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HQ 560995




May 15,
1998

MAR-05: RR:TC:SM 560995 BLS

CATEGORY: MARKING

Ms. Angel L. Cooper
A.N. Deringer, Inc.
173 West Service Road
Champlain, New York 12919

RE: Country of origin marking of pens, plastic coffee mugs, and plastic cups

Dear Ms. Cooper:

This is reference to your letter dated December 2, 1996, on behalf of Urbano Advertising Specialties, Inc. ("Urbano"), requesting a ruling in connection with country of origin marking of pens, plastic coffee mugs and plastic cups. We regret the delay in responding to your request.

FACTS:

Urbano is a Canadian vendor of promotional products which are distributed throughout North America. Urbano imports into Canada pens, plastic coffee mugs and plastic cups of U.S.-origin, and personalizes them with a corporate or personal imprint. The finished articles are then imported into the U.S. While the exact type of pens are not described, we will assume for purposes of this ruling that they are either ball point or felt-tipped pens.

ISSUE:

What are the country of origin marking requirements for the imported promotional products?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that, unless excepted, every article of foreign origin (or its container) 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 manner as to indicate to the ultimate purchaser the English name of the country of origin of the article. The
regulations implementing the requirements and exceptions to 19 U.S.C. 1304 are set forth in Part 134, Customs Regulations (19 CFR 134).

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the NAFTA, as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (December 8, 1993) and the regulations set forth in 19 CFR Parts 102, 134.

Section 134.1(b) (19 CFR 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"; however, for a good of a NAFTA country, the NAFTA
Marking Rules will determine the country of origin.

Section 134.1(j) 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) defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.

Part 102 of the regulations (19 CFR Part 102), sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country. Section 102.11 of the regulations (19 CFR 102.11) sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) provides 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."

"Foreign Material" is defined in section 102.1(e) of the 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."

Since none of the products is wholly obtained or produced, or produced exclusively from domestic (Canadian) materials, section 102.11(a)(3) is the applicable rule which must first be applied. Under this rule, the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20. Section 102.20 of the rules sets forth the specific tariff classification changes and/or other operations which are specifically required in order for country of origin to be determined on the basis of operations performed on the foreign materials contained in a good. Thus, in order to determine whether Canada is the country of origin under this rule, we must look at those materials whose country of origin is other than Canada. In this case, the pens and plastic coffee mugs and cups which are imported into Canada for processing are of U.S.-origin. ("Foreign Material" under 19 CFR 102.11(e)) .

When imported into Canada, the unprinted plastic mugs and cups are classifiable under subheading 3924.90.55, Harmonized Tariff Schedule of the United States (HTSUS), "Tableware, Kitchenware, other household articles....., of plastics: Other, Other." When imported into the U.S. after processing in Canada, the printed plastic mugs and cups are also classifiable under HTSUS subheading 3924.90.55. The applicable change in tariff classification set out in section 102.20(g), Section Vll: Chapters 39 through 40, 3922-3926 of the regulations provides:

3922-3926 .... A change to heading 3922 through 3926 from any other heading, including another heading within that group.

In this case, as the plastic mugs and cups do not undergo the applicable change in tariff classification set out in section 102.20(g), section 102.11(b) of the hierarchal rules must be applied next to determine the country of origin of the plastic products.

Section 102.11(b) provides in pertinent part that where the country of origin cannot be determined under section 102.11(a), and the good is not specifically designated as a set pursuant to the Harmonized System nor classified as a set under General Rule of Interpretation 3, the country of origin of the article is "the country or countries of origin of the single material that imparts the essential character of the good. . .."

The rule of interpretation which determines the "essential character" of the imported products is found in section 102.18(b)(2) of the regulations. This rule provides that only materials that do not undergo a tariff shift are to be taken into consideration in determining the essential character of a good.

In this case, neither the unprinted mugs nor the unprinted cups imported into Canada undergo the applicable tariff shift. Consequently, the essential character of the imported products is imparted by these articles. Accordingly, the country of origin of the printed plastic mugs and cups is the United States, and the country of origin marking requirements under 19 U.S.C. 1304 do not apply to these imported products. See 19 CFR 134.32(m).

The unprinted ball point pens upon importation into Canada are classifiable under HTSUS heading 9608.10; the unprinted felt tipped pens are classifiable under HTSUS 9608.20. These articles after being printed are also classifiable under the same subheadings upon importation into the U.S. The applicable change in tariff classification set out in section 102.20(s), Section XX: Chapters 94 through 96, 9608.10 through 9608.40 of the regulations provides:

9608.10-9608.40 .... A change to subheading 9608.10 through 9608.40 from any other subheading, including another subheading within that group, except from
9608.60.

In this case, as the pens do not undergo the applicable change in tariff classification set out in section 102.20(s), section 102.11(b) of the hierarchal rules must be applied next to determine the country of origin of the plastic products. Using the identical analysis as applied to the mugs and cups, we find that the essential character of the printed pens imported into the U.S. is imparted by the articles imported into Canada. As these articles are products of the U.S., the country of origin of the pens is the U.S. Accordingly, the country of origin marking requirements under 19 U.S.C. 1304 do not apply to these imported products. See 19 CFR 134.32(m).

HOLDING:

Promotional mugs, cups and pens of U.S.-origin imported into Canada for imprinting do not undergo a tariff shift. As the essential character of the promotional items imported into the U.S. is imparted by the articles imported into Canada, the country of origin of the imported products is the U.S. Accordingly, the country of origin marking requirements under 19 U.S.C. 1304 do not apply to these imported products. See 19 CFR 134.32(m).

The Federal Trade Commission ("FTC") has jurisdiction concerning the use of the phrase "Made in the U.S.A.", or similar words denoting U.S. origin. Consequently, any inquiries regarding the use of such phrases reflecting U.S. origin should be directed to the FTC, at the following address: Federal Trade Commission, Division of Enforcement, 6th & Pennsylvania Avenue, N.W., Washington, D.C. 20508.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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


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