MAR-2-05 CO:R:C:V 732382 KG

Jack Kroll
John Wagner Associates, Inc.
205 Mason Circle
Concord, California 94520

RE: Country of origin marking of drywall screws

Dear Mr. Kroll:

This is in response to your letter of May 5, 1989, requesting a ruling on the country of origin marking of drywall screws.

FACTS:

John Wagner Associates, Inc. ("the importer") imports drywall screws from Japan, Taiwan and Korea. The importer also purchases drywall screws from a U.S. factory. After the screws from various sources are received at the warehouse, the importer reboxes the screws into smaller cartons, mixing the imported screws with the domestic screws. You informed a member of my staff that about 15% of each carton will be comprised of screws manufactured in the importer's factory in the U.S. and other U.S.-made screws.

ISSUE:

What is the proper country of origin marking of a mixture of imported and U.S. drywall screws.

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 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., 27 C.C.P.A. 297 at 302 (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 134.33, Customs Regulations (19 CFR 134.33), excepts certain articles from individual country of origin marking in accordance with 19 U.S.C. 1304(a)(3)(J) and only requires that the outermost container in which the article is imported in be marked with the country of origin. Screws are listed as one of the articles entitled to this exception.

We are not aware of any specific ruling concerning the country of origin marking of screws. Screws, nuts, bolts and washers are different types of industrial fasteners. In ruling HQ #723668 (December 12, 1983), published as C.S.D. 84-56, it was held that the country of origin marking requirement applicable to distributors of industrial fasteners was modified to permit a country of origin label to be affixed to containers of repackaged fastener which will list only the major source countries from which a particular repackager acquires his stock. This list should begin with that country from which a distributor obtains the greatest percentage (by weight or by piece) of his stock. The countries would be listed in order of percentage contributions. It would not be necessary to list all countries from which a particular repackager obtains only relatively small quantities of fasteners. Customs allowed this partial exemption to "eliminate the economic prohibitions of strict compliance but preserve the repackager's obligation to advise the ultimate purchaser of the foreign origin of the repackaged fasteners."

The question of how to mark the containers of industrial fasteners when the company comingles foreign-made and U.S.- made fasteners was addressed in ruling HQ 724388 (January 31, 1984). In that case, 25% of the volume of fasteners shipped by the company for the year was U.S.-made but the company did not consistently add a substantial amount of U.S.-made fasteners to their packages. As much as 60 or 70% of the repackaged containers would contain no domestic product at all. Customs ruled that the U.S. was a major source country but that a proposed label reading "This package contains articles from one or more countries, including the following: Japan, Taiwan, U.S.A., Korea, Canada, China." was not appropriate. In that case, Customs recommended that the label read:

This package contains articles from one or more foreign countries, including the following: (list without reference to U.S.A.), and may also contain domestic articles.

Customs recommended this wording on the label because it would accurately describe the repackaging operation without misleading the ultimate purchaser.

In this case, the importer mixes about 15 % U.S.-made screws with foreign-made screws on a regular basis. Given these facts, it would not be misleading to list the U.S. along with foreign source countries in order of the percentage of drywall screws each source contributes to the total package.

On September 19, 1989, the U.S. House of Representatives passed the Fastener Quality Act, HR 3000 and referred it to the Senate Committee on Commerce, Science and Transportation. In light of that bill, Customs is reviewing its position on the country of origin marking of industrial fasteners. However, at this time, C.S.D. 84-56 and HQ ruling 724388 are controlling and the importer can use a label similar to the one recommended.

HOLDING:

The importer, who mixes a stock of foreign-made and about 15% U.S.-made screws on a regular basis, may mark the reboxed cartons with a label that includes the U.S. with a list of other foreign countries in order of the percentage that each source country contributes to the total stock.

Sincerely,

John Durant
Director,
Commercial Rulings Division