MAR-2-05 CO:R:C:V 734363 RSD
Richard M. Belanger, Esq.
Powell, Goldstein, Frazer & Murphy
Sixth Floor
1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
RE: Country of origin marking requirements for modems kits
containing a modem, transformer, and telephone cable, sets,
components, sealed containers; 19 CFR 134.24; T.D. 91-7
Dear Mr. Belanger:
This is in response to your letter dated September 25, 1991,
on behalf of your client, Hayes Microcomputer Products,
requesting a ruling concerning the country of origin marking
requirements for modem kits. Subsequently, you submitted a
sample of the sealed box containing the modem kit for our
consideration. An additional letter detailing cost information
was submitted on January 23, 1992.
FACTS:
Hayes Microcomputer Products, Inc. ("Hayes") produces modems
at its manufacturing facility in Norcross, Georgia. A modem is
a device that adapts a terminal or a computer to a communications
network. Modems turn digital pulses from a computer into
frequencies (modulate) within the audio range of the telephone
system and convert the frequencies back into digital pulses
(demodulate) on the receiving side.
Each modem is inserted into a cardboard box together with
both a direct plug-in transformer (used to plug the modem into
the standard three-prong wall socket) and a 7-foot section of
telephone cable (used to connect the modem to the telephone wall
jack). The product containing the modem, the transformer, and
the telephone cable is retailed under the name V-series
Smartmodem 2400.
The transformers can be sourced from any of several
countries (United States, Taiwan, Korea, Malaysia, Mexico, Hong
Kong, Singapore, etc.). The telephone cables currently are
sourced from Taiwan, but may be sourced from other countries in
the future.
The sample transformer is marked to indicate its country of
origin, Korea, in white letters about 1/16th of an inch high on
the same side as the prongs near other informational writing.
The phone plug is marked with its country of origin, Taiwan, by
an adhesive sticker wrapped around the cable. You state that
whenever the transformers and cable are sourced from aboard, they
will be individually marked conspicuously, legibly, and
permanently with the English name of the country of origin. The
marked components are combined in a retail package with the U.S.
made modem. Before it reaches the ultimate purchaser, the
cardboard box is shrinked-wrapped. Hayes seeks to have the
package marked as follows:
Modem made in U.S.A. Transformer and telephone cable
of foreign origin are individually marked with specific
country origin.
The transformer represents less than 2% of the retail cost of the
kit, and the cable, less than 1%. Because the source countries
for the cable and transformer can constantly change, the
importer contends that it would extremely costly and burdensome
to develop different retail packages for all the various country
of origin combinations for the modems, cables, and transformers.
ISSUE:
Does the proposed country of origin marking on the sealed
box containing the modem and accessories satisfy the country of
origin marking law if there is no indication of the country of
origin of the transformer and the telephone cable on the box?
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, 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. As provided in section 134.41, Customs Regulations
(19 CFR 134.41), the country of origin marking is considered to
be conspicuous if the ultimate purchaser in the U.S. is able to
find the marking easily and read it without strain. That section
further provides that the degree of permanence should be at least
sufficient to insure that in any reasonably foreseeable
circumstance the marking shall remain on the article until it
reaches the ultimate purchaser unless it is deliberately removed.
Under 19 CFR 134.24(d)(2) for articles which are sold in sealed
containers which are normally unopