MAR-2-05 RR:TC:SM 560024 MLR
Mr. Ronald E. Edelstein
Texas Instruments
P.O. Box 655303
Mailstop 8205
Dallas, Texas 75265
RE: Reconsideration of NYRL 817080; country of origin
marking for semiconductors; container; repackaging;
size; 19 CFR 134.26
Dear Mr. Edelstein:
This is in reference to your letter of February 6,
1996, requesting clarification of New York Ruling Letter
(NYRL) 817080 dated December 27, 1995, concerning the
country of origin marking requirements for semiconductor
devices and their containers. Pursuant to section 625,
Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), 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) (hereinafter
"section 625"), notice of the proposed modification of NYRL
817080 was published November 13, 1996, in the Customs
Bulletin, Volume 30, Number 45/46.
FACTS:
NYRL 817080 is herein incorporated by reference.
However, the pertinent facts are as follows: Texas
Instruments states that it imports semiconductor devices
(hereinafter "devices") packaged in plastic sleeves which
hold each semiconductor chip in place, which in turn are
packaged in a cardboard carton marked with the devices'
country of origin. Either Texas Instruments will use the
devices in the further manufacture of its own products, the
devices will be sold to other manufacturers who use them in
further manufacturing, or the devices will be sold to
unrelated distributors who may resell them in the original
import containers or in smaller quantities. In the third
scenario, Texas Instruments states that it will ensure that
the immediate container is properly marked before shipment
to the distributors, and that it will notify the
distributors of their obligation to further notify their
customers of the origin of the devices if they repackage
them before resale.
In NYRL 817080, it was determined that the articles
repackaged after release from Customs custody may be
excepted from individual marking under 19 CFR 134.32(d)
subject to the port director's discretion, as provided in
19 CFR 134.34. You state that it will not be feasible to
rely on the port director's discretion each time the
devices are entered.
Additionally, Texas Instruments seeks a determination
as to when devices are incapable of being marked, so that
only the container in which the devices are packaged must
be marked in order to satisfy the marking requirements.
Texas Instrument submits that a device which is smaller
than 12 millimeters (mm) in its longest dimension is
incapable of being marked as any marking would be too small
to be legible.
ISSUES:
I. Whether the procedures of 19 CFR 134.26 may be used for
the semiconductor devices imported in properly marked
containers which will subsequently be sold to unrelated
distributors who may resell them in their original
import containers or in smaller quantities.
II. Whether a device smaller than 12 mm in its longest
dimension is incapable of being marked, and whether
labeling the outside container in which the devices are
imported will satisfy the marking requirements of 19
U.S.C. 1304.
LAW AND ANALYSIS:
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. 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. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104
(1940).
Part 134, Customs Regulations (19 CFR Part 134)
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304. Section 134.32(d), Customs
Regulations {19 CFR 134.32(d)}, excepts an article from
marking if its container will reasonably indicate the
origin of the article.
I. Repackaging
In T.D. 75-187, Customs stated that semiconductor
devices are excepted from individual marking if their
containers are properly marked and Customs officials at the
port of entry are satisfied that the devices will reach the
ultimate purchaser in the marked containers. In T.D. 75-187, it was stated that the ultimate purchaser of the
devices, within the meaning of 19 U.S.C. 1304(a), may be a
manufacturer who uses the devices in the manufacture of new
and different articles such as television sets, radios, or
other electronic equipment, or a hobbyist, experimenter, or
repairman who purchases the devices in their original
imported condition for use in his hobby or profession.
Accordingly, in the first and second scenarios where Texas
Instruments or another manufacturer uses the devices to
produce other products, if the devices reach Texas
Instruments or the other manufacturer in a properly marked
container, the requirements of 19 U.S.C. 1304 will be
satisfied.
In T.D. 75-187, it was also stated that semiconductor
devices may be excepted from individual marking in
appropriate cases under the provisions of 19 CFR 134.34, if
the devices are imported in bulk, and repackaged in
containers in the U.S. that are marked to indicate the
country of origin to an ultimate purchaser. It was noted
that permitting the country of origin marking to appear on
the containers in which the devices were repackaged in the
U.S., was conditioned on a requirement that the correct
country of origin of each of the devices was to appear on
the package. Accordingly, we note that T.D. 75-187 appears
to have addressed containers of devices imported in bulk
which were not marked or not marked with the exact country
of origin of the devices, so that the procedures of 19 CFR
134.34 had to be followed. When neither the imported
article nor its container is properly marked, and the
container in which an article is to be repackaged after
release from Customs custody will be marked with the
article's proper country of origin, the provisions of 19
CFR 134.34 should be used.
While it is not necessarily erroneous to use the
procedures of 19 CFR 134.34 for the repacking of the
semiconductor devices, the procedures of 19 CFR 134.26 may
be applied to articles properly marked at the time of
importation that will be repackaged in retail containers
after their release from Customs custody. In Headquarters
Ruling Letter (HRL) 559244 dated March 12, 1996, Customs
stated that it is clear that 19 CFR 134.26 "covers
situations where the containers and not the articles are
marked (as an exception to the marking requirements) and
the articles will be repacked." This is contrasted with
C.S.D. 92-25 (November 20, 1991), where Customs stated that
the certification procedures of 19 CFR 134.26 for the
marking of repackaged articles may not be used by an
importer to satisfy his obligations if the goods are not
correctly marked or excepted from marking at the time of
importation, but rather that the procedures of 19 CFR
134.34 shall be used.
