HQ 562223 - Country of origin on invoices; 19 U.S.C. 1481(a)(10); 19 CFR 141.86(10) - United States International Trade Commision Rulings

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HQ 562223

May 21, 2002

MAR-2 RR:CR:SM 562223 KSG

CATEGORY: MARKING

George R. Tuttle,III
Three Embarcadero Center
Suite 1160
San Francisco, California 94111

RE: Country of origin on invoices; 19 U.S.C. 1481(a)(10); 19 CFR 141.86(10)

Dear Mr. Tuttle:

This is in response to your letter of August 22, 2001, on behalf of Microchip Technology Inc., requesting a binding ruling on the country of origin requirements for invoices for certain imported sample integrated circuits.

FACTS:

Microchip Technology Inc., manufactures integrated circuit products, such as field-programmable RISC micro-controllers, high-performance linear and mixed-signal power management and thermal management devices; micro-peripheral products including interface devices; and serial EEPROMs, which are used in automotive, communications, computing, consumer and industrial control markets.

These products are assembled and tested in various countries including: Thailand, Korea, Hong Kong, Malaysia, China, Indonesia, Taiwan and the Philippines. The integrated circuits are each marked and/or embossed with the name of the country where the assembly occurred, which is considered the country of origin. All the integrated circuits are held in inventory in Thailand.

This case involves sample shipments that are imported into the port of Anchorage, Alaska. Sample devices are sent to customers on request and are chiefly used for qualification or to determine the suitability of the design and function of the part. The sample devices are made up of excess material from various assembly lots and customer-returned products that are fully functional. Microchip does not maintain lot segregation or traceability for these products. Microchip cannot produce an invoice automatically, which prints the origin of the assembly lot from which the device was produced. You state that manually annotating the invoice would be costly and time-consuming. You ask if Microchip can list multiple countries of origin such as the following example for the invoice country of origin requirement:

Articles contained in this carton are marked with their actual country of origin, which may be one or more of the following countries: Taiwan, Korea, Hong Kong, Malaysia, People's Republic of China, Indonesia, Philippines, or Thailand.

ISSUE:

Whether the proposed country of origin statement satisfies the invoice requirements for the sample products described above.

LAW AND ANALYSIS:

Section 481(a)(10) of the Tariff Act of 1930, as amended (19 U.S.C. §1481(a)(10)) provides that invoices shall set forth “[a]ny other fact that the Secretary may by regulation require as being necessary to a proper appraisement, examination and classification of the merchandise.” An implementing regulation, section 141.86(a)(10) of the Customs Regulations, requires each invoice of imported merchandise to set forth information on the country of origin of the merchandise. In Treasury Decision (T.D.) 85-79, in response to a comment that the country of origin statement on the commercial invoice was not practical “inasmuch as many exporters do not know the country of origin and few problems have arisen on this matter”, Customs explained that:

The country of origin statement is extremely important considering the fact that much imported merchandise is subject to quota limitations and visa requirements. The statement would assist importers in determining the country of origin of goods, thereby alleviating possible liability on domestic importers’ parts if a false country of origin were shown on the invoice prepared by the exporter. Therefore, we are retaining this provision in §141.86(a).

In addition to being a factor in admissibility decisions, accurate origin information can be crucial when determining whether imported merchandise qualifies for a special trade program or is subject to a temporary modification established pursuant to trade legislation. It can also be a component of appraisement, such as when a transaction value of identical or similar merchandise is being considered.

With respect to its shipments of sample devices, Microchip is presenting invoices which contain an origin statement that is “substantially similar” to the country of origin marking statement approved by Customs in Headquarters Ruling Letter ("HQ") 558755, dated January 18, 1995, for volume shipments of integrated circuits. In HQ 558755, the shipments consisted of integrated circuits which were volume packaged in inner and outer shipping cartons. In contrast, in this case the shipments contain single integrated circuits which are sent as sample devices to Microchip customers. Microchip is asking for permission to place a marking statement which is “substantially similar” to the marking statement authorized by HQ 558755 on the invoices relating to the shipments of sample devices.

It appears that the origin information appearing on invoices relating to shipments of samples is less specific than the origin information provided on the invoices pertaining to volume shipments. The reason for this is that Microchip’s system allows the automatic printing of specific origin information on the volume shipment invoices but not on the invoices for samples. The company admits that it could physically inspect each sample device and manually annotate the invoice with the device’s country of origin. However, it does not want to do so because “such a process would not be physically or economically practical.” Microchip is thus asking for permission to use the multi-country marking statement on its sample device invoices to fulfill the country of origin invoice requirement of 19 CFR 141.86(a)(10).

An invoice of a shipment containing merchandise from more than one country would have to reflect the quantities and values attributable to each country. Microchip integrated circuits volume packaged and shipped in accordance with HQ 558755 would be subject to these invoicing requirements. Microchip suggests that its invoices for integrated circuits shipped in accordance with HQ 558755 reflect this type of information. It does so by stating that for those shipments, “when an invoice is generated, information on the part’s location of manufacture or assembly is automatically printed on the invoice.” Without seeing a representative invoice, we cannot state with certainty that these invoices meet the requirements of §141.86(a)(10). However, these are not the invoices at issue. Rather, the issue is the sufficiency of the invoices accompanying the shipments of single integrated circuit sample devices.

Accordingly, as discussed above, the origin information on invoices must be specific. Microchip’s request to be able to use a multi-country origin statement on its invoices of sample devices would not meet that specificity standard. The fact that it would be inconvenienced by having to physically inspect each sample device and manually write the origin on the invoice is unfortunate but does not excuse Microchip from complying with 19 CFR §141.86(a)(10). The invoice must reflect the actual country of origin of the sample device included in the shipment.

We further note that the invoice origin requirement serves a very different and distinct function than the country of origin marking requirements set forth in 19 U.S.C. 1304. The 1304 requirement serves the function of informing an ultimate purchaser in the U.S. of the origin of the imported good. The invoice requirement informs both the purchaser and the U.S. government of the country of origin of the goods and impacts on trade statistics collected by the government as well as selectivity criteria and other uses by different government agencies. Because of the difference in purpose of the invoice requirements and country of origin marking requirements, we find that the sample goods in this case cannot list multiple countries of origin such as the example given on the invoices to satisfy the requirements of 19 U.S.C. 1481(a)(10) and 19 CFR 141.86(10).

HOLDING:

Listing multiple countries of origin on the invoice of imported goods does not satisfy the invoice requirements of 19 U.S.C. 1481(a)(10) and 19 CFR 141.86(10).

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
Commercial Rulings Division

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