HQ 562375 - Application for Review and Protest No. 3901-00-100526; Assessment of Marking Duties; Notice to Redeliver (CF 4647); Cellular telephones; Customs unable to verify marking - United States International Trade Commision Rulings

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HQ 562375

September 18, 2002

MAR 05 RR:CR:SM 562375 KKV

CATEGORY: MARKING

Port Director of Customs
610 Canal Street
Chicago, IL 60607

RE: Application for Review and Protest No. 3901-00-100526; Assessment of Marking Duties; Notice to Redeliver (CF 4647); Cellular telephones; Customs unable to verify marking

Dear Sir or Madam:

This is in response to your memorandum dated March 14, 2002, which forwards for our review an Application for Further Review of Protest No. 3901-00-50026. The protest, timely filed by counsel on behalf of Selectron Technology, Inc., involves the country of origin marking requirements applicable to one shipment of cellular telephones from Mexico. We regret the delay in responding.

FACTS:

At issue is the assessment of marking duties in connection with a shipment of cellular telephones manufactured by Solectron Technology at its Mexican facility and imported into the U.S at the port of Chicago, Illinois. Entry 110-xxxxx163, consisting of 5 pallets containing 6,000 cellular telephones was imported on November 12, 1999. Upon importation, it was determined that the shipment was not legally marked. A CF 4647 was issued on November 12, 1999 and the importer was given permission to remove the shipment to the premises of the ultimate consignee for marking. Upon receipt of the signed CF 4647 dated December 2, 1999, a Customs inspector arrived at the consignee’s warehouse on December 3, 1999, to verify completion of marking and to release the goods but was unable to locate the shipment. Accordingly, marking duties in the amount of $28,766.00 were assessed. A claim for liquidated damages was also issued on February 16, 2000 and the entry was liquidated on March 17, 2000. The subject protest was timely filed on June 9, 2000.

ISSUE:

Whether the assessment of marking duties was proper in connection with this case.

LAW AND ANAYLSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), 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 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. Further, 19 U.S.C. 1304(h) provides that 10 percent marking duties shall be levied, collected and paid if an imported article is not properly marked with the country of origin at the time of importation and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties 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 and exceptions of 19 U.S.C. 1304. Section 134.51, Customs Regulations (19 CFR 134.51), provides that when articles or containers are found upon examination not to be legally marked, the port director shall notify the importer on Customs Form (CF) 4647 to arrange with the port director’s office to properly mark the article or container or to return all released articles to Customs custody for marking, exportation or destruction. This section further provides that the identity of the imported article shall be established to the satisfaction of the port director. In lieu of direct Customs supervision, a certificate of marking may be submitted by an importer, together with a marked sample. See 19 CFR 134.52(a). Customs officials are authorized to conduct spot checks (such as the verification conducted in this case), and may require that the identity of the imported article be established to their satisfaction. 19 CFR 134.52(c), 134.51(b). The importer is instructed on the CF 4647 that the article “must be held until marking is verified or notification is received that marking is acceptable.”

Section 1304(f) states that marking duties “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.” See C.S.D. (Customs Service Decision) 92-32, also published as Headquarters Ruling Letter HRL 734151, dated April 6, 1992. As noted by the United States Customs Court in A.N. Deringer, Inc. v. United States, 51 Cust. Ct. 21, C.D. 2408 (1963), those who import goods into the United States accept certain responsibilities that have been laid on them by Congress. One such responsibility, and an important one, is to see that imported merchandise of foreign origin is properly marked to show the country of origin, before it enters into the commerce of the United States.

With regard to the subject entry, counsel for the importer indicates that it imported a series of entries containing unmarked cellular telephones and admits that a certain number of handsets (1500) were delivered without having been marked with the country of origin. We are informed that “[b]ecause it is impossible to determine which entry the 1500 handsets were imported againstwe have chosen the subject entry to address this error.” The protestant alleges that the remainder of the handsets were in compliance, and submits a letter from the consignee dated December 2, 1999, stating that the merchandise in this entry (as well as two others) had been marked by the consignee, and asserts that the importer believed that the merchandise was being held at the consignee’s warehouse for further inspection by Customs. The protestant asserts that because only 1500 handsets were unmarked, marking duties should be assessed only upon the value of this merchandise.

In HRL 731775, dated November 3, 1988), Customs ruled that two prerequisites must be present in order for marking duties to be properly assessed under 19 U.S.C. 1304(h). These two prerequisites are:
the merchandise was not legally marked at the time of importation, and
the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation.

Here, it is not contested that the entries were not legally marked at the time of importation. Moreover, the protestant admits that merchandise from this shipment was delivered into the commerce of the United States, without Customs’ authorization and without country of origin marking. With regard to the remainder of the shipment, although the importer asserts that remarking was accomplished by the consignee, it does not deny that the failure of the consignee to hold the entries prevented Customs from verifying the importer’s certification of marking. Therefore, marking duties were properly assessed against the value of the entire shipment. You are instructed to deny the protest in full.

HOLDING:

The protestant does not deny that the subject telephones were not legally marked with their country of origin at the time of importation, nor does the protestant deny that Customs was unable to locate any merchandise from the subject shipment at the consignee’s premises and verify that this particular merchandise was properly marked prior to liquidation. Accordingly, the assessment of marking duties was proper and the protest should be denied in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550- 065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant attached to the Form 19, Notice of Action, no later than 60 days from the date of this letter. Any reliquidation of the entries in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

Myles B. Harmon

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