HQ 562847 - Acceptibility of proposed country of origin marking; “Cosmopolitan 101” cocktail kit; 19 CFR 134.47; trade name; adhesive sticker on bottom of box not conspicuous - United States International Trade Commision Rulings

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HQ 562847

December 4, 2003

MAR-05 RR:CR:SM 562847 KKV

CATEGORY: MARKING

Nellie M. Davis
Arias Logistics, Inc.
543 B-1 Americas Avenue
El Paso, TX 79907

RE: Acceptibility of proposed country of origin marking; “Cosmopolitan 101” cocktail kit; 19 CFR 134.47; trade name; adhesive sticker on bottom of box not conspicuous

Dear Ms. Davis:

This is in response to your letter dated September 4, 2003, on behalf of International Data L.L.C., which requests a binding ruling regarding the acceptability of the proposed country of origin marking displayed on a “Cosmopolitan 101” cocktail kit. A sample of the kit and its packaging has been submitted for our review.

FACTS:

The “Cosmopolitan 101” kit consists of the following items, which are stated to originate as indicated below:

5.5-ounce glass bottle of Cosmopolitan liquid drink mix (USA); a 3-ounce plastic cylinder with a metal lid, that contains pink granulated sugar (USA); a box containing 4 glass cocktail picks (China); a recipe booklet made of laminated cardboard cards on a metal ring (Mexico); a music CD (USA).

The articles are contained in a transparent plastic box, with a cardboard lid. In addition to the product description and information, both the box and constituent articles are printed with the phrase “El Paso Chile Company.” With the exception of the music CD, which is labeled as a product of the U.S., none of the articles is individually marked with its respective country of origin. You propose to mark the kit with an adhesive sticker, placed on the bottom of the box, which reads:

PACKAGED IN MEXICO
Plastic Box: Made in Canada
Glass Picks: Made in China
Recipe Cards, Cardboard Base,
Lid & Inserts: Made in Mexico
Metal Ring: Made in Korea

ISSUE:

Whether the proposed country of origin marking is acceptable under 19 U.S.C. 1304 and 19 CFR Part 134.

LAW AND ANALYSIS:

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 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 134.1(d) defines the "ultimate purchaser" generally as the last person in the United States who will receive the article in the form in which it was imported. The marking must be conspicuous to the ultimate purchaser. Here, the ultimate purchaser is the person who buys the cocktail kit at retail. The "country of origin" for marking purposes is defined by section 134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean the country of manufacture, production, or growth of any article of foreign origin entering the U.S.

When articles manufactured in different countries are combined or assembled, Customs must determine the country of origin, for marking purposes. The country of origin is the country where the article last underwent a "substantial transformation", i.e., processing which results in a change in the article's name, character, or use. See section 134.35, Customs Regulations (19 CFR 134.35). In this instance, the packaging of the cocktail kit items into a set does not constitute a substantial transformation because the resulting product is not a new article in which the constituents lose their separate identities. Each kit item remains clearly identifiable. Therefore, under section 304 of the Tariff Act, the kits must be marked to indicate to the ultimate purchaser in the U.S. the foreign origin of the items contained therein.

The required marking for such articles is addressed in Treasury Decision (T.D.) 91-7, in which Customs determined that materials of foreign origin which comprise sets, mixtures, or composite goods must be marked separately to indicate their country of origin unless substantially transformed. Pursuant to the general marking requirements and T.D. 91-7, the cocktail kits must be marked to indicate the country of origin of the components. As stated in Headquarters Ruling Letter (HRL) 734569, dated March 17, 1993, regarding T.D. 91-7:

In the interest of minimizing the burden on the importer of marking of sets/kits comprised of items sourced from a variety of countries while also providing the ultimate consumer with the country of origin information likely to significant to his purchasing decision, only the countries of origin of the major components must be designated in the marking legend.

Therefore, in accordance with T.D. 91-7, with regard to the proposed label at issue here, it is our opinion that only the origin of the glass cocktail picks and recipe booklet must be indicated in order to satisfy 19 U.S.C. 1304, such that the label may read: Packaged in Mexico, Glass Picks: Made in China, Recipe Cards: Made in Mexico.

One of the exceptions to the general marking requirement is codified in 19 U.S.C. 1304(a)(3)(D) (as implemented by 19 CFR 134.32(d)), which provides that an article may be excepted from marking if the marking of its container will reasonably indicate its origin to the ultimate purchaser. As provided in section 134.41, Customs Regulations (19 CFR 134.41), the country of origin marking is considered to be conspicuous if the ultimate purchaser in the United States is able to find the marking easily and read it without strain. The degree of permanence of the marking should be at least sufficient to insure that in any reasonably foreseeable circumstance, the marking shall remain on the article until it reaches the ultimate purchaser unless it is deliberately removed. The marking must survive normal distribution and store handling.

Of concern here are the requirements of two related provisions of the marking regulations, section 134.46, Customs Regulations (19 CFR 134.46) and section 134.47, Customs Regulations (19 CFR 134.47). Specifically, 19 CFR 134.46 requires that, in instances where the name of any city or locality in the U.S., or the name of any foreign country or locality other than the name of the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by “Made in,” “Product of,” or other words of similar meaning. Customs has ruled that in order to satisfy the close proximity requirement, the country of origin marking must appear on the same side(s) or surface(s) in which the name of the locality other than the country of origin appears. See HRL 708994, dated April 24, 1978. The more restrictive requirements of 19 CFR 134.46 are designed to alleviate the possibility of misleading an ultimate purchaser with regard to the country of origin of an imported article, if such article or its container includes language which may suggest a U.S. origin (or other foreign locality not the correct country of origin).

Section 134.47, Customs Regulations (19 CFR 134.47), provides that when as part of a trademark or trade name or as part of a souvenir marking, the name of a location in the U.S. appears, the article shall be legibly, conspicuously, and permanently marked to indicate the name of the country of origin of the article preceded by the words "Made in," "Product of," or other similar words, in close proximity or in some other conspicuous location. In such circumstance, no comparable size requirement exists.

The purpose of both provisions is the same, namely to prevent the ultimate purchaser from being misled or deceived when the name of a country or place other than the country of origin appears on an imported article or its container. The critical difference between the two provisions is that 19 CFR 134.46 requires that the name of the actual country of origin appear "in close proximity" to the U.S. reference and in lettering of at least comparable size. By contrast, 19 CFR 134.47 is less stringent, providing that when as part of a trade name, trademark or souvenir mark, the name of a location in the U.S. or "United States" or "America" appears on the imported article, the name of the country of origin must appear in close proximity or "in some other conspicuous location.” In other words, the latter provision triggers only a general standard of conspicuousness. In either case, the name of the country of origin must be preceded by "Made in", "Product of", or other similar words.

In the instant case, the outermost container and the individual articles are printed with the phrase “El Paso Chile Company.” Although 19 CFR 134.47 applies when a locality reference appears as part of a trademark or trade name, no evidence has been presented which demonstrates that this phrase has been registered as a trademark nor has it been alleged that this phrase constitutes a trade name.

However, we refer to HRL 559785, dated September 11, 1996, which discussed the application of 19 CFR 134.47 in connection with a trade name. In particular, a trade name was defined in the following manner:

A trade name is
. . . descriptive of the manufacturer or dealer for protection in trade, to avoid confusion in business, and to secure the advantages of a good reputation and is applied more to the goodwill of a business than as an identification of a product [citation omitted].

A name used in trade to designate a particular business of certain individuals considered somewhat as an entity, or the place at which a business is located, or of a class of goods, but which is not a technical trade-mark either because not applied or affixed to goods sent into the market or because not capable of exclusive appropriation by anyone as a trade-mark.

BLACK'S LAW DICTIONARY 1339 (5th ed. 1979).

In HRL 559785, supra, Customs acknowledged that “Oshman’s Supersports USA” was a major sporting goods store with retail outlets throughout much of the United States. Concluding that the phrase "Oshman's Superstores USA" on the two side panels of the gymbag did not trigger the special marking requirements of 19 CFR 134.46 because the word "USA" is used as part of a trade name and an ultimate purchaser would not reasonably construe such a reference on the gymbag to indicate the country of origin of the article, Customs held that the less stringent requirements of 19 CFR 134.37 were applicable.

Similarly, in this case our research reveals that the “El Paso Chile Company” has conducted business operations under that name for approximately 20 years. Moreover, the phrase “El Paso Chile Company” printed on the outermost container of a cocktail kit does not trigger the application of section 134.46 because the U.S. location is used as part of a trade name and an ultimate purchaser would not reasonably construe such a reference to indicate the country of origin of the contents. Accordingly, we find that the name "El Paso Chile Company" constitutes a trade name and the less stringent requirements of 19 CFR 134.37 are applicable. Therefore, the cocktail kit must be marked with its country of origin in a conspicuous location.

The sample packaging submitted for our review displays the adhesive sticker printed with the country of origin of the constituent items located on the bottom of the box. In this location, the sticker is difficult to locate and cannot be easily read. Therefore, to meet the requirement for conspicousness under 19 U.S.C. 1304 and 19 CFR 134.47, the sticker must be placed on one of the sides or the top of the container.

HOLDING:

Based upon the information and sample provided, the phrase “El Paso Chile Company” printed on the outermost container of a cocktail kit does not trigger the application of section 134.46 because the U.S. location is used as part of a trade name and an ultimate purchaser would not reasonably construe such a reference to indicate the country of origin of the contents. Therefore, the less stringent requirements of 19 CFR 134.47 are applicable.

In accordance with T.D. 91-7, only the countries of origin of the major components of a kit/set must be designated in the marking legend. Therefore, with regard to the cocktail set, a label which reads “Packaged in Mexico, Glass Picks: Made in China, Recipe Cards: Made in Mexico” is acceptable to satisfy the requirements of 19 U.S.C. 1304 and 19 CFR Part 134.

The placement of an adhesive sticker with country of origin marking on the bottom of the box of a cocktail kit does not meet the requirement for conspicuousness under 19 U.S.C. 1304 and 19 CFR 134.47.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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,

Myles B. Harmon

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