Accordingly, the certification requirements provided at
19 CFR 134.26 will apply to those articles marked with
their country of origin, or to those articles which are
imported in properly marked containers. See HRL 559671
dated June 7, 1996. While Texas Instruments has indicated
that the imported devices are not individually marked, but
rather are imported in properly marked containers
(cardboard cartons), the requirements of 19 CFR 134.26 may
be used. See also HRL 559252 dated October 5, 1995.
Section 134.26, Customs Regulations (19 CFR 134.26),
provides in pertinent part that:
If an imported article subject to these requirements is
intended to be repacked in retail containers ... after
its release from Customs custody, or if the port
director having custody of the article, has reason to
believe 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. The importer, or
his authorized agent, shall sign the following
statement.
Therefore, this procedure may be used if the container
in which the devices are packed is properly marked with the
device's country of origin, and if Texas Instruments
notifies the U.S. distributor that the devices intended for
resale must be properly marked after any subsequent
repackaging. Please note that 19 CFR 134.26(a) also
provides that the certification statement may be submitted
in blanket form to cover all importations of a particular
product for a given period.
II. Incapable of Being Marked
Additionally, Texas Instruments seeks a determination
regarding when devices may be considered incapable of being
marked so that the marking requirements may be satisfied by
marking the devices' container. First, please note that
the marking requirements may be satisfied by marking the
outside container in which the devices are packaged,
whether or not they are themselves capable of being marked,
so long as the container indicates to the ultimate
purchaser the country of origin of the devices.
However, in regard to the specific example whether a
device smaller than 12 mm in its longest dimension is
incapable of being marked as any marking would be too small
to be legible, we note that no single factor is considered
conclusive in determining whether a marking meets the
conspicuous requirement of 19 CFR 134.41 and 19 U.S.C.
1304. Customs has stated that the concept of
conspicuousness embraces two concerns: (1) visibility,
which addresses the requirement that the marking must be
able to be found easily, and (2) legibility, which
addresses the requirement that the marking must be able to
be read without strain.
In HRL 734191 dated August 8, 1991, semiconductors
measuring approximately 1 3/8 inches in length and « inches
in width, were marked on the bottom corner of the ejector
pin area with the word "Philippines" in lettering
approximately 2 points (a point is a unit of type
measurement equal to 0.01384 inch or nearly 1/72 inch, and
all type sizes are multiples of this unit), and in the same
color as the article. It was determined that the marking
was neither easy to find nor easy to read. It was also
noted that the semiconductor could easily accommodate a
larger conspicuous and legible country of origin marking.
In HRL 733965 dated June 3, 1991, Customs ruled that a
small paper label affixed to a plastic watch container
marked with the country of origin in lettering
approximately 3 points was not conspicuous since the small
print was not easy to read.
In HRL 734639 dated August 13, 1992, it was stated that
it is a combination of factors which determines whether the
marking is acceptable. In some cases, a marking may be
unacceptable even when it is in a large size because the
letters are too hard to read or it is in a location where
it would not be easily noticed. In other cases, even if
the marking is small, the use of contrasting colors, which
make the letters particularly stand out, could compensate
to make the marking acceptable. Therefore, while we cannot
issue you a definite ruling for each instance when a device
is incapable of being marked, it is our opinion that for a
device of no more than 12 mm in its longest dimension, a
marking smaller than 5 points in non-contrasting lettering
would be illegible. See HRL 735371 dated October 19, 1993,
(marking on components of an "Oodles" toy craft kit had to
appear in a conspicuous location in lettering of at least
five points); and HRL 734639 dated August 13, 1992, (the
suggested marking on a small plastic container known as a
"SUBMARIN" was at least five point type).
HOLDING:
Based on the facts presented, the devices may be
excepted from marking pursuant to 19 U.S.C. 1304(a)(3)(D)
and 19 CFR 134.32(d) and only the outer container in which
the devices are packed must be marked with the country of
origin of the devices. Furthermore, the devices may be
repackaged after their release from Customs custody if the
requirements of 19 CFR 134.26 are satisfied. The
requirements of 19 CFR 134.26 will be satisfied if the
devices are imported in properly marked containers, and
Texas Instruments informs the U.S. distributor that if the
devices are repackaged, they must be repackaged in properly
marked containers. Additionally, marking a device
measuring no more than 12 mm in its longest dimension with
less than five point type size in non-contrasting lettering
will be illegible.
NYRL 817080 is hereby modified. In accordance with
section 625, this ruling will become effective 60 days
after its publication in the Customs Bulletin. Publication
of rulings or decisions pursuant to section 625 does not
constitute a change in practice of position in accordance
with section 177.10(c)(1), Customs Regulations (19 CFR
177.10(c)(1)).
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division