CLA-2 RR:TC:SM 560299 MLR
Mr. Lee Wais
Cutting Edge Enterprises, Inc.
2417 W. Baltimore Street
Baltimore, MD 21223
RE: Applicability of duty exemption under HTSUS subheadings 9811.00.40 and 9804.00.65 to cigarettes; Mexico; sample; country of origin marking
Dear Mr. Wais:
This is in reference to your letter dated February 5, 1997, concerning the entry of cigarettes from Mexico into the U.S. Photocopies of the cigarette packages were submitted.
FACTS:
You state that you wish to import cigarettes manufactured in Mexico. You state that you will import cigarette cartons which hold 10 packs of 20 cigarettes. Upon importation, you will break the cartons down and ship them out to customers abroad as samples. You state that the cost of each pack is 10 cents and, therefore, each carton is valued at $1.00. You state that these cartons are not for sale and are not for use in the U.S., but in the future you anticipate selling in the U.S.
The submitted photocopy of the front panel of the cigarette pack shows the brand name “Makro” along with the words “American Blend Full Flavor”, and the side panel contains the words “MAKRO UNDER AUTHORITY OF C.E.E.I. BALTIMORE MD. IN USA” and “Product of North American Origin”. The cigarette cartons are similarly marked. You state that the words “Product of North American Origin” will be covered by a sticker which states that the cigarettes are made in Mexico.
ISSUES:
I. Whether the cigarettes are entitled to duty-free treatment under subheading 9811.00.40, HTSUS.
II. What are the country of origin marking requirements of the cigarettes at issue.
LAW AND ANALYSIS:
I. Samples
Additional U.S. Note 4, Chapter 24, HTSUS, states that certain samples of tobacco products provided for in Chapter 24 are entitled to duty-free treatment under Chapter 98, HTSUS.
Subheading 9811.00.40, HTSUS, provides for the free entry of:
[s]amples of tobacco products, and cigarette papers and tubes (each sample consisting of not more than (a) 3 cigars, (b) 3 cigarettes, (c) 3.5 grams of tobacco, (3.5 grams of snuff, (e) 3 cigarette tubes or (f) 25 cigareete papers) to be used in the United States only for soliciting orders by persons importing tobacco products, cigarette papers or cigarette tubes in commercial quantitites.
U.S. Note 2, Subchapter XI, Chapter 98, provides that the provisions of subheading 9811.00.40, HTSUS, apply to not more than one sample of each tobacco product, cigarette paper or cigarette tube admitted during any calendar quarter for the use of each person importing tobacco products, cigarette papers or cigarette tubes in commercial quantities.
The controlling factor is whether the importer uses the samples in the U.S. for the purpose of soliciting purchase orders for foreign merchandise and the creation of demand for future orders. In this case, you state that the cigarettes are not for use in the U.S., but rather will be used as samples abroad. Accordingly, as the cigarettes will not be used in the U.S. as samples, but rather will be used as samples abroad, they will not be eligible for duty-free treatment as samples under 9811.00.40, HTSUS. If, however, you use them as samples in the U.S. for the purposes of soliciting orders and you do not sell them in the U.S., you may import 3 cigarettes of each tobacco product (in this case you only refer to one type of tobacco product) duty-free during any calendar quarter.
In the alternative, subheading 9804.00.65, HTSUS, provides for the duty free treatment of articles, not over $400 in aggregate fair retail value in the country of acquisition, accompanying a returning U.S. resident that are for his personal or household use, but not imported for the account of any other person nor intended for sale. The provision contains certain limitations for alcoholic beverages and tobacco products ( 200 cigarettes). Also, a returning resident may not have claimed such an exemption within 30 days preceding his or her arrival. Although you state that you do not intend to sell the cigarettes in the U.S. or import them for the account of any other person, you do state that you intend to export them for use as samples abroad. Therefore, we find that since you are not using the cigarettes for your personal or household use, subheading 9804.00.65, HTSUS, will not be applicable. In a telephone conversation with a member of my staff, you mentioned that you were informed that you could enter cigarettes duty-free up to a value of $10.00 (in your case 10 cartons). Other than the subheadings discussed above, there are no other tariff provisions that would allow duty-free treatment for cigarettes from Mexico.
II. Country of Origin Marking
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 imported in 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.
As you have indicated that you will be exporting the cigarette packs from the U.S. for use as samples abroad, you will be the ultimate purchaser in the U.S. and you must be aware that the origin of the cigarettes is Mexico. Please note, however, that 19 CFR 11.13 provides that articles or containers which bear false designations of origin, including words or other symbols tending falsely to describe or represent the articles, are prohibited from importation under 15 U.S.C. 1125. Since you indicate that the words “Product of North America” will be covered by a sticker indicating the origin of the cigarettes as Mexico, the cigarettes will not be prohibited from importation pursuant to 19 CFR 11.13.
Please note that if you wish to import the cigarettes for use in the U.S., the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134 will apply. Section 134.46, Customs Regulations (19 CFR 134.46) requires that when the words “United States”, or “American”, the letters “U.S.A.”, any variation of such words or letters, or 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, appear 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. Therefore, if you intend to sell the cigarettes in the U.S., you should alter the packaging so that the country of origin marking is on the same side as the references to “American Blend Full Flavor”, and “Baltimore MD.”
HOLDING:
Based on the information and photocopies submitted, the cigarettes will not be eligible for duty-free treatment as samples under subheading 9811.00.40, HTSUS, as they are not intended to be used as samples for soliciting orders of foreign merchandise in the U.S. Additionally, since you are not importing the cigarettes for your personal or household use, subheading 9804.00.65, HTSUS, will also not be applicable. The cigarette packs and cartons will not be denied importation if stickers, indicating the origin as Mexico, are used to cover the words “Product of North America”.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division