MAR-2-05 RR:TC:SM 559268 KR
Ed Baker
A.N. Deringer, Inc.
30 West Service Road
Champlain, NY 12919
RE: Modification of prior ruling HQ 732372, concerning the
country of origin marking of imported sunflower growing
kit; Article 509, NAFTA, 19 CFR Part 102.
Dear Director:
This is a modification of a prior ruling, HQ 732372 (March
16, 1995), involving a country of origin ruling regarding the
country of origin marking of a sunflower growing kit.
FACTS:
Seracon Products intends to import a sunflower growing kit
into the U.S. The pieces are separate and are packaged into a
cardboard canister. The canister contains sunflower seeds, a
terra cotta pot and saucer, and a bag of soilless organic growing
mix. The canister and growing mix are products of Canada. The
sunflower seeds are products of Japan. The terra cotta pot and
saucer are products of Germany. The top of the canister has an
adhesive label on which there is printed:
PACKAGED IN CANADA
REUSABLE CANISTER AND GROWING MIX
PRODUCTS OF CANADA
SUNFLOWER SEEDS - PRODUCT OF JAPAN
TERRA COTTA POT AND SAUCER
PRODUCT OF GERMANY
The canister has a label encircling it on which there is printed:
MADE BY / FRABRIQUE PAR
SERACON PRODUCTS
MONTREAL, CANADA
However, in a telephone conversation on July 27, 1994, the
importer stated that they were going to remove the "MONTREAL,
CANADA" from the canister label, and only the top adhesive label
would have any geographical reference.
ISSUE:
Whether the adhesive label is an adequate country of origin
marking for the sunflower growing kit.
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that unless excepted, every article of foreign
origin 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. 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; C.A.D. 104 (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) of the regulations, defines "country of
origin" as:
the country of manufacture, production, or growth
of any article of foreign origin entering the U.S.
Further work or material added to an article in
another country must effect a substantial
transformation in order to render such other
country the "country of origin" within this part;
however, for a good of a NAFTA country, the NAFTA
marking rules will determine the country of
origin. (Emphasis added).
Section 134.1(j), of the regulations, provides that the
"NAFTA marking rules" are the rules promulgated for purposes of
determining whether a good is a good of a NAFTA country. 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 U.S. as determined under the NAFTA marking rules.
Section 134.1(d), provides that:
The ``ultimate purchaser'' is generally the last
person in the United States who will receive the
article in the form in which it was imported;
however, for a good of a NAFTA country, the
``ultimate purchaser'' is the last person in the
United States who purchases the good in the form
in which it was imported.
Part 102 of the regulations sets forth the "NAFTA Marking
Rules" for purposes of determining whether a good is a good of a
NAFTA country for marking purposes. Section 102.11 of the
regulations, sets forth the required hierarchy for determining
country of origin for marking purposes. Section 102.11(a) of the
regulations states that "[t]he 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 requirements of these rules are satisfied."
Since the sunflower growing kit is neither wholly obtained
or produced in a single country nor produced exclusively from
domestic materials, 102.11(a)(1) and (2) are not applicable for
purposes of determining whether the sunflower growing kit is a
good of Canada. Therefore, it must be determined whether
pursuant to 102.11(a)(3), the foreign materials incorporated
into the sunflower growing kit meet the specific tariff rule of
102.20. "Foreign Material" is defined in section 102.1(e) as "a
material whose country of origin as determined under these rules
is not the same country as the country in which the good is
produced." Thus, we must look at those materials whose country
of origin is other than Canada. The sunflower growing kit has
four components; the growing mix, the sunflower seeds, the terra
cotta pot and saucer. The growing mix is a product of Canada;
the sunflower seeds are products of Japan; the terra cotta pot
and saucer are from Germany.
To ascertain the applicable rule in 19 CFR 102.20, we must
first determine the classification of the set. When imported
separately, the sunflower seeds are classified under heading
1206, HTSUS, the terra cotta pot and saucer are classified under
heading 6914, HTSUS, and the growing mix is classified under
heading 3501, HTSUS. The items in this set are prima facie
classifiable in two or more headings. Therefore, classification
under GRI I fails, and we must apply the other GRIs.
GRI 3(a) states that if a product is classifiable in two or
more headings by application of GRI 2(b), or for any other
reason, then the
heading which provides the most specific
description shall be preferred to headings
providing a more general description. However,
when two or more headings each refer to ... part
only of the items in a set put up for retail sale,
those headings are to be regarded as equally
specific in relation to those goods, even if one
of them gives a more complete or precise
description of the goods.
GRI 3(b) provides that "goods put up in sets for retail
sale, which cannot be classified by reference to 3(a), shall be
classified as if they consisted of the material or component
which gives them their essential character."
The Harmonized Commodity Description and Coding System
Explanatory Notes (EN) constitute the Customs Cooperation
Council's official interpretation of the HTSUS. While not
legally binding, the ENs provide a commentary on the scope of
each heading of the HTSUS and are generally indicative of the
proper interpretation of these headings. To determine what is a
"set put up for retail sale", EN X to GRI 3(b), page 4, states
that:
[flor the purposes of this Rule, the term "goods put up
in sets for retail sale" shall be taken to mean goods
which:
(a) consist of at least two different articles which
are, prima facie, classifiable in different
headings;
(b) consist of products or articles put up together to
meet a particular need or carry out a specific
activity; and
(c) are put up in a manner suitable for sale directly
to users without repacking (e.g., in boxes or
cases or on boards).
The subject merchandise is a set, because: the items in it are
provided for in headings 1206 and 6914, HTSUS; all of the
products put together carry out the specific activity of
cultivating the growth of sunflower plants; and it is packaged in
one container to be sold directly to the user.
Because the item is a set, we must determine which component
provides the essential character. EN VIII to GRI 3(b), page 4,
states that:
[t]he factor which determines essential character will
vary as between different kinds of goods. It may, for
example, be determined by the nature of the material or
component, its bulk, quantity, weight or value, or by
the role of a constituent material in relation to the
use of the goods.
In HQ 953946 (August 30, 1993), we found that the essential
character of a sunflower growing kit matching the one at issue
here was the sunflower seeds. HQ 953946 held that "[w]e believe
that the ... seeds form the essential character of the kits
because without them the kits would serve no purpose." Therefore
the classification of the set in the instant case will be the
classification of the sunflower seeds, subheading 1206.00.0040,
HTSUS.
Thus, in this case, the specific tariff rule applicable to
the kit is set forth in 102.20(m), Section II: Chapters 6
through 14, which states: "A change to heading 1201 through
1207 from any other chapter." In this case, the sunflower seeds
do not undergo the necessary change in tariff classification.
Therefore, the origin of the kit cannot be determined pursuant to
section 102.11(a)(3). Moreover, section 102.11(b) is not
applicable since the good (kit) is classified as a set.
However, section 102.11(c) provides, inter alia, that for a good
which is classified as a set under the HTSUS, the country of
origin of such a good is the country or countries of origin of
all materials that merit equal consideration for determining the
essential character of the good. Since we find that each of the
components of the kit (i.e. the seeds, pot and saucer, and
growing mix) merits equal consideration for determining the
essential character of the kit, the country of origin of the kit
is the country of origin of each of these components. Inasmuch
as the adhesive label lists the individual country of origin of
each component, it is an acceptable country of origin marking
under section 1304.
However, it should be noted that the canister qualifies as a
"usual container" pursuant to 19 CFR134.22(d)(1), and as a usual
container from a NAFTA country, the canister itself is excepted
from country of origin marking under 19 CFR 134.22(d)(2).
Therefore, the words appearing on the adhesive label indicating
the country of origin of the canister, although acceptable, are
not required.
The first line of the adhesive label states that the
sunflower growing kit is "PACKAGED IN CANADA". The marking of
where the packaging occurs is not required, and could be removed.
However, since it appears on the sample provided, it must satisfy
the country of origin marking regulations. Section 134.46,
Customs Regulations (19 CFR 134.46), requires that when 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. HQ 708994 (April 24, 1978). The purpose of 19
CFR 134.46 is to prevent the possibility of misleading or
deceiving the ultimate purchaser as to the origin of the imported
article. In this situation, the "PACKAGED IN CANADA" appears in
larger print than the other country of origin designations. We
find this to be a violation of 19 CFR 134.46. Since "PACKAGED
IN CANADA" is not required to appear on the product, it must
either be removed, or the print size must be reduced so as to
more closely match the print size of the country of origin
designations of the contents.
HOLDING:
The adhesive label listing the individual countries of
origin of the components of the sunflower growing kit is an
acceptable method of country of origin marking. However, the
marking on the front label "MONTREAL, CANADA" must be removed,
and the words "PACKAGED IN CANADA" printed on the adhesive label
must be either removed or reduced in size so that these words are
more closely matched to the print size of the country of origin
designations appearing on the canister for the contents.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division