HQ 735142 - Country of origin marking requirements for envelopes used for shipping letters by "Airborne Express"; ultimate purchaser; containers, 19 CFR 134.1(d); 19 CFR 134.32(d) - United States International Trade Commision Rulings

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HQ 735142

December 9, 1993

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

CATEGORY: MARKING

Mr. Mark Connors
A.N. Deringer, Inc.
1010 Niagara Street
Buffalo, New York 14213

RE: Country of origin marking requirements for envelopes used for shipping letters by "Airborne Express"; ultimate purchaser; containers, 19 CFR 134.1(d); 19 CFR 134.32(d)

Dear Mr. Connors:

This is in response to your letter dated April 14, 1993, on behalf of PNG Products, concerning the country of origin marking requirements for express envelopes that are used by Airborne Express for shipping letters.

FACTS:

PNG products manufactures envelopes in Canada for a shipping company called "Airborne Express". The envelopes are manufactured with U.S., Canadian, or Mexican 14 point white one side clay-coated paperboard and are printed with two colors according to art supplied by Airborne Express. They will be sold with the "Airborne Express" logo imprinted on them to PNG's U.S. affiliate, PNG PAC National Courier Products of Xenia, Ohio for subsequent sales to Airborne Express in Seattle, Washington. Airborne Express distributes the letter express envelopes free of charge to their regional dealers and customers. There are approximately 2.5 million envelopes in the field at any one time. Airborne Express charges their customers a delivery charge for shipment of the letter express envelope from the Customer's location to its destination. Their service charges are based on the weight of the package, type of service requested (guaranteed 10:00 am next day or 2 day delivery), and the distance travelled. It is our understanding that the envelopes are to be used solely by Airborne Express for the purpose of shipping letters or other documents, and they are not intended to be used for any other purpose. They are also intended to be used only one time.

ISSUE:

Do the envelopes used by Airborne Express for its shipping services have to be individually marked with their country of origin?

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 good are the product. Part 134, Customs Regulations (19 CFR 134), implements the country origin marking requirements and exceptions of 19 U.S.C. 1304.

Articles for which the marking of the containers will reasonably indicate the origin of the articles are excepted from marking under 19 U.S.C. 1304(a)(3)(D). For the exception to be granted under 19 U.S.C. 1304(a)(3)(D), the article must be imported in the container and the container must reach the ultimate purchaser unopened. See also 19 CFR 134.32(d).

In order to determine whether this exception applies, it is necessary to determine who is the ultimate purchaser of the Airborne Express shipping envelopes. 19 CFR 134.1(d) defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form 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.

In another situation concerning who is the ultimate purchaser of imported merchandise, Customs has previously ruled that goods purchased by hospitals for use exclusively on the premises by staff or patients were excepted from individual marking because the hospital was the ultimate purchaser. For example, in HQ 730945 (August 11, 1989), we ruled that hospitals were the ultimate purchasers of imported patient identification bracelets and thus they were excepted from individual marking. In HQ 715640 (June 16, 1981), Customs held that hospitals were the ultimate purchaser of imported disposable paper shoe covers, head covers, draped sheets, gowns, towels, and other similar products. See also 730840 (January 12, 1988) hospitals are the ultimate purchasers of imported surgical gloves.

In this case, we believe that Airborne Express is the ultimate purchaser of the shipping envelopes. Although Airborne Express' customers may get the shipping envelopes to put their documents inside when they contract for Airborne Express' services, they never really "receive" these items as word is used in the regulations. The envelopes are used by Airborne Express for the purpose of helping it ship and deliver documents. They function only as a means for Airborne Express to conduct to its business. When Airborne's customers decide to use its services to send a letter, they are not really making a separate purchasing decision concerning the shipping envelopes. Instead, it is Airborne Express who decides which envelopes will be used to ship documents. The customer is largely interested that the package arrive at its proper destination on time and is probably unconcerned about the envelope itself.

Therefore, Airborne Express is the last entity to receive the envelopes in the form in which they were imported and is the ultimate purchaser of the envelopes. Consequently, under 19 CFR 134.32(d), the envelopes are excepted from individual country of origin marking provided that the outermost containers that reach Airborne Express are properly marked to indicate the country of origin of the envelopes.

HOLDING:

Airborne Express is the ultimate purchaser of the shipping envelopes it uses to ship documents. The individual shipping envelopes are excepted from country of origin marking as long as Customs officials are satisfied that the containers for the envelopes will reach Airborne Express marked to indicate the country of origin of the envelopes.

Sincerely,

John Durant, Director

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