pipes, tubes, or fittings, we believe that a better approach would be to determine whether the marking is sufficiently permanent to satisfy the purpose of the statute. If a marking can be easily removed from the product, it is not sufficiently permanent to satisfy the requirement of 19 U.S.C. 1304(c). For example, even if an importer calls the marking paint stenciling, if it can be easily rubbed off without the use of solvents, chemicals, abrasives, high speed mechanical buffers, etc., the marking would not be satisfactory. In addition, the marking must still be in a conspicuous location and legible.

In this case, the marking on the sample bend/tee appears to be firmly embossed on the metal surface. It cannot be rubbed or scratched off without the use a chemical solvent or abrasive. Therefore, we find that the method used to mark the bends and tees, in this case--ink stenciling--is sufficiently permanent that it is the equivalent of paint stenciling and, therefore, meets the requirements of 19 U.S.C. 1304(c).

With respect to whether the marking is conspicuous and legible, Customs has previously indicated that there are certain factors that are considered in determining if the country of origin marking on an article is conspicuous, within the meaning of 19 CFR 134.41 and 19 U.S.C. 1304. Among the factors that are considered is the size of the marking, the location of the marking, whether the marking stands out, and the legibility of the marking. With respect to size, the marking should be large enough so that the ultimate purchasers can easily see the marking without strain. In regard to location, the marking should be in a place on the article where the ultimate purchaser would expect to find the marking or where he/she would easily notice it from a casual inspection. Whether the marking stands out is dependent upon where it appears in relationship to other print on the article and whether it is in contrasting letters to the background. The legibility of the marking concerns the clarity of the letters and whether the ultimate purchaser could read the letters of the marking without strain. No single factor should be considered conclusive by itself in determining whether a marking meets the conspicuous requirement of 19 CFR 134.41 and 19 U.S.C 1304. Instead, it is the combination of these factors which determines whether the marking is acceptable. In some cases, a marking may be unacceptable even when it is in a large size because the letters are too hard to read or it is in a location where it would not be easily noticed. In other cases, even if the marking is small, the use of contrasting colors, which make the letters particularly stand out, could compensate to make the marking acceptable.

The marking on the sample bend/tee as imported can be read, but the black dots against the metal surface are not very bold. This causes the marking not to stand out against its background. However, you have advised, through a telephone conversation, that G&H will make the dots darker so that marking will be bolder. In addition, we note that this ink stenciled marking is only temporary as G&H will further process the bends and tees after importation by polishing which will remove the ink stenciled marking. After the processing is completed, a new marking will be applied to the bends and tees through acid etching before they are sold to ultimate purchasers in the United States. Under these circumstances, we find that the marking is sufficiently legible and conspicuous to satisfy the requirements of 19 CFR 134.41 and 19 U.S.C. 1304.

The marking on the polished bends and tees will be done through acid etching. Etching is one of the prescribed methods specified in 19 U.S.C. 1304(c)(1) for marking pipes and tubes. The marking can be easily observed from a casual inspection of the bends/tees. It is also sufficiently clear and large to be read without strain. However, if the marking was smaller, it is doubtful that the marking could be read without strain. Therefore, the marking should not be smaller than the size on the sample.

FERULES

The GC ferrules, as demonstrated by the samples labeled 3 and 4 and the plain bevel ferrules (sample 5), are marked with their country of origin on the neck of the articles by etching in letters of approximately 1/8 inch in size. The use of an etch to indicate the country of origin on the ferrules satisfies the requirement of 19 U.S.C. 1304(c)(1). We also believe that the neck of the ferrule is a conspicuous location for the marking. The marking can be observed from a casual inspection of the merchandise. The letters in the marking are sufficiently clear and large so that they can be read without strain. We also note that a marking regarding the country of origin of the ferules will also be printed on a part number which is affixed to the shrink-wrap used to package the ferrules prior to their resale in the United States. Therefore, we find that the marking of the ferrules is acceptable.

