MAR-2-05 CO:R:C:V 734165 RSD
M. Barry Levy, Esq.
Sharretts, Paley, Carter and Blauvelt
Sixty-seven Broad Street
New York, N.Y. 10004
RE: Country of origin marking requirements for LEGO and DUPLO
sets with pieces made in three different countries, toys, sets,
containers; 19 CFR 134.32(d)
Dear Mr. Levy:
This is in response to your letter dated June 28, 1991,
requesting a ruling on the country of origin marking requirements
for LEGO sets and DUPLO sets with pieces made in three different
countries. We have received your supplemental letter dated
August 2, 1991. We have also received a copy of sketches for a
proposed box containing the LEGOS.
FACTS:
Your client, LEGO Systems, Inc. (LEGO), sells toy sets
consisting primarily of small, uniformly sized and shaped plastic
building bricks which are produced in a variety of colors and are
sold under the names of LEGO or DUPLO. In addition to the
plastic bricks, each toy set contains one or more of the
following types of pieces: (1) decorative components (e.g.,
trees, flags, etc.); (2) functioning components (e.g., wheels,
hinges, etc.); and (3) figures representing people to provide a
human dimension. Some sets also have accessories to facilitate
the use of the toy, such as a brick separator and a brick sweeper
to assist the child in putting the toy set away. Each set
contains an average of 170 pieces, with the largest set having
340 pieces, and smallest containing as many as 29 pieces.
The LEGO pieces are made in one of three countries Denmark,
Switzerland, or the U.S. The Danish facilities are set up to
produce pieces only for those sets which are sold under the LEGO
name. The Swiss facilities primarily manufacture pieces for
sets sold under the DUPLO name, but also serve as a secondary
supplier for the LEGO pieces when necessary. The U.S. facilities
primarily serve as an additional supplier for the most commonly
produced pieces of both the LEGO and DUPLO sets. They are also
used as a secondary source for the less common LEGO and DUPLO
pieces when required. Every piece produced in the U.S. is also
manufactured in at least one of the other two countries, and a
number of them are manufactured in all three.
To respond to fluctuations in the demand for its individual
toy sets, LEGO is constantly shipping molds for the different
pieces of the toy sets from country to country to alter
production as needed. Thus, at different times a given LEGO
piece may be made in any one of the three countries, any two of
the countries, or in all three countries. A DUPLO piece may at
different times, be made only in Switzerland, only in the U.S. or
in both Switzerland and the U.S. However, though they may be
manufactured in two or three different countries, the bricks and
other shapes are identical in every respect, as all of the
plastic injection molds are made to the exact same specifications
by the same mold maker without regard to where they will be used,
and all plastic pellets are purchased from the same sources.
Foreign-made bricks and shapes are shipped in bulk to the
U.S., where they are commingled in containers with their
identical counterparts regardless of their country of production.
LEGO produces its toy sets by combining the required pieces in
sealed plastic bags and packaging them in retail containers.
Prior to retail packaging, the pieces made in the three countries
are commingled together in large bins. A sorting machine using a
random selection process chooses which pieces to put into the
retail packages. This random selection process will choose
pieces from all of the involved countries. It is highly
improbable that a LEGO set will not contain some pieces from all
three countries.
You also indicate that it would be extremely difficult if
not impossible, to produce a legible marking for the tiny LEGO
building bricks, which constitute the bulk of the sets. You also
state that it would be cost prohibitive for LEGO to change its
more than 4,000 molds in order to incorporate a country of origin
marking on each piece and would be inequitable based on a
previous ruling applicable to LEGO's products.
LEGO seeks to satisfy the country of origin marking law by
having the retail packages printed with the phrase "Made in
Denmark, Switzerland, and USA." In the case of the DUPLO sets,
the retail packages will be marked "Made in Switzerland and USA."
In some instance, the packaging will be imported filled with LEGO
products. In other instances it will imported empty to be filled
by LEGO in the U.S.
ISSUE:
Does the proposed marking "Made in Denmark, Switzerland,
and USA" on the retail packages of the LEGO sets and "Made in
Switzerland and USA" on the retail packages of the DUPLO sets
satisfy the country of origin marking law?
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 134.41(b), Customs Regulations (19 CFR
134.41(b)), mandates that the ultimate purchaser in the U.S. must
be able to find the marking easily and read it without strain.
An article is excepted from marking under 19 U.S.C. 1304
(a)(3)(D) and 19 CFR 134.32(d), if the marking of a container of
such article will reasonably indicate the origin of such article.
Accordingly, if the LEGO bricks are imported and sold in marked
containers and the ultimate purchaser can tell the country of
origin of the LEGO and DUPLO sets by viewing the country of
origin marking on the container, the individual pieces would be
excepted from marking under this provision.
In HQ 707219, July 1, 1977, plastic toy building brick sets
produced by LEGO were being imported into the U.S. Commingled
Danish and Swiss bricks, shapes, and other pieces were imported
into the U.S. in their retail containers. Customs indicated that
inasmuch as, in this instance, the plastic bricks and other
shapes will reach the ultimate purchaser in the retail
container, marking the retail container with the country of
origin will satisfy the requirements of section 304. Customs
also determined that a country of origin marking on the retail
box "Contents made in Denmark and Switzerland" would be
acceptable.
In a second situation covered by HQ 707219, some of the
commingled Danish and Swiss pieces were to be imported in bulk
for packaging in the U.S. Customs ruled that the marking on the
repacked retail container "Made in Denmark and Switzerland" would
also be acceptable provided that LEGO can make satisfactory
arrangements with the district director of Customs at the port of
entry to ensure that it will repackage the bricks and shapes in
containers marked to indicate the country of origin in accordance
with section 304.
The only distinction between HQ 707219 and the present case,
is that some of the plastic pieces will be made in the U.S. and
LEGO is seeking to include this fact on the country of origin
marking information on its retail boxes. You indicate that each
box of the LEGOS kits will contain pieces from the three
countries listed on the box. This is because the pieces are made
in the three countries and commingled together in storage bins.
A random sorting machine will select the pieces to put in each
retail box. The probability that the sorting machine will not
select pieces for a toy set from all three countries is
exceptionally remote. Under these circumstances, we find that
the marking on the container will properly inform the ultimate
purchaser of the countries of origin of the LEGO sets. The
alternative is to require that each piece be individually marked.
In view of the fact, that each set consists, on average of
approximately 170 pieces, we feel that such an approach in this
case would be exceptionally burdensome and unnecessary. This is
especially in view of the fact that the retail boxes cannot be
opened until after the purchase, the ultimate purchaser will not
see the individual LEGO or DUPLO pieces until after the sets are
purchased. Moreover, since the pieces for the LEGO sets are
fungible, the ultimate purchaser is not likely to be interested
in the country of origin of each individual piece. Accordingly,
the proposed country of origin markings on the retail boxes,
"Contents made in Denmark, Switzerland, and USA." in the case of
the LEGO sets and "Made in Switzerland and USA" for the DUPLO
sets are acceptable and individual pieces do not have to be
marked.
With respect to the merchandise which will be packaged into
retail packages after importation in accordance with 19 CFR
134.34, appropriate arrangements should be made with the district
director of Customs at the port of entry to ensure that the
marking requirements are satisfied.
The circumstances in this case are distinguishable from
those in HQ 732679, May 1990, which concerned the country of
origin marking of toy sets with components made in Mexico and the
U.S. In that case, the components were already marked with their
country of origin. Customs ruled that the marking "Contents from
USA and Mexico," was not specific enough, since it did not
identify which articles were of foreign origin as required by 19
U.S.C. 1304. Instead, we suggested that the marking "Contents
from USA and Mexico. See Marking on Each Article Inside." be
used. The facts of HQ 732679 and this case are distinguishable
in that the individual pieces were already being marked with
their country of origin, and no request was made for an exception
to marking the individual pieces. Moreover, the individual
pieces in the toy set were more unique than the pieces in LEGO
sets and the LEGO pieces are small and would be difficult to
mark.
HOLDING:
The individual pieces of the LEGO or the DUPLO sets are
excepted from country origin marking under 19 U.S.C.1304(a)(3)(D)
and 19 CFR 134.32(d) if the retail boxes are properly marked.
The proposed country of origin markings on the retail box of LEGO
or DUPLO sets are acceptable so long as each set will contain
pieces from all three countries listed on the box and the
appropriate arrangements are made with the district director as
set forth above.
Sincerely,
John Durant, Director
Commercial Rulings Division
cc: Area Director
New York Seaport
Attention: NIS Division