HQ 559134 - Internal Advice; Country of origin marking of corona wire and web; J-list; printed and microfilm machines; replacement parts; repacking; relabeling; Notice to Mark; 19 CFR 134.33 - United States International Trade Commision Rulings

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HQ 559134

May 10, 1995

MAR-2-05 R:C:S 559134 MLR

CATEGORY: MARKING

Area District Director
U.S. Customs Service
110 South 4th Street
Minneapolis, Minnesota 55401

RE: Internal Advice; Country of origin marking of corona wire and web; J-list; printed and microfilm machines; replacement parts; repacking; relabeling; Notice to Mark; 19 CFR 134.33

Dear Sir:

This is in reference to a letter dated April 4, 1995, from Thomas P. Ondeck, Esq, Baker & McKenzie, counsel for Minnesota Mining & Manufacturing ("3M"), regarding a Notice to Mark corona wires and web, issued by your office on March 22, 1995. Samples of the corona wires were submitted to our office.

FACTS:

3M states that for the last 15 years, it has purchased various printing and microfilm machines manufactured by a Japanese company, Katsuragawa Electric Co., Ltd. ("Katsuragawa"). 3M sells these machines to its distributors/dealers who in turn resell them to the ultimate purchasers. 3M also states that replacement parts for these machines are imported from Katsuragawa, and resold to the distributors and dealers who resell them to the ultimate purchasers.

The replacement parts are purchased in bulk and are allegedly shipped to 3M's Repackaging Facility in St. Paul, where the bulk parts are removed from their various bulk shipping containers and are individually repacked and labeled for distribution and sale to the ultimate purchaser. 3M states that it received a Notice to Mark dated March 22, 1995, for certain corona wires and web.

The sample of the corona wire is packaged in a protective cardboard sleeve, measuring 3 « by 3 inches, with the labeling "K -3 1st" printed on one side of the sleeve. The cardboard sleeves are packaged in 30 unit quantities in a plastic bag which is placed into a cardboard box containing a label with the model number, part number, and quantity. The webs are similarly packaged. 3M states that these boxes, containing the corona wires and webs, along with other parts, are then placed into a cardboard shipping container which is labeled "Made in Japan." After importation, 3M states that these parts are taken to its repackaging facility where the exterior cardboard shipping containers are opened and the bulk parts are individually repacked and relabeled. The sample submitted is a corona wire in its cardboard sleeve packaged in a sealed plastic bag, slightly larger than the sleeve, labeled with the name of the part, the part number, the part number bar code, the quantity, the date of packaging, and the country of origin "Made in Japan." It is stated that the webs are similarly repacked. During a meeting held at our office on April 6, 1995, a 3M representative acknowledged that the shipment at issue contained bearings individually marked "Made in Thailand" and purchased from Katsuragawa, which were shipped in the shipping container marked "Made in Japan." 3M states that it has instructed Katsuragawa to ship these bearings in a separate shipping container with the marking "Made in Thailand."

Your office believes that each cardboard sleeve containing a corona wire can be marked and should be marked "Made in Japan," and in the case of the web, the cardboard box should be labeled.

ISSUE:

What are the country of origin marking requirements applicable to the corona wires and webs?

LAW AND ANALYSIS:

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 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. Inc., 27 CCPA 297, 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. The "ultimate purchaser" is generally defined in 19 CFR 134.1(d), as the last person in the U.S. who will receive the article in the form in which it was imported.

Section 134.33, Customs Regulations (19 CFR 134.33), sets forth certain classes of articles, known collectively as the J-list, which are excepted from individual country of marking pursuant to 19 U.S.C. 1304(a)(3)(J). However, in the case of any article on the J-list which is imported in a container, the outermost container in which the article ordinarily reaches the ultimate purchaser is required to be marked to indicate the origin of its contents. (Emphasis added).

One class of articles on the J-list is "parts for machines imported from the same country as parts." This item has been interpreted to cover replacement parts which are manufactured in the same country as the original machine which is exported to the U.S. As construed by Customs in T.D. 75-85 (March 12, 1975), the following principles are applicable to this exception:

(1) The word machine is used in a general sense and also applies to such things as vehicles;

(2) The exception applies to replacement parts for machines which may be manufactured in more than one country, provided that Customs officers are satisfied that the machines exported to the U.S. are made only in one country;

(3) The exception applies to replacement parts made and engineered for use on or in the particular machine involved, and also to parts made to standard or stock designs which are used in producing the machine; and

(4) The exception is applicable only to replacement parts manufactured in the same country as the machine which is exported to the U.S.

The underlying rationale for this particular J-list exception is that if the ultimate purchaser buys a specific machine which is properly marked as to its country of origin, then there is no need to mark a replacement part for that machine if it is manufactured in the same country as the original machine. The presumption is that the ultimate purchaser will assume that unless otherwise marked, the replacement part was manufactured as the machine itself.

Accordingly, in T.D. 75-85, Customs held that replacement parts for imported vehicles were excepted from individual marking pursuant to 19 U.S.C. 1304(a)(3)(J), since the parts and vehicles were both manufactured in Germany. In addition, Customs stated that the exception for the German parts could apply even though vehicle models other than the vehicle model at issue were manufactured in countries other than Germany, provided that Customs officers were satisfied that the vehicle models exported to the U.S. market were only made in Germany. However, those parts made in countries other than Germany were not excepted from marking under the J-list.

In Headquarters Ruling Letter (HRL) 731864 dated April 7, 1989, Customs also held that although a Canadian entity manufactured machines in various countries, the imported Canadian parts were excepted from marking under the J-list since they were replacement parts for machines which were only manufactured in Canada. Relying on HRL 720420 dated September 28, 1982, which allowed Customs officers at the port of entry to require an appropriate written statement to the effect that all replacement parts and the machine were made in the same country before allowing the marking exception under the J-list, HRL 731864 stated that there was no reason to deny the exception from marking where the importer has shown that both the particular machines and the parts for these machines were made only in one country, namely Canada, and that the parts do not fit any other machine. See also ORR Ruling 310-70 dated March 30, 1970 (the marking exception applies to repair or replacement parts for machines which are known to be manufactured in only one country, and to repair or replacement parts made and engineered for the particular machine involved, although conceivably they could be used on some other machine; however if parts were manufactured in another country other than the country in which the machine was made, the parts would be subject to marking unless they were exempt under some other provision of 19 U.S.C. 1304); and HRL 732544 dated July 21, 1989 (parts produced in Mexico and used to service hand tools only produced in Mexico, were excepted from marking requirements under the J-list; however, if the parts were repacked into new containers after leaving Customs custody, the new containers had to be marked to indicate to the ultimate purchaser the country of origin of the parts, as required by 19 CFR 134.25.)

As provided in 19 CFR 134.25, if the imported J-list product will be repacked prior to sale to the ultimate purchaser, the importer must certify to Customs that he will properly mark the new package or alternatively notify the repacker of the obligation to mark the new package. The certification procedures, which are for the purpose of ensuring that despite the repacking, the ultimate purchaser will be advised of the country of origin, apply to imported J-list articles processed and repacked after importation unless the articles are substantially transformed prior to repacking.

In this case, 3M claims that the corona wires and webs are excepted from individual country of origin marking requirements under the J-list exception for "parts for machines imported from the same country as parts." Accordingly, 3M claims that the imported corona wires and webs were properly marked at the time of importation.

Based on the facts of this case, we agree that the corona wires and webs are "parts for machines imported from the same country as parts." These parts are produced by Katsuragawa in Japan and are replacement parts for machines which were also manufactured by Katsuragawa in Japan and purchased by 3M. Accordingly, since the machines and the replacement parts are both manufactured in Japan, the replacement parts are excepted from marking requirements under the J-list. Proof, however, may be requested by the Customs officer at the port of entry that the machines imported into the U.S. are only produced in one country, and that the replacement parts for which an exception is sought are produced in the same country in which the machines are produced.

Furthermore, it is our opinion that the corona wires and webs were properly marked at the time of importation. As articles covered by the J-list, they are excepted from individual country of origin marking. However, since they were imported in various containers, the outermost container was required to be marked with the origin of the contents. In this case, the shipping container was marked "Made in Japan," the origin of the corona wires and webs. Furthermore, the plastic bag in which the corona wire is repacked is the outermost container in which the ultimate purchaser receives the article, and it is marked "Made in Japan." Accordingly, provided the certification procedures of 19 CFR 134.25 were followed, the country of origin marking on the corona wires and webs satisfied the requirements of 19 U.S.C. 1304.

HOLDING:

Based on the information and samples submitted, the marking requirements of 19 U.S.C. 1304 will be satisfied if the outermost container (i.e., the shipping container) of the corona wires and webs is marked "Made in Japan," the origin of the corona wires and webs; the certification procedures of 19 CFR 134.25 are followed; and each plastic bag in which the corona wire or web is repacked, contains the marking "Made in Japan" and is the outermost container in which the ultimate purchaser receives these articles.

Sincerely,

John Durant, Director

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