CLAMPS

Although you maintain that the GC clamps are not subject to the marking requirements of 19 U.S.C. 1304(c), it is unnecessary to consider this argument, since the proposed marking on the clamps is done by one of the methods prescribed by 19 U.S.C. 1304(c)(1)(etching). Therefore, the marking meets the requirements of 19 U.S.C. 1304(c). The marking is on a large curved surface on the side of the clamp. Because of the contrasting black letters against the shiny metal finish, the marking is readily noticeable from a casual inspection of the clamp. In addition, the letters are clear and large, so that they can be read without strain. Therefore, we find that the marking on the clamp is acceptable.

RAW VALVE BODIES

Raw valve bodies are not covered by 19 U.S.C. 1304(c) because they are not pipes, tubes, or fittings. After importation, the raw valve bodies will be further processed in the United States. This processing includes welding any required fittings to the valve body, assembling them with an actuator and valve stem to form the complete valve, and polishing the valve body to meet the sanitary standards for the dairy processing industry. After this processing, the valves are marked with the country of origin. You maintain that this processing will destroy any marking put on the valve bodies prior to importation. An exception from marking is authorized pursuant to 19 U.S.C. 1304(a)(3)(G) and 19 CFR 134.32(g) where the articles are to be processed in the U.S. by the importer or for his account otherwise than for the purpose of concealing the origin of such articles and in such manner that any mark contemplated by this part would necessarily be obliterated, destroyed or permanently concealed. However, Customs has ruled that, unless the processing results in a substantial transformation, the processed article (or its container) must be marked with the country of origin after the processing is completed and before the article reaches the ultimate purchaser.

We find that the processing of the valve bodies will destroy or obliterate any marking put on them. Accordingly, they are excepted from marking at the time of importation pursuant to 19 CFR 134.32(g).

You also argue that the valve bodies should be excepted from marking under 19 CFR 134.35 because they will be substantially transformed by the processing performed in the United States. However, you have also indicated that G&H will mark the finished valve with the country name, Denmark, prior to their sale to the ultimate purchaser because "all components of the valves are from Denmark." If the finished SRC valves are properly marked with their country of origin, then it is not necessary to mark the origin on the components when all the components come from the same country. Therefore, we do not need to consider whether the raw valve bodies are substantially transformed.

VALVE ACTUATORS

The SRC valve actuators are marked with the country of origin at the time of importation with an adhesive label affixed to the side of the actuator. These articles are also not subject to the special marking requirements of 19 U.S.C. 1304(c). The marking on the sample label is in blue letters of about an 1/4 inch in size. We find that this marking is sufficiently legible to satisfy the requirement of 19 CFR 134.41. Section 134.44(b) of the Customs Regulations states:

If paper sticker or pressure sensitive labels are used, they must be affixed in a conspicuous place and so securely that unless deliberately removed they will remain on the article while it is in storage or display and until it is delivered to the ultimate purchaser.

Assuming that these requirements are met, the marking on the imported valve actuators will be acceptable.

HOLDING:

The "ink stenciled" marking found on the bends and tees at the time they are imported, as demonstrated by the submitted sample, is sufficiently permanent to meet the requirements of 19 U.S.C. 1304(c). It is also sufficiently legible and conspicuous to satisfy 19 U.S.C. 1304 and 19 CFR 134.41. The marking that is applied to the bends and tees after importation--acid etching--meets the requirements of 19 U.S.C. 1304(c) and is conspicuous and legible.

The markings on the ferrules and clamps as shown by the submitted samples satisfy the requirements of 19 U.S.C. 1304(c) and are sufficiently legible and conspicuous to satisfy 19 CFR 134.41.

Because any marking put on the raw valve bodies would be destroyed by the processing performed after importation, they are excepted from marking at time of importation under 19 CFR 134.32(g). If the finished valves are properly marked with their country of origin, then it is not necessary to mark the raw valve body after it has been processed.

The adhesive label, as demonstrated by the sample, that will be used to mark the valve actuator is acceptable, provided the requirements of 19 CFR 134.41 are satisfied.

Sincerely,

John Durant, Director

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