NY B87679 - COUNTRY OF ORIGIN MARKING OF IMPORTED CD ROM FOR RETAIL PACKAGE "CAPITALISM"; ARTICLE 509 - United States International Trade Commision Rulings

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NY B87679

August 11, 1997

MAR-2 RR:NC:1:108 B87679

CATEGORY: MARKING

Mr. Sylvain Duval
Director of North American Operations
Saturn Solutions
6520 Abrams
St. Laurent, Quebec
Canada H4S 1Y2

RE: COUNTRY OF ORIGIN MARKING OF IMPORTED CD ROM FOR RETAIL PACKAGE "CAPITALISM"; ARTICLE 509

Dear Mr. Duval:

This is in response to your letter dated July 7, 1997 requesting a ruling on the country of origin marking requirements of a CD Rom package entitled "Capitalism." The CD is replicated in Canada from a program written and developed in the United States. It is the CD that is being imported from Canada. The CD is then assembled into a retail package in the United States by your Vermont fulfillment center. The booklet, tray card, tray and jewel case are all made in the U.S. The final assembled product is shipped to U.S. distributors who, in turn, ship to U.S. retailers. You indicate the CD itself will be marked "Made in Canada," but you do not describe the manner in which it will be marked. You feel that the entire package should not have to be marked "Made in Canada." Diagrams and a "Process Flow Interactive Magic" chart were submitted with your letter for review. The diagrams submitted show the phrase "duplicated in Canada" wherever the CD itself is depicted. A marked sample was not submitted with your letter for review.

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 (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 a manner as to indicate the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("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 appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.

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 United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the 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 134, Customs Regulations (19 CFR PART 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations, mandates that the ultimate purchaser in the U.S. must be able to find the markinng easily and read it without strain. Section 134.1(d)(2) of the Regulations provides that the ultimate purchaser of a good of a NAFTA country is the last person in the United States who purchases the good in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser.

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.

Applying the NAFTA Marking Rules set forth in C.R.102.11(a)(3), we find that the CD which is duplicated in Canada from an American master program undergoes the requisit tariff shift from an unrecorded medium of heading 8523 to a recorded medium of heading 8524 (C.R. 102.20(o): Section XVI: Chapters 84 through 85). It is, therefore, a product of Canada for marking purposes. The incorporation of this product into a retail package in the U.S. triggers the application of C.R.134.1(d)(3). The ultimate purchaser is the purchaser at retail. The repackaging process is a minor operation which would neither result in the substantial transformation of the CD nor allow exception to the marking requirements. In fact, the repackaging process in the U.S. triggers the application of C.R.134.26, wherein an article intended to be repacked after release from Customs custody must not have the marking obscured or concealed by the act of repacking, or the new container must be marked to indicate the country of origin of the article. The only possible exception is provided by C.R.134.26(f), in which case the repackaging in a container which can be readily opened for inspection by the ultimate purchaser is not subject to the requirements of C.R. 134.26.

Accordingly, the imported article, if properly marked to indicate Canada as the country of origin, and, if repacked in a retail container, must have the new container marked to indicate the country of origin of the CD pursuant to the requirements of C.R, 134. The entire package need not be marked "Made in Canada," but, unless you qualify for the exception cited above, the package must be marked to indicate that the CD is made in Canada.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Harvey Kuperstein at 212-466-5672.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1301 Constitution Ave., NW, Franklin Court, Washington, DC 20229.

Sincerely,

Robert B. Swierupski
Chief, Metals & Machinery Branch

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