NY C84914 - COUNTRY OF ORIGIN MARKING OF IMPORTED INTEGRATED CIRCUITS - United States International Trade Commision Rulings

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NY C84914

March 25, 1998

MAR-2 RR:NC:MM:109 C84914

CATEGORY: MARKING

Ms. Diane S. Nichols
Senior Manager Customs Compliance
Fairchild Semiconductor
333 Western Avenue
South Portland, Maine 04106

RE: COUNTRY OF ORIGIN MARKING OF IMPORTED INTEGRATED CIRCUITS

Dear Ms. Nichols:

This is in response to your letter dated February 23, 1998, requesting a ruling on whether the proposed method of marking the container in which the integrated circuits (ICs) are imported with the country of origin in lieu of marking the articles themselves is an acceptable country of origin marking for the imported integrated circuits. A marked sample container was not submitted with your letter for review.

According to your letter, integrated circuit wafers will be fabricated in the United States or overseas. They will then be tested and assembled into IC packages (housings) in various foreign countries (i.e. the Philippines, Malaysia, China, South Korea, Taiwan, Thailand, Singapore, and Japan). The ICs will be volume packaged in translucent plastic tubes, plastic trays, tape and reel carriers, or plastic bags. The integrated circuits from different contractors and from various countries are commingled when a customers order is placed in an inner and outer shipping carton. Upon importation into the United States, the integrated circuits are delivered directly to manufacturers who incorporate them into electronic assemblies or to distributors who resell the devices to manufacturers and other end users who incorporate them into their products.

It is noted that in C.S.D. 80-227, dated February 13, 1980, and in Headquarters Ruling Letter (HRL) 732357, dated May 21, 1990, Customs found that the assembly of integrated circuits into IC packages resulted in a substantial transformation. The finished integrated circuit is considered to be a product of the country in which such processing occurs. Based on the above, the ICs in question are a product of the foreign country in which they are assembled.

Your letter seeks a determination as to the following marking procedures: Fairchild Semiconductor Corporation proposes to have its integrated circuits excepted from marking pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d). The inner and outer shipping cartons will be marked with the following language to indicate a multiple country of origin pursuant to T.D. 75-187:

Made in one or more of the following countries: Philippines, Malaysia, China, S. Korea, Taiwan, Thailand, Singapore, and Japan.

You further indicate that Fairchild Semiconductor Corporation would change the marking to reflect any changes in the countries of origin prior to importation into the United States. All manufacturers will receive the devices in their inner and outer shipping cartons. Any distributor repackaging your products for resale will be advised in writing that the repackaged merchandise must be in properly marked containers pursuant to 19 CFR 134.26. In addition, Fairchild Semiconductor Corporation will comply with the certification requirements of 19 CFR 134.26.

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 to 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. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article 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.

An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. T.D. 75-187 addresses the country of origin marking requirements for semiconductors. In T.D. 75-187, Customs stated that semiconductor devices are excepted from individual marking if their containers are properly marked and Customs officials at the port of entry are satisfied that the devices will reach the ultimate purchaser in the marked containers. In T.D. 75-187, it was stated that the ultimate purchaser of the devices, within the meaning of 19 U.S.C. 1304(a), may be a manufacturer who uses the devices in the manufacture of new and different articles such as television sets, radios, or other electronic equipment, or a hobbyist, experimenter, or repairman who purchases the devices in their original imported condition for use in his hobby or profession. Accordingly, where a manufacturer uses the devices to produce other products, if the devices reach the manufacturer in a properly marked container, the requirements of 19 U.S.C. 1304 will be satisfied.

T.D. 75-187 further states that when semiconductor devices made in a number of different foreign countries are commingled for a bona fide reason, and subsequently repackaged for sale to the ultimate purchaser, the marking requirements of 19 U.S.C. 1304 will be met if the containers are legibly and conspicuously marked to indicate that the devices were made in one or more of the countries listed on the container.

In HRL 560024, dated December 20, 1996, Customs stated that for the repacking of semiconductor devices, the procedures of 19 C.F.R. 134.26 may be applied to articles properly marked at the time of importation that will be repackaged in retail containers after their release from Customs custody. In HRL 559244, dated March 12, 1996, Customs stated that it is clear that 19 C.F.R. 134.26 "covers situations where the containers and not the articles are marked (as an exception to the marking requirements) and the articles will be repacked."

Accordingly, the certification requirements provided at 19 C.F.R. 134.26 will apply to those articles marked with their country of origin, or to those articles which are imported in properly marked containers. Fairchild Semiconductor Corporation has indicated that the imported devices will not be individually marked, but will be imported in properly marked containers (cartons). Therefore, the requirements of 19 C.F.R. 134.26 may be used.

Section 134.26, Customs Regulations (19 C.F.R. 134.26), provides in pertinent part that:

If an imported article subject to these requirements is intended to be repacked in retail containers ... after its release from Customs custody, or if the port director having custody of the article, has reason to believe such article will be repacked after its release, the importer shall certify to the port director that: (1) If the importer does the repacking, he shall not obscure or conceal the country of origin marking appearing on the article, or else the new container shall be marked to indicate the country of origin of the article in accordance with the requirements of this part; or (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer shall notify such purchaser or transferee, in writing, at the time of sale or transfer, that any repacking of the article must conform to these requirements...

Therefore, this procedure may be used if the container in which the devices are packed is properly marked with the device's country of origin, and if Fairchild Semiconductor Corporation notifies the U.S. distributor that the devices intended for resale must be properly marked after any subsequent repackaging. 19 C.F.R. 134.26(a) also provides that the certification statement may be submitted in blanket form to cover all importations of a particular product for a given period.

Based on the facts presented, the devices may be excepted from marking pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 C.F.R. 134.32(d) and only the outer container in which the devices are packed must be marked with the country of origin of the devices. In accordance with T.D. 75-187, the proposed marking as stated above of the containers meets the requirements of 19 U.S.C. 1304. Furthermore, the devices may be repackaged after their release from Customs custody if the requirements of 19 C.F.R. 134.26 are satisfied. The requirements of 19 C.F.R. 134.26 will be satisfied if the devices are imported in properly marked containers, Fairchild Semiconductor Corporation informs the U.S. distributor that if the devices are repackaged, they must be repackaged in properly marked containers, and submits the required certification to the port director.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).

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 Eileen S. Kaplan at 212-466-5673.

Sincerely,

Robert B. Swierupski
Director,

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