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February 4, 1999

MAR-2 RR:NC:2:238 D86229

CATEGORY: MARKING

Peter H. Oppenheimer, Esq.
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20005-3960

RE: COUNTRY OF ORIGIN MARKING FOR IMPORTED SPECTRACIDE TERMINATE™ TERMITE HOME DEFENSE SYSTEM ; ARTICLE 509

Dear Mr. Oppenheimer:

This is in response to your letter dated December 22, 1998, on behalf of your client, United Industries Corporation (“United”), requesting a ruling on the country of origin marking requirements for an imported article described as the ”Spectracide Terminate™ Termite Home Defense System.” The product is indicated for use by homeowners to protect against subterranean termite infestation.

The submitted sample consists of a sealed, rectangular, paperboard carton, measuring approximately 15½” x 5½” x 5”, which bears the following country of origin marking: “Stakes assembled in Mexico from U.S. components. Insertion tool made in Canada.”

Each carton contains two plastic trays, one of which holds a specially designed plastic insertion tool, referred to as a “dibble,” which serves to dig holes in the ground for the placement of the twenty termite “stakes” contained in the remaining tray. Each stake consists of a 4"-long, perforated, plastic tube, with a plastic cap, into which is inserted a folded-up piece of cellulosic material resembling corrugated cardboard. The cellulose material has been treated with TransFlur™ (common name: Sulfluramid, CAS# 4151-50-2), a non-aromatic, non-modified-aromatic insecticide (Section VI, Additional U.S. Note 2, HTS, noted) designed to kill termites. A transparent, adhesive label bearing, inter alia, the chemical composition of the pesticide extends around the top of each stake, directly below the cap. A product brochure is also enclosed within the carton. Finally, although you indicate the presence of printed instruction sheets, none were found with the submitted sample. When placed around the home, subterranean worker termites, foraging in the soil for food, find the stakes, enter through the perforations, consume the insecticide-coated “food,” and die.

You indicate in your letter that the subject merchandise is offered for retail sale in three different sizes, namely: the 20-stake carton (i.e., the submitted sample), a 40-stake carton, and a 60-stake carton. Accordingly, in our opinion, pursuant to General Rule of Interpretation 3(b), HTS, the subject product constitutes “goods put up in sets for retail sale,” with the essential character imparted by the termite “stakes.” Furthermore, for purposes of applying 19 C.F.R. §102.11 (see below) to the case at hand, we find that the subject product, upon importation into the U.S., is properly classifiable within subheading 3808.10. 5000, HTS, which provides for “[I]nsecticides, ... , put up in forms or packings for retail sale or as preparations or articles (for example, sulfur-treated bands, wicks and candles, and flypapers): Insecticides: Other: Other: Other.”

You state in your letter that, with the exception of the “dibble,” which is manufactured in Canada from plastic of Canadian origin, all the remaining components of the subject product, including the retail sales cartons, product brochures and adhesive labels, are manufactured and printed, respectively, in the United States. With respect to the cellulose inserts, you indicate that they are cut to size in Mexico from continuous lengths of (U.S. produced) cellulose material which has been sprayed with TransFlur™ and then rolled onto spools for shipment to Mexico. Again, for purposes of applying 19 C.F.R. §102.11 to the case at hand, we also find that the (U.S. produced) insecticide-treated cellulose material which is exported to Mexico in continuous lengths on spools is properly classifiable as an insecticidal article within subheading 3808.10.5000, HTS.

You describe the operations that the various components are subjected to, after export by their respective manufacturers to Mexico, as follows: The continuous lengths of insecticide-treated cellulose material are fed through a piece of equipment called a “sheeter,” which is provided by United. The sheeter cuts the continuous lengths of treated cellulose material into pieces approximately 3¼” x 6½” in size. An “ingredient sticker” (i.e., the adhesive label) is manually applied to each plastic tube prior to inserting a piece of the cellulose material into the plastic tube. The plastic cap is then permanently joined to the tube with a hammer-like tool to ensure proper “nesting,” after insertion of the cellulose material into the tube. The stake is now finished, and workers place the appropriate number of stakes (i.e., 20, 40, or 60) into a plastic tray. This plastic tray is now fed through another piece of equipment provided by United which seals it with a piece of mylar film. The insertion tool is placed in its own plastic tray and, along with a tray of stakes and printed instructions, is placed into the retail selling unit carton. The retail carton, which, to reiterate, is marked “Stakes assembled in Mexico from U.S. components. Insertion tool made in Canada,” is then fed into a third piece of equipment called a carton sealer, also provided by United, which glues the flaps shut. Finally, the retail selling unit cartons are packed into larger shipping cartons (also supplied by United) for export to the United States.

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.

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 134.45(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. 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.

The rules for determining when, for marking purposes, the country of origin of an imported good is one of the parties to "NAFTA" are set forth in Part 102, Customs Regulations.

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 Part 102 of the regulations to the facts of this case, we find that Section 102.11(c) is the rule which must be applied to the imported goods. Under this rule, the country of origin is the country or countries of origin of all materials that merit equal consideration for determining the essential character of the good. All of the components of the set, foreign and domestic, must be considered. In this case, the termite stakes and insertion tool merit equal consideration in determining the essential character of the “Spectracide Terminate™ Termite Home Defense System.” Therefore, the country of origin of the subject product is the countries of origin of these components, i.e., Canada and the U.S. However, since the components from the U.S. are not required to be marked under 19 U.S.C. §1304, the U.S. is not required to appear on the country of origin marking of the set. Furthermore, pursuant to 19 U.S.C. §1304(a)(3)(D) and 19 C.F.R. §134.32(d), an exception from the individual marking requirements is applicable where the marking of the container of an imported article will reasonably indicate the origin of the article. This exception is normally applied in cases where the imported article is imported in a properly marked container and the ultimate purchaser in the U.S. will receive it in its original marked container. Accordingly, provided the purchaser at retail receives the subject product in a box properly marked with the country of origin, an exception to the individual marking requirements will be applicable and the individual items within the set will not require country of origin marking.

Based on the foregoing, this office finds that the marking presently appearing on the submitted sample, i.e., “Stakes assembled in Mexico from U.S. components. Insertion tool made in Canada,” is inappropriate since, as indicated above, the country in which the article was finally assembled, i.e., Mexico, is not the country or one of the countries of origin of such article. Section 134.43(e), Customs Regulations. Therefore, in our opinion, the only appropriate country of origin marking on the retail carton is as follows: “Insertion tool made in Canada.” Whether any reference can be made to the U.S. components in the subject product is an issue under the jurisdiction of the Federal Trade Commission (FTC). You may contact the FTC, Division of Enforcement, 6th & Pennsylvania Avenue, N.W., Washington, DC 20508, telephone number 202-326-2222, on the propriety of any indication that part of the article is made in the U.S.

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 212-466-5770.

Sincerely,

Robert B. Swierupski

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