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HQ 560395




July 29, 1997

MAR-2 RR:TC:SM 560395 MLR

CATEGORY: MARKING

Jeremy Ross Page, Esq.
Sandler, Travis & Rosenberg, P.A.
The Waterford
5200 Blue Lagoon Drive
Miami, FL 33126-2022

RE: Country of origin marking for test products and bulk articles exported for packaging

Dear Mr. Page:

This is in reference to your letter of April 8, 1997, requesting a ruling on behalf of Noxell Corp. ("Noxell"), regarding the country of origin marking requirements for certain test products and articles exported in bulk, packaged, and returned.

FACTS:

It is stated that Noxell plans to import test products for use in consumer testing. The purpose of the testing is to ascertain whether the particular product or its container would be acceptable to U.S. consumers. It is implied that Noxell will structure its test program as discussed in Headquarters Ruling Letter (HRL) 720820 dated May 11, 1983, where individual units were imported and distributed to 500 people under the direct review and control of the company organizing the consumer testing. Noxell proposes to include on every commercial invoice of imported test products and packaging the following legend:

This Shipment Contains Test Product Which is Exempt From U.S. Customs Marking Requirements Pursuant to HRL 720820.

Noxell hopes that this legend will enable Customs to monitor Noxell's use of this procedure, while allowing the test products to be timely delivered, analyzed, and distributed. Noxell estimates to import 500 to 1,500 like products for use either internally, within consumer testing groups, or for eventual exportation from the U.S.

Additionally, Noxell plans to export bulk materials, i.e., liquid make-up or lip stick mass, stated to be produced in the U.S., for packaging in individual consumer compacts or similar containers. The individual consumer containers will then subsequently be imported into the U.S. Noxell claims that no country of origin marking is required for the individual consumer containers imported into the U.S. as they remain products of the U.S. For these products, Noxell plans to include the following statement on the commercial invoices from suppliers of such products:

Product of the U.S. Exported and Returned Exempt from Marking Pursuant to 19 CFR 134.32(m)

ISSUE:

Whether the test products and individual consumer containers are required to be marked pursuant to 19 U.S.C. 1304.

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 in 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. 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 exceptions of 19 U.S.C. 1304.

I. Test Products

Under the first scenario, Noxell plans to import products for testing purposes and does not wish to individually mark each individual product. In HRL 720820 dated May 11, 1983, Customs held that individual units, imported by the company organizing and monitoring the consumer testing, did not have to be individually marked as the company organizing the testing was the ultimate purchaser of those articles. In HRL 720820, the merchandise was distributed to 500 people for testing, after various in-house procedures and reviews, in what was called an "extension of the laboratory." The 500 testers were isolated, and under the direct review and control of the company organizing the testing. In finding that the individual imported units did not have to be marked, Customs stated that:

The importer who uses imported products for laboratory tests and for consumer preference testing among a selected and controlled group is the ultimate purchaser of the product. This is distinguished from random sampling by the public in general. The purpose of the importation is to test foreign products against domestic ones including their own, and not to sell or give away any imported products. In this case, based on the facts above the imported products used in this strict sense, need not be individually marked with their origin.

Similarly, in this case, we find that the ultimate purchaser of the imported test products will be Noxell, provided the test products are only distributed to a select group of testers under the direct review of Noxell. Accordingly, under these circumstances, it will be sufficient to only mark the outside containers reaching Noxell with the foreign origin of the test products contained therein. Therefore, as the test products are still subject to the requirements of 19 U.S.C. 1304, with regard to the proposed legend to be included on the commercial invoice, we suggest that it be modified to read: "...Exempt from Individual U.S. Customs marking...."

II. Bulk Product Exported for Individual Packaging

Under the second scenario, Noxell plans to export bulk product of U.S.-origin for repackaging into individual units abroad, and Noxell claims that the returned articles remain products of the U.S. In HRL 734399 dated December 28, 1992, Customs considered lipstick mass of U.S. origin which was exported to China where it underwent a number of processing operations, including heating, shaping the mass into stick or bullet shapes of individual tubes of lipstick, and inserting the tube shapes into a non-reusable retail plastic tube applicator manufactured in China. The individual units were also passed near a flame to create a gloss effect, capped, and packaged through the use of a clear plastic seal or a blister pack. Customs determined that the operations performed in China did not result in a substantial transformation of the lipstick mass, and consequently no country of origin marking was required on the individual lipstick units pursuant to 19 CFR 134.32(m). Noxell points out that in HRL 734399 the presence of a U.S. distributor's name and address included on the product labeling did not affect the marking of the U.S. origin lipstick.

Similarly, in this case, Noxell states that the exported bulk materials will contain its essential physical and chemical characteristics. Accordingly, it is our opinion that if bulk products of U.S. origin, such as liquid make-up or lipstick mass, are exported for repackaging into smaller individual consumer containers, the bulk material will not undergo a substantial transformation abroad and will not be required to be marked pursuant to 19 CFR 134.32(m). Additionally, the presence of U.S. distributor information will not require any country of origin marking as the individual consumer containers will not be subject to the requirements of 19 U.S.C. 1304.

In regard to the proposal to place the legend "Product of the U.S. Exported and Returned" on the commercial invoice in order to expedite Noxell's shipments through Customs, it is our opinion that this statement may be inaccurate as the individual consumer articles may not necessarily qualify for duty-free treatment under subheading 9801.00.10, Harmonized Tariff Schedule of the United States, or for a partial duty exemption. Accordingly, we do not suggest the use of this statement.

Additionally, we note that while the possession of a ruling letter will clarify Noxell's importations, it will not necessarily assure that Noxell's importation's will not be subject to inspection. Furthermore, it is stated that Noxell may import foreign-origin product along with U.S.-origin product in the same shipment. We find that provided the quantities of the U.S.-origin product which do not require any marking under 19 U.S.C. 1304 are clearly linked and identified with the proposed statement, Customs will not object to the use of such a statement.

HOLDING:

On the basis of the information submitted, we find that the ultimate purchaser of the imported test products will be Noxell. Accordingly, each individual product will not be required to be marked with its own country of origin, and it will be sufficient only to mark the outside bulk container with the country of origin of the articles contained therein. Additionally, we find that bulk materials such as liquid make-up or lipstick mass exported for packaging into individual consumer containers are not substantially transformed, and will not be required to be marked pursuant to 19 CFR 134.32(m) and 19 U.S.C. 1304.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director
Tariff Classification Appeals

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