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HQ 562048





July 11, 2002

MAR-2 RR:CR:SM 562048 KSG

CATEGORY: MARKING

Port Director
U.S. Customs Service
4430 E. Adams Drive
Tampa, FL 33605

RE: Protest No. 1801-00-200031 and 200032; 19 CFR 134.25; marking duties; CF 4647 not mandated; proper notice to subsequent purchaser not provided at time of sale or transfer

Dear Director:

The above-referenced protests were forwarded to this office for further review. The protests were filed by the surety, American Motorist Insurance, on behalf of Jugos del Sur SA and Sower SA, two companies that imported concentrated fruit juice in bulk from Argentina.

FACTS:

This case involves bulk concentrated fruit juice entered at the Port of Tampa, Florida. The protests in this case were timely filed and contest the assessment of marking duties. The first entry, made by Jugos del Sur SA ("Jugos"), on April 5, 1999, was for bulk concentrated pear juice. The second entry, made by Sower SA ("Sower"), on May 10, 1999, was for bulk concentrated apple juice. The juice involved in this case was sold or transferred. The major customers of the fruit juice are Nestle, Minute Maid, Tropicana and Mott.

Requests for Information (CF 28's) were sent to Jugos and Sower by Customs on June 9, 1999, stating: "A repackaging certificate, signed by a company official, may be required pursuant to 19 CFR 134.25/26. A negative response is required. A certificate must be port specific." Your office stated that no responses were received within 30 days. Second CF 28's were issued to both importers on August 12, 1999. Your office stated that no responses were received from the importers following the second CF 28's.

Since the petitioner failed to submit a repackaging certificate to Customs, a penalty was issued by means of a CF-5955A pursuant to 19 U.S.C. 1509 for failure to comply with 19 CFR 34.25/26. Marking duties were issued in a rate advance on the entries. Both entries were liquidated on May 12, 2000. A demand on the surety for the Jugos entry was issued on August 27, 2000, and for the Sower entry on October 22, 2000.

In response to the penalty notice, Sower and Jugos each submitted to Customs two separate letters. Sower submitted a letter to Customs dated March 20, 2000, stating that it did not repackage the juice, that the juice was imported in properly marked bulk containers and that the invoices and packaging provided to the purchaser or repacker at the time of sale or transfer indicated the country of origin of the juice. The second letter submitted, also dated March 20, 2000, was addressed to the purchaser of the juice and informed the purchaser of the country of origin of the juice, as stated on the invoices and packaging, and informed the purchaser that they were required to properly mark the container of the juices with the country of origin.

Jugos submitted a letter to Customs dated March 21, 2000, stating that it did not repackage the juice, that the juice was imported in properly marked bulk containers and that the invoices and packaging provided to the purchaser or repacker at the time of sale or transfer indicated the country of origin of the juice. The second letter submitted, also dated March 21, 2000, was addressed to the purchaser of the juice and informed the purchaser of the country of origin of the juice, as stated on the invoice and packaging, and informed the purchaser that they were required to properly mark the container of the juices with the country of origin.

The protest was filed by counsel on November 7, 2000, on behalf of American Motorists Insurance Company.

ISSUE:

Whether marking duties were properly assessed in this case.

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed under 19 U.S.C. 1514 and the matter is protestable under 19 U.S.C. 1514(a)(2).

Section 304 of the Tariff Act of 1930 (19 U.S.C. 1304), as amended, provides that unless excepted, every article of foreign origin 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. Section 1304(h) provides:

If at the time of importation any article (or its container, as provided in subsection (b) of this section) is not marked in accordance with the requirements of this section, and if such article is not exported or destroyed or the article (or its container, as provided in subsection (b) of this section) marked after importation in accordance with the requirements of this section (such exportation, destruction, or marking to be accomplished under customs supervision prior to the liquidation of the entry covering the article, and to be allowed whether or not the article has remained in continuous customs custody), there shall be levied, collected, and paid upon such article a duty of 10 per centum ad valorem, which shall be deemed to have accrued at the time of importation, shall not be construed to be penal, and shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements of 19 U.S.C. 1304. The relevant provision, 19 CFR 134.25(a), provides, in relevant part, as follows:

Certification requirements. If an article subject to these requirements is intended to be repacked in new containers for sale to an ultimate purchaser 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: 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. The importer, or his authorized agent, shall sign the following statement.

CERTIFICIATE OF MARKING-REPACKED J-LIST ARTICLES AND ARTICLES INCAPABLE OF BEING MARKED

(Port of entry)___________ I, of _______certify that if the article(s) covered by this entry (entry no.(s) dated ), is (are) repacked in a new container(s), while still in my possession, the new containers, unless excepted, shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the container(s) will permit, in such manner as to indicate the country of origin of the article(s) to the ultimate purchaser(s) in accordance with the requirements of 19 U.S.C. 1304 and 19 CFR part 134. I further certify that if the article(s) is (are) intended to be sold or transferred by me to a subsequent purchaser or repacker, I will notify such purchaser or transferee, in writing, at the time of sale or transfer, of the marking requirements.

The certification statement may appear as a typed or stamped statement on an appropriate entry document or commercial invoice, or on a preprinted attachment to such entry or invoice; or it may be submitted in blanket form to cover all importations of a particular product for a given period (e.g., calendar year). If the blanket procedure is used, a certification must be filed at each port where the article is entered.

Section 134.25(c) provides that the certification statement shall be filed with the port director at the time of entry summary. Section 134.25(d) sets forth the notice to be provided to the subsequent purchaser or repacker:

NOTICE TO SUBSEQUENT PURCHASER OR REPACKER

These articles are imported. The requirements of 19 U.S.C. 1304 and 19 CFR Part 134 provide that the articles or their containers must be marked in a conspicuous place as legibly, indelibly and permanently as the nature of article or container will permit, in a such a manner as to indicate to an ultimate purchaser in the United States, the English name of the country of origin of the article.

Section 134.25(e) provides that failure to comply with the certification requirements in paragraph (a) may subject the importer to a demand for liquidated damages under 134.54(a) and for the additional duty under 19 U.S.C. 1304.

Your office contends that a repackaging certificate in accordance with 19 CFR 134.25/26 is required in this case and since it was not provided, a CF-28 was issued as a reminder to the importer to produce a certificate or demonstrate why one is not required.

Counsel for the protestant contends that Customs did not give the importers appropriate notice that certification was required. Counsel states that no CF 4647 was issued in this case and argues that such form is required. Counsel also argues that the March 20, 2000, and March 21, 2000, letters submitted to Customs prior to liquidation satisfy the requirements of 19 CFR 134.25. Counsel's first contention is that a CF 4647 is required prior to the imposition of marking duties. The United States Customs Court ruled on this issue in A.N. Deringer, Inc. v. United States, 51 Cust. Ct. 21 (1963). The plaintiff argued that there was no liability for special marking duties unless and until the collector issued notice on Customs Form 4647. The court held that the notice provided by a CF 4647 is not a condition precedent to marking duty liability. The court stated that if "imported merchandise of foreign origin isnot marked, and not exempted, and if in such case the merchandise is not destroyed or exported under customs supervision, the marking duties may not be remitted or avoided for any cause. That is the law as Congress enacted it." Customs has also addressed this question and followed Deringer in HRL 734103, dated April 13, 1992, and HRL 559717, dated December 22, 1997. Based on the above court case, we find that a CF 4647 is not required prior to the imposition of marking duties.

Marking duties were assessed in this case for the failure to submit repackaging certifications. In this case, bulk concentrated juice was imported which likely will not be received by the ultimate purchaser in bulk form. See National Juice Products Association v. United States, 628 F. Supp. 978 (CIT 1986), in which the court held that imported orange juice concentrate did not undergo a substantial transformation when converted into reconstituted orange juice and therefore, the retail packages had to be marked with the origin of the imported concentrate. Based on National Juice, it is likely that the repackagers were not the ultimate purchasers and the certificate was required to ensure that the packages received by the ultimate purchasers were properly marked with the origin of the juice concentrate. Therefore, the port director had reason to believe that the bulk fruit juice was going to be repackaged after importation. Pursuant to 19 CFR 134.25(a), the port director had the authority to require a repackaging certificate. Therefore, the port director was proper in requesting a repackaging certification by issuing a CF 28 in this case.

By regulation, the importer must notify the purchaser or transferee at the time of sale or transfer in writing using the notice language set forth in 19 CFR 134.25(d) of the country of origin marking requirements and pursuant to 19 CFR 134.25(a), must also certify to Customs that the importer will advise the purchaser or transferee of the marking requirement . In this case, the record includes copies of two letters from each of the two importers, Jugos and Sower: a letter addressed to Customs (dated March 20, 2000, for Sower and March 21, 2000, for Jugos), and a letter addressed to the subsequent purchasers (dated March 20, 2000, for Sower and March 21, 2000, for Jugos).

The first issue to be addressed is whether the letter to Customs satisfies the requirements of 19 CFR 134.25. The letter addressed to Customs stated: 1) that the imported juice was not repackaged in new containers by Jugos or Sower; 2) that the juice was imported in properly marked containers; 3) that the invoices and imported bulk packaging furnished to the purchaser or transferee indicated that the country of origin of the juice was Argentina. Customs does not assert that Jugos or Sower repackaged the juice in question or that the juice was improperly marked when imported in bulk. While the record shows that the purchaser was notified of the country of origin marking requirement with respect to the goods, the certification to Customs did not include that fact as required pursuant to 19 CFR 134.25. Therefore, the certification to Customs was lacking in this respect.

Secondly, the issue of whether the letter to the purchaser or transferee satisfies the requirements of 19 CFR 134.25(d) must be addressed. The timeliness of the notice given to the purchaser or transferee is of critical importance. The purchaser or transferee must receive the required notice at the time of sale or transfer. If the purchaser or transferee receives this information after the sale or transfer, the information is of no value; the imported merchandise is not available to be correctly marked. While the March 20, 2000, and March 21, 2000 letters, which were addressed to the subsequent purchasers, provide the required notice set forth in 19 CFR 134.25(d), they were not timely sent. The date of sale or transfer of the juice was not cited in the March 20, 2000, and March 21, 2000, letters but it is apparent from the letters that the sale or transfer had already taken place. Providing this information to the subsequent purchaser after the sale or transfer to the re-packer does not comply with the regulation which requires the notice to be given at or before the sale or transfer.

No evidence was submitted to show that the proper notification was provided to the subsequent purchaser at the time of sale or transfer.

Since neither the letters to the purchasers nor the letters to Customs satisfy the marking certification requirements set forth in 19 CFR 134.25, we find that marking duties were properly assessed in this case.

Accordingly, this protest should be denied in full.

HOLDING:

Marking duties were properly assessed in this case because the importers failed to provide the required notice to the subsequent purchasers at the time of sale or transfer as required by 19 CFR 134.25. The protest is denied in full. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, this decision should be attached to Customs Form 19, Notice of Action, and be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of this decision. Sixty days from the date of this decision, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and to the public via the Diskette Subscription Service, the Freedom of Information Act, and other public access channels.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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