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HQ 735372




March 16, 1995

MAR-2-05 CO:R:C:S 735372 KR

CATEGORY: MARKING

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

RE: Country of origin marking of imported sunflower growing kit; Article 509, NAFTA, 19 CFR Part 102.

Dear Mr. Baker:

This is in response to your letter dated September 24, 1993, and a telephone conversation on July 27, 1994, on behalf of Seracon Products, requesting a country of origin ruling regarding marking a sunflower growing kit.

FACTS:

You state that Seracon Products intends to import a sunflower growing kit into the U.S. The pieces are separate and are packaged into a reusable canister. The canister contains sunflower seeds, a terra cotta pot and saucer, a bag of soilless organic grow mix. The canister and grow 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 which 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 which is printed with:

MADE BY / FRABRIQUE PAR
SERACON PRODUCTS
MONTREAL, CANADA

However, in a telephone conversation on July 27, 1994, you stated that you 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), Customs Regulations (19 CFR 134.1(b), 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 the meaning of the marking laws and regulations. The case of United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed. In such circumstances the U.S. manufacturer is the ultimate purchaser. The imported article is excepted from individual marking and only the outermost container is required to be marked. See 19 CFR 134.35.

The country of origin marking requirements for goods of a NAFTA country are determined in accordance with Annex 311 of the North American Free Trade Agreement, as implemented under the North American Free Trade Implementation Act ("NAFTA") (Pub. L. 103-182, 107 Stat. 437 (December 8, 1993)); implemented by T.D. 94-4, NAFTA Interim Regulations (59 Fed. Reg. 110 (January 3, 1994))(to be codified at 19 CFR Parts 12, 102 and 134) as amended (59 Fed. Reg. 5082 (February 3, 1994) and T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993)). These interim amendments took effect on January 1, 1994, to coincide with the effective date of the NAFTA. The marking rules used for determining whether a good is a good of a NAFTA country are contained in T.D. 94-4 (adding a new Part 102, Customs Regulations). The marking requirements for these goods are set forth in T.D. 94-1 (interim amendments to various provisions of Part 134, Customs Regulations).

Section 134.1(b) of the interim 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 interim 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 interim 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 134.45(a)(2) of the interim regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

Part 102 of the interim 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 interim regulations, sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) of the interim 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."

In this case, the applicable rule is 19 CFR ?102.11(a)(3) of the interim regulations. "Foreign Material" is defined in section 102.1(e) of the interim regulations as "a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced." In order to determine whether Canada is the country of origin, we must look at those materials whose country of origin is other than Canada.

When imported individually, the sunflower seeds are classified under HTSUS 1206.00 and the terra cotta pot and saucer are classified under HTSUS 6914.90.80. However, in the condition as imported in this case, i.e., as a sunflower growing kit, the terra cotta pot and saucer and the sunflower seeds are classified as a "set" pursuant to General Rules of Interpretation ("GRI") 3. Under the circumstances presented, the kit would be classified under the tariff provision for the pot and saucer, i.e., subheading 6914.90.80, HTSUS, as a result of the application of GRI 3(c).

Thus, in this case, the specific tariff rule applicable to the kit is set forth in ?102.20(m), Section XIII: Chapters 68 through 70, which states: "A change to heading 6901 through 6914 from any other chapter."

However, 19 CFR ?102.17(c) states that a foreign material shall not be considered to have undergone the applicable change in tariff classification set out in 19 CFR ?102.11(a) and ?102.20 by reason of a simple packaging operation. Thus, although it appears that the sunflower seeds meet the tariff shift rule specified for the kit, in this case, the change in tariff classification is not recognized because it occurs merely as a result of a simple packaging operation. 19 CFR ?102.17(c).

Therefore, we find that 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) 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, even though reusable, 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 reusable 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 contents 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

Sincerely,

John Durant, Director
Commercial Rulings Division

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