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HQ 559268




May 20, 1997

MAR-2-05 RR:TC:SM 559268 KR

CATEGORY: MARKING

Ed Baker
A.N. Deringer, Inc.
30 West Service Road
Champlain, NY 12919

RE: Modification of prior ruling HQ 732372, concerning the country of origin marking of imported sunflower growing kit; Article 509, NAFTA, 19 CFR Part 102.

Dear Director:

This is a modification of a prior ruling, HQ 732372 (March 16, 1995), involving a country of origin ruling regarding the country of origin marking of a sunflower growing kit.

FACTS:

Seracon Products intends to import a sunflower growing kit into the U.S. The pieces are separate and are packaged into a cardboard canister. The canister contains sunflower seeds, a terra cotta pot and saucer, and a bag of soilless organic growing mix. The canister and growing mix are products of Canada. The sunflower seeds are products of Japan. The terra cotta pot and saucer are products of Germany. The top of the canister has an adhesive label on which there is printed:

PACKAGED IN CANADA
REUSABLE CANISTER AND GROWING MIX
PRODUCTS OF CANADA

SUNFLOWER SEEDS - PRODUCT OF JAPAN

TERRA COTTA POT AND SAUCER
PRODUCT OF GERMANY

The canister has a label encircling it on which there is printed:

MADE BY / FRABRIQUE PAR
SERACON PRODUCTS
MONTREAL, CANADA

However, in a telephone conversation on July 27, 1994, the importer stated that they were going to remove the "MONTREAL, CANADA" from the canister label, and only the top adhesive label would have any geographical reference.

ISSUE:

Whether the adhesive label is an adequate country of origin marking for the sunflower growing kit.

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 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 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 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 134.1(d), provides that:

The ``ultimate purchaser'' is generally the last person in the United States who will receive the article in the form in which it was imported; however, for a good of a NAFTA country, the ``ultimate purchaser'' is the last person in the United States who purchases the good in the form in which it was imported.

Part 102 of the 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 regulations, sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) of the 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 sunflower growing kit is neither wholly obtained or produced in a single country nor produced exclusively from domestic materials, ?102.11(a)(1) and (2) are not applicable for purposes of determining whether the sunflower growing kit is a good of Canada. Therefore, it must be determined whether pursuant to ?102.11(a)(3), the foreign materials incorporated into the sunflower growing kit meet the specific tariff rule of material whose country of origin as determined under these rules is not the same country as the country in which the good is produced." Thus, we must look at those materials whose country of origin is other than Canada. The sunflower growing kit has four components; the growing mix, the sunflower seeds, the terra cotta pot and saucer. The growing mix is a product of Canada; the sunflower seeds are products of Japan; the terra cotta pot and saucer are from Germany.

To ascertain the applicable rule in 19 CFR ?102.20, we must first determine the classification of the set. When imported separately, the sunflower seeds are classified under heading 1206, HTSUS, the terra cotta pot and saucer are classified under heading 6914, HTSUS, and the growing mix is classified under heading 3501, HTSUS. The items in this set are prima facie classifiable in two or more headings. Therefore, classification under GRI I fails, and we must apply the other GRIs.

GRI 3(a) states that if a product is classifiable in two or more headings by application of GRI 2(b), or for any other reason, then the
heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to ... part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

GRI 3(b) provides that "goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character."

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the Customs Cooperation Council's official interpretation of the HTSUS. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. To determine what is a "set put up for retail sale", EN X to GRI 3(b), page 4, states that:

[flor the purposes of this Rule, the term "goods put up in sets for retail sale" shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings;

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).

The subject merchandise is a set, because: the items in it are provided for in headings 1206 and 6914, HTSUS; all of the products put together carry out the specific activity of cultivating the growth of sunflower plants; and it is packaged in one container to be sold directly to the user.

Because the item is a set, we must determine which component provides the essential character. EN VIII to GRI 3(b), page 4, states that:

[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

In HQ 953946 (August 30, 1993), we found that the essential character of a sunflower growing kit matching the one at issue here was the sunflower seeds. HQ 953946 held that "[w]e believe that the ... seeds form the essential character of the kits because without them the kits would serve no purpose." Therefore the classification of the set in the instant case will be the classification of the sunflower seeds, subheading 1206.00.0040, HTSUS.

Thus, in this case, the specific tariff rule applicable to the kit is set forth in ?102.20(m), Section II: Chapters 6 through 14, which states: "A change to heading 1201 through 1207 from any other chapter." In this case, the sunflower seeds do not undergo the necessary change in tariff classification. Therefore, the origin of the kit cannot be determined pursuant to section 102.11(a)(3). Moreover, section 102.11(b) is not applicable since the good (kit) is classified as a set. However, section 102.11(c) provides, inter alia, that for a good which is classified as a set under the HTSUS, the country of origin of such a good is the country or countries of origin of all materials that merit equal consideration for determining the essential character of the good. Since we find that each of the components of the kit (i.e. the seeds, pot and saucer, and growing mix) merits equal consideration for determining the essential character of the kit, the country of origin of the kit is the country of origin of each of these components. Inasmuch as the adhesive label lists the individual country of origin of each component, it is an acceptable country of origin marking under section 1304.

However, it should be noted that the canister qualifies as a "usual container" pursuant to 19 CFR?134.22(d)(1), and as a usual container from a NAFTA country, the canister itself is excepted from country of origin marking under 19 CFR ?134.22(d)(2). Therefore, the words appearing on the adhesive label indicating the country of origin of the canister, although acceptable, are not required.

The first line of the adhesive label states that the sunflower growing kit is "PACKAGED IN CANADA". The marking of where the packaging occurs is not required, and could be removed. However, since it appears on the sample provided, it must satisfy the country of origin marking regulations. Section 134.46, Customs Regulations (19 CFR ?134.46), requires that when the name of any city or locality in the U.S., or the name of any foreign country or locality other than the name of the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning. Customs has ruled that in order to satisfy the close proximity requirement, the country of origin marking must appear on the same side(s) or surface(s) in which the name of the locality other than the country of origin appears. HQ 708994 (April 24, 1978). The purpose of 19 CFR ?134.46 is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the origin of the imported article. In this situation, the "PACKAGED IN CANADA" appears in larger print than the other country of origin designations. We find this to be a violation of 19 CFR ?134.46. Since "PACKAGED IN CANADA" is not required to appear on the product, it must either be removed, or the print size must be reduced so as to more closely match the print size of the country of origin designations of the contents.

HOLDING:

The adhesive label listing the individual countries of origin of the components of the sunflower growing kit is an acceptable method of country of origin marking. However, the marking on the front label "MONTREAL, CANADA" must be removed, and the words "PACKAGED IN CANADA" printed on the adhesive label must be either removed or reduced in size so that these words are more closely matched to the print size of the country of origin designations appearing on the canister for the contents.

Sincerely,

John Durant, Director
Tariff Classification Appeals
Division

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