CLA-2 CO:R:C:V 555183 GRV
Leonard L. Rosenberg, Esq.
Sandler, Travis & Rosenberg, P.A.
Rivergate Plaza
444 Brickell Avenue
Miama, Florida 33131-2470
RE: Applicability of duty exemption under HTSUS subheading
9801.00.10 to dental floss products packaged in the
Dominican Republic.Upjohn Co. (1985);John V. Carr & Son,
Inc. (1972);731420;071449;packaging;marking;Federal Trade
Commission
Dear Mr. Rosenberg:
This is in response to your letter of November 18, 1988, on
behalf of Johnson & Johnson Dental Care Company, Inc., requesting
a ruling on the applicability of subheading 9801.00.10, Harmo-
nized Tariff Schedule of the United States (HTSUS) (formerly item
800.00, Tariff Schedules of the United States (TSUS)), to four
dental floss products to be packaged in the Dominican Republic.
You also inquire as to the country of origin marking requirements
applicable to such packaged products. Samples of each product to
be imported were submitted.
FACTS:
You state that dental floss and packaging materials of U.S.
origin will be sent to the Dominican Republic for packaging oper-
ations. Prior to export, the dental floss is fully prepared and
variously wound on plastic cores to prescribed yardages. The
packaging materials vary according to the markets targeted, which
are described as (1) professional refills; (2) professional sam-
ples; (3) domestic volume; and (4) international bulk.
In the case of professional refills, the packaging materials
consist of patty paper, which is manually wrapped around the
floss, and cardboard boxes, into which the floss refill is
inserted. In the case of the other three floss products, the
packaging materials are plastic dispensers of various sizes,
which consist of the outside dispenser shell, a plastic insert
holder and a metal cutter attached to the insert holder. The
floss-wound core is inserted into the outside dispenser shell
and the end of the floss is projected through the insert guide
hole in the plastic insert holder, opposite the metal cutter
which is attached. The company name and a general description of
the floss type, flavor and length are then machine-printed on the
plastic dispensers.
Following the initial packaging operations, the various
dental floss products are bulk-packaged in cardboard boxes.
Professional refill products are placed in outer cardboard boxes
which show the company name, U.S. business address and product
information. The professional samples are placed in plastic
bags, which in turn are put into cartons. The international bulk
products are also packed in cartons. Both the professional
samples and international bulk cartons are unmarked except for
product code number, as they will ultimately be reshipped to
another country and repackaged in blister packs. Further, all
three of these products will be shipped to a company distribution
center. The fourth product--designated domestic volume--is
placed in cartons and shipped to Puerto Rico where they are
placed in blister packs printed with the company name and U.S.
address.
You also inquire as to whether the floss dispensers may be
marked "Made in USA" and whether these products are exempt from
country of origin marking requirements.
ISSUE:
Whether the U.S. products to be exported (dental floss and
packaging materials) will qualify for the duty exemption avail-
able under HTSUS subheading 9801.00.10 (TSUS item 800.00) when
returned to the U.S.
LAW AND ANALYSIS:
Effective January 1, 1989, the HTSUS superseded and replaced
the TSUS. TSUS item 800.00 was carried over into the HTSUS with-
out change as subheading 9801.00.10. HTSUS subheading 9801.00.10
provides for the free entry of U.S. products that are exported
and returned without having been advanced in value or improved in
condition by any means while abroad.
In Upjohn Co. v. United States, CIT 600, 623 F.Supp. 1281
(1985), the U.S. Court of International Trade stated that
whether merchandise is classifiable under TSUS item 800.00
depends upon whether the imported product is a product of the
U.S., and if so, whether the product was advanced in value or
improved in condition while abroad.
In this case, the samples submitted evidence the fact that
while abroad, the U.S. dental floss products are not advanced in
value or improved in condition by any means. Prior to export to
the Dominican Republic, the dental floss articles are fully pre-
pared products, which are variously wound on plastic cores. In
the Dominican Republic, the products are merely wrapped in patty
paper and inserted into a cardboard box or inserted into a
plastic dispenser, with the end of the floss projected through an
insert guide post. Accordingly, as no aspect of the foreign
packaging operation effects an alteration or change in the dental
floss products themselves (see, United States v. John V. Carr &
Son, Inc., C.D. 4377, 69 Cust.Ct. 78, 347 F.Supp. 1390, 1400
(1972), aff'd, C.A.D. 1118, 61 CCPA 52, 496 F.2d 1225 (1974),
the dental floss products will be eligible for the duty exemption
under HTSUS subheading 9801.00.10.
Moreover, the cardboard boxes and various plastic dispensers
in this case are entitled to duty-free return, as they have not
been advanced in value or improved in condition, as provided
under HTSUS subheading 9801.00.10. Also, we have stated that we
find no evidence that in enacting the HTSUS, Congress intended to
alter the duty-free treatment previously accorded to American-
made containers under the TSUS. See, Headquarters Ruling Letter
(HRL) 731420 (November 18, 1988). Further, the printing of the
company name and a description of the floss type, flavor and
length on the dispensers will not preclude them from receiving
duty-free treatment under this tariff provision. See, HRL 071449
(October 17, 1983). Accordingly, the packaging materials
involved in this case will be allowed duty-free treatment when
returned with their contents.
With regard to your request that Customs rule it permissible
to mark the packaged dental floss products, "Made in the U.S.A.,"
while products of the U.S. that are exported and returned are
excepted from country of origin marking requirements pursuant to
19 CFR 134.32(m), a determination as to whether the packaged
dental floss products may be marked "Made in the U.S.A." is
within the province of the Federal Trade Commission. We
recommend that you contact that agency at 6th and Pennsylvania
Avenues, N.W., Washington, D.C. 20508, before you undertake to
mark your packaged products.
HOLDING:
On the basis of the information and sample materials sub-
mitted, as the U.S. dental floss and packaging materials will not
be advanced in value or improved in condition abroad as a result
of the packaging operation, the dental floss and their various
containers will qualify for the duty exemption under HTSUS sub-
heading 9801.00.10.
Sincerely,
John Durant, Director
Commercial Rulings Division