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NY K87195




July 1, 2004

MAR-2 RR:NC:1:110 K87195

CATEGORY: MARKING

Ms. Fusae Nara
Pillsbury Winthrop LLP
1540 Broadway
New York, NY 10036-4039

RE: THE COUNTRY OF ORIGIN MARKING OF REMANUFACTURED TONER CARTRIDGES; ARTICLE 509

Dear Mr. Nara:

This is in response to your letter dated June 14, 2004, requesting a ruling on whether the proposed marking "Made in Mexico" is an acceptable country of origin marking for the importation of remanufactured Toner Cartridges. A marked sample was submitted with your letter for review and will be returned to you.

The merchandise under consideration is remanufactured Toner Cartridges for Sharp digital multifunction machines (“DMMs”). New Toner Cartridges are imported together with DMMs made in China; additional Toner Cartridges manufactured in the Philippines are imported separately. Each cartridge is individually packaged to prevent spillage during shipment. In both cases the new Toner Cartridge is shipped in a container that is properly marked with the applicable country of origin on the outer container. As per information supplied by you on June 29, 2004, the principal use of these cartridges is with the machines of heading 8471.

Sharp has made arrangements for depleted toner cartridges to be mailed for recycling under their Toner Recycling Program. When the cartridges are depleted of toner, they are mailed to Bestec Electronics Corporation (“Bestec”) in the United States for export to STC International S.A. de C.V. (“STC”) a Mexican company that arranges for the remanufacturing process in Mexico by its subsidiary. When Bestec receives the cartridges under the recycling program, they are not in their original shipping container. Therefore, they have no country of origin marking and no practical way for Bestec or STC in Mexico to determine the country of origin.

When the depleted cartridges arrive at the facility in Mexico, they are inspected for salvage. Acceptable cartridges and then disassembled. The disassembly process consists of: 1) removal of the spent toner box and cleaning, 2) removal of the developer front cover, 3) separation of the toner box and developer box, 4) toner and developer caps are removed, 5) the interiors of both are cleaned, 6) the front and rear side sheets, which are designed to prevent toner from scattering, are striped off of the cartridge, 7) the doctor blade, which ensures the quantity of the developer powder is distributed uniformly over the magnetic roller is removed and cleaned, 8) the serial number label is stripped off the cartridge.

The assembly process requires a remanufacturing kit which contains new parts and new toner and developer. This kit includes a sidesheet, developer blade, corner sheet, polyurethane foam, protective sheet, magnetic roller cover, aluminum foil bag and printed materials from China. Also included in this kit is a plastic bag, cartridge sleeve, tape and individual shipping containers of Mexican origin and developer and toner from Japan.

The assembly process consists of: 1) affix front and rear side sheets, 2) install the doctor blade to the cartridge, 3) spacing between the doctor blade and magnetic roller is checked and main end positions are set, 4) developer box and first toner box for fresh toner are installed and set, 5) developer is replenished and developer cap installed, 6) the first toner box is replenished with a new supply of toner and toner cap installed, 7) developer blade is affixed to the cartridge and a copying test is conducted, 8) the cartridge is marked to indicate the number of times it has been remanufactured, 9) the developer front cover is set, 10) the second toner box for spent toner is installed, 11) serial number label is affixed, 12) corner sheets are affixed to the magnetic roller cover and the polyurethane foam is installed in the magnetic roller cover, 13) the protective sheet is affixed to the magnetic roller cover and the magnetic roller cover is installed, 14) the replenished Toner Cartridge is inserted into a plastic bag and closed with tape, 15) the Toner Cartridge is then inserted into the developer sleeve, 16) the position of the Toner Cartridge in the developer sleeve is set with tape and then is inserted into the aluminum foil bag, 17) the aluminum foil bag is then heat sealed, 18) the Toner Cartridge is inserted into additional packing material and packaged with a warranty card, recycling instructions, mailing labels and other materials into an individual container which is sealed, 19) the individual container is placed into a cardboard shipping container sealed with tape.

As described above, following the disassembly and assembly process, the remanufactured Toner Cartridge is enclosed in a plastic bag, inserted into a sleeve and then is inserted into an opaque aluminum foil bag which is heat sealed. The opaque foil bag containing the Toner Cartridge is packaged with other printed materials into an individual container which is placed into a sealed larger cardboard container for five (5) individual containers. Both the individual container and the larger cardboard container are marked with the country of origin and specifically states “Made in Mexico.”

In HQ 561412 dated January 31, 2000, Customs applied the NAFTA marking rules in a similar situation. 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 in the U.S. 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.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.

Section 134.45(a)(2) of the regulations, provides that "a good of a NAFTA country may be marked with the name of the country of origin in English, French or Spanish. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules (19 CFR Part 102). Section 102.11, Customs Regulations (19 CFR 102.11) sets forth the required hierarchy for determining whether a good is a good of a NAFTA country for marking purposes. Paragraph (a) of this section states:

(a) The country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.

As the imported good in this case is neither wholly obtained nor produced exclusively from domestic (Mexican) materials, we must first apply 19 CFR 102.11(a)(3). The finished cartridges are classifiable under subheading 8473.30.30, HTSUS. The applicable change in tariff classification for heading 8473 is set out in section 102.20(o), Section XVI, Chapters 84 through 85, which provides: “8473A change to heading 8473 from any other heading, except from heading 8414, 8501, 8504, 8534, 8541, or 8542 when resulting from a simple assembly.” As in HQ 561412, the requisite tariff shift does not occur, because the imported article (i.e., the foreign material) is a cartridge classified in the same heading. Therefore, the next step in the hierarchal scheme is section 102.11(d), which provides as follows:

(d) Where the country of origin of a good cannot be determined under paragraph (a), (b) or (c) of this section, the country of origin of the good shall be determined as follows: (1) If the good was produced only as a result of minor processing, the country of origin of the hood is the country or countries of origin of each material that merits equal consideration for determining the essential character of the good; (2) If the good was produced by simple assembly and the assembled parts that merit equal consideration for determining the essential character of the good are from the same country, the country of origin of the good is the country of origin of those parts; or (3) If the country of origin of the good cannot be determined under paragraph (d)(1) or (d)(2) of this section, the country of origin of the good is the last country in which the good underwent production.

“Minor processing” is defined in section 102.1(m) as including, in part, the mere dilution with water or another substance, cleaning, application of preservative or decorative coatings, trimming, filing, or cutting off of small amounts of excess materials, unloading, reloading, putting up in measured doses, packing, repacking, testing, marking, sorting, or grading, ornamental or finishing operations incidental to textile good production. “Simple assembly” is defined in section 102.1(o) as “the fitting together of five or fewer parts all of which are foreign (excluding fasteners such as screws, bolts, etc.) by bolting, gluing, soldering, sewing or by other means without more than minor processing.” We find that the operation performed in Mexico, as described, constitute more than “minor processing” and exceed a “simple assembly.” Accordingly, 19 CFR 102(d)(1) and 102(d)(2) are inapplicable. We conclude that pursuant to 19 CFR 102.11(d)(3), the country of origin of the good is Mexico, the last country in which the good underwent production prior to entering the U.S. (“Production” is defined under 19 CFR 102.1(n) and includes “manufacturing, processing or assembling a good.”).

As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.

With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.

An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. Accordingly, if Customs is satisfied that the article will remain in its container until it reaches the ultimate purchaser and if the ultimate purchaser can tell the country of origin of the Toner Cartridges by viewing the container in which it is packaged, the individual cartridge would be excepted from marking under this provision.

The Toner Cartridges which are imported in containers that are marked in the manner described above, are excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d). Accordingly, marking the container in which the cartridges are imported and sold to the ultimate purchaser in lieu of marking the article itself is an acceptable country of origin marking for the imported cartridges provided the port director is satisfied that the article will remain in the marked container until it reaches the ultimate purchaser.

The proposed marking of imported remanufactured Toner Cartridges "Made in Mexico" as described above, is conspicuously, legibly and permanently marked in satisfaction of the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134, and is an acceptable country of origin marking.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Eileen S. Kaplan at 646-733-3016.

Sincerely,

Robert B. Swierupski
Director,

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