HQ 563148 - Request for Internal Advice; 19 U.S.C. §1304; 19 CFR Part 134; revocation of NY R00789 - United States International Trade Commision Rulings

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HQ 563148

November 19, 2004

MAR-2-05 RR:CR:SM 563148 EAC

CATEGORY: MARKING

Port Director
Dallas/Fort Worth Airport
U.S. Customs and Border Protection
1205 Royal Lane, P.O. Box 619050
Dallas/Fort Worth Airport, TX 75261

RE: Request for Internal Advice; 19 U.S.C. §1304; 19 CFR Part 134; revocation of NY R00789

Dear Port Director:

This is in response to a request for internal advice dated November 2, 2004, concerning the country of origin marking requirements applicable to hosiery imported in bulk. We note that the request for internal advice has been initiated in response to New York Ruling Letter (“NY”) R00789 dated September 21, 2004, issued to Skyline Hosiery, LLC (hereinafter “Skyline”), regarding such marking requirements. We have reconsidered NY R00789.

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 proposed revocation of NY R00789 is not necessary as it has not been in effect for at least 60 days.

FACTS:

We are advised that Skyline intends to import ladies sheer hosiery in bulk. Upon entry into the United States, the hosiery will not contain sewn-in labels indicating the country of origin of the merchandise. Rather than individually marking the hosiery, Skyline proposes to import the merchandise in sealed poly-bags which, along with the shipping containers, will be properly marked with country of origin information.

At Skyline’s Texas facility, the hosiery will be packaged into rectangular shaped tubes using a patented process. One side of the tubes will contain the statement “Distributed by Skyline Hosiery, Dallas, Texas” in white letters on a dark background. On the same side of the container and at a 90-degree angle is the statement “Made in China”. The hosiery will remain packaged until procured by the ultimate purchaser.

In NY R00789, Customs and Border Protection (“CBP”) determined that the hosiery may be repacked subject to the procedures set forth in 19 CFR 134.34.

ISSUE:

Whether the marking scheme proposed above 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 of the Customs Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304. Section 134.41(b), mandates that the ultimate purchaser in the United States must be able to find the marking easily and read it without strain.

Articles for which the marking of the containers will reasonably indicate the origin of the article are excepted from marking under 19 U.S.C. §1304(a)(3)(D). For an exception to be granted under 19 U.S.C. §1304(a)(3)(D), the article must generally be imported in a marked retail container that will reach the ultimate purchaser. See also, 19 CFR 134.32(d).

Section 134.34, Customs Regulations (19 CFR 134.34), provides that, at the discretion of the port director, an exception from individual marking may be authorized for imported articles which are to be repacked after release from CBP custody when: (1) the containers in which the articles are repacked will indicate the origin of the articles to the ultimate purchaser in the U.S. and (2) the importer arranges for supervision of the marking of the containers by CBP officers at the importer's expense or secures such verification, as may be necessary, by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry.

However, we note that section 134.26, Customs Regulations (19 CFR 134.26), may also be applicable where imported articles will be repackaged in the United States, such as in the present case. Section 134.26(a) provides that if an article subject to country of origin marking is intended to be repacked after its release from CBP custody, or the port director having custody of the article has reason to believe that the 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..." [emphasis added]; or (2) that if he does not repack the article he will give notice to subsequent purchasers or repackers of their obligations under section 19 U.S.C. §1304 and Part 134, Customs Regulations.

The procedures set forth at 19 CFR 134.26 apply only to articles that are legally marked at the time of importation. See, for example, Headquarters Ruling Letter (“HRL”) 561269 dated February 29, 2000. In HRL 561269, certain unmarked firearm parts were imported into the United States in bulk, commingled with other parts, repackaged into sealed plastic containers and sold at retail in properly marked containers as spare parts. In determining what marking requirements were applicable to the imported parts, we noted that the procedures set forth at 19 CFR 134.26 apply only to articles that are legally marked at the time of importation. If the articles are not legally marked at the time of importation, the presentation to CBP of the certification and notice to subsequent purchasers or repackers specified in 19 CFR 134.26 will not serve to satisfy the importer’s obligations under 19 U.S.C. §1304 and 19 CFR Part 134. Therefore, individually unmarked gun parts whose outermost containers were also unmarked were not within the scope of 19 CFR 134.26. Rather, it was stated that the separate procedures of 19 CFR 134.34 were to be utilized in such situations. However, where the outermost container of the gun parts to be repacked in the U.S was correctly marked with the country of origin of the articles contained within, the certification procedures of 19 CFR 134.26 were to be utilized, provided that the containers in which the repackaged spare parts reached the retail purchasers were marked in accordance with the requirements of 19 U.S.C. §1304 and 19 CFR Part 134.

Applying the forgoing to the instant case, in situations where the outermost container of the hosiery to be repacked in the United States is correctly marked with country of origin information at the time of importation, the certification procedures of 19 CFR 134.26 may be utilized, provided the retail containers in which the repackaged merchandise reaches the ultimate purchaser are marked in accordance with the above-referenced requirements of 19 U.S.C. §1304 and 19 CFR Part 134.

Concerning the non-origin reference “Distributed by Skyline Hosiery, Dallas, Texas” which will be placed upon the retail containers, please be advised that 19 CFR 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 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).

HOLDING:

Based upon the information provided, it is our opinion that the imported hosiery may be excepted from individual marking pursuant to 19 CFR 134.32(d), provided the merchandise’s outer containers are properly marked with country of origin information, CBP officials at the port of entry are satisfied that the merchandise will reach the ultimate purchaser in properly marked containers, and the certification requirements of 19 CFR 134.26 are executed. NY R00789 is hereby revoked.

You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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