HQ 562867 - Country of origin marking requirements for repackaged automotive parts; sealed and unsealed containers; 19 CFR 134.46; 19 CFR 134.26 - United States International Trade Commision Rulings

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HQ 562867

May 20, 2004

MAR-2-05 RR:CR:SM 562867 EAC

CATEGORY: MARKING

Corporate Packaging Manager
Balkamp, Inc.
2601 South Holt Road
Indianapolis, IN 46241

RE: Country of origin marking requirements for repackaged automotive parts; sealed and unsealed containers; 19 CFR 134.46; 19 CFR 134.26

Dear Sir or Madam:

Pursuant to Mr. Eric Inman’s request for a ruling on behalf of Balkamp Inc., pertaining to the country of origin marking requirements for imported automotive parts that are repackaged within the United States, U.S. Customs and Border Protection (“CBP”) issued Headquarters Ruling Letter (“HRL”) 734491 dated April 13, 1992, to your company. Upon further consideration of that ruling, we have determined that marking a sealed retail container with the statement “Contents Imported/See Article for Country of Origin” is not permitted under the circumstances presented in that case unless the sealed container is transparent so as to permit the ultimate purchaser to view the marking on the article. Therefore, HRL 734491 is hereby modified for the reasons set forth below.

FACTS:

Balkamp is a distributor and repackager of automotive replacement parts, including some which are imported. We have been advised that the imported parts enter the United States in bulk for repackaging in cartons. The parts are marked as to their origin either on the parts themselves or on their inner packaging. We assume for purposes of this ruling that these two types of marking satisfy the requirements of permanence, legibility, and conspicuousness. We also assume that the inner packaging consists of a plastic bag or the like which is not suitable by itself as packaging for retail sales. Balkamp's U.S. address is printed on the outside of the cartons which will be used to package the parts for retail sale.

In consideration of the foregoing, we held in HRL 734491 that marking sealed or unsealed cartons in which the automotive parts were repackaged with the statement “Contents Imported/See Article for Country of Origin” would be sufficient to advise the ultimate purchaser of the origin of the automotive part.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of HRL 734491, as described below, was published in the Customs Bulletin on March 31, 2004. No comments were received in response to the notice.

ISSUE:

Whether marking sealed or unsealed retail containers with Balkamp’s U.S. address as well as with the statement “Contents Imported/See Article for Country of Origin” satisfies the applicable marking requirements.

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930 (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin imported into the United States 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 United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. §1304 was that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. “The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlander & Co., 27 C.C.P.A. 297 at 302 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. §1304. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines “country of origin” as the country of manufacture, production or growth of any article of foreign origin entering the United States.

The provisions of section 134.26, Customs Regulations (19 CFR 134.26), are applicable to imported articles that are repackaged within the United States. Specifically, section 134.26(a), Customs Regulations (19 CFR 134.26(a)), provides, in pertinent part, that:

If an imported article subject to these requirements is intended to
be repackaged in retail containers ... after its release from Customs custody, or if the district director having custody of the article, has reason to believe that such article will be repacked after its release, the importer shall certify to the port director that: (1) If the importer does the repacking, he shall not obscure or conceal the country of origin marking appearing on the article, or else the new container shall be marked to indicate the country of origin of the article in accordance with the requirements of this part; or (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.

As applied, section 134.26(a)(1) must be considered in this case because, as stated above, Balkamp repackages imported replacement automotive parts within the United States. As such, Balkamp is required to certify upon importation that, after repackaging operations are completed, either the country of origin markings on the individual automotive parts will not be obscured or that the new containers that will reach the ultimate purchaser (in this case, the consumer at retail) will be properly marked with the part’s country of origin. In order to determine whether such containers are properly marked, however, we must consider whether the reference placed upon the containers that directs the ultimate purchaser to inspect the article for country of origin is permissible under the marking regulations when such containers also display Balkamp’s U.S. address.

Under section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin 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. Potentially of concern in the instant case, however, are the requirements of a related provision of the marking regulations, section 134.46, Customs Regulations (19 CFR 134.46).

Section 134.46 requires that, in instances where the name of any city or locality in the United States, 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, and those words or name may mislead or deceive the ultimate purchaser as to the actual country of origin of the article, 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. CBP 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 requirements of section 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). As applied, the requirements of section 134.46 are triggered in this case because Balkamp’s U.S. address will be placed upon the containers sold at retail and this address could potentially deceive or mislead the ultimate purchaser of the automotive parts as to the actual country of origin of the items.

In regards to this issue, CBP has previously held that, under certain circumstances, a statement placed upon a product’s packaging that directs the ultimate purchaser to inspect the actual article for country of origin information may satisfy the applicable marking regulations even if the packaging also contains the U.S address of a domestic company. For example, in HRL 735332 dated August 18, 1994, automotive parts and accessories were imported in bulk and repackaged within the United States. The imported parts were repackaged into either six-sided opaque cardboard cartons or into transparent “blister pack” packages. The importer proposed to mark “Contents Imported. See Article for Country of Origin” on the outer surface of the opaque cartons or, in the case of the blister packs, on cardboard placards that were inserted into the blister packs. These markings were to be placed on the same panel, and in comparable print size, as the distributor’s U.S. address on both the opaque cartons and the cardboard placards. It was further noted that the individual parts contained within the cartons and blister packs would be individually marked with their country of origin and that the opaque cartons would be unsealed when sold at retail whereas the blister packs would be sealed.

At issue in HRL 735332 was whether the marking schemes proposed for the opaque cartons and cardboard placards were acceptable under the marking regulations. Upon considering the facts involved, we held that printing the proposed marking on the unsealed opaque cardboard cartons directly below the U.S. reference satisfied the applicable marking regulations, whereas an identical marking printed upon cardboard placards that were placed within the sealed blister packs failed to satisfy the requirements of the same provision.

The determinative consideration in HRL 735332 was the ability of the ultimate purchaser in each situation to determine the country of origin of the actual article contained within either the opaque carton or blister pack. In this respect, the unsealed opaque boxes clearly afforded the ultimate purchaser the opportunity to obtain origin information by casually examining the article at retail. The sealed blister packs, on the other hand, precluded the ultimate purchaser from engaging in such a casual inspection of the individual article at retail. Therefore, considering that the country of origin markings on the actual parts were also obscured by the blister packaging, it was evident that sealing blister packaging and directing the ultimate purchaser to inspect the actual article for country of origin information failed to satisfy the marking requirements set forth above.

CBP has considered a number of cases (cited, infra) where an article’s proposed packaging contained the U.S. address of a domestic company and simultaneously advised the ultimate purchaser to inspect the actual article of commerce for country of origin information. In such cases, we have consistently held that, to be compliant with the marking regulations, the country of origin markings located on the actual article of commerce must be discoverable upon a “casual examination of the article.” It has been noted that, in order for a sealed container to satisfy the foregoing requirements, the container must be transparent. See, for example, HRL 560776 dated May 4, 1999 (sealed packages containing imported electronic accessories that were marked with actual country of origin could contain a statement that directed the ultimate purchaser to inspect the actual articles for country of origin provided that the articles were packaged in clear plastic that allowed the ultimate purchaser to easily view such markings prior to purchase). It follows that, where transparent packaging is not used in such cases, a sealed container presumably denies the ultimate purchaser the opportunity to easily obtain country of origin information because undertaking a casual examination of the article would necessitate breaking the seal on the package. As such, CBP believes that directing the ultimate purchaser to inspect the actual article of commerce for country of origin information under such circumstances is not permissible under the marking regulations.

On the other hand, unsealed containers that include a reference to a U.S. address may be marked with a statement directing the ultimate purchaser to inspect the actual article for country of origin information, provided that the latter marking is in close proximity, on the same side, and in comparable print size as the U.S. address and that the country of origin marking on the article may be viewed by the ultimate purchaser upon a casual inspection of the item. See, for example, HRL 562832 dated October 10, 2003; HRL 559753 dated August 8, 1996; and HRL 559245 dated December 13, 1995.

HOLDING:

Marking a sealed container with the statement “Contents Imported/See Article for Country of Origin” is not permitted under the circumstances presented above unless the sealed container is transparent so as to permit the ultimate purchaser to view the marking on the article contained within.

EFFECT ON OTHER RULINGS:

HRL 734491 dated April 13, 1992, is hereby MODIFIED. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.

Sincerely,

Myles B. Harmon, Director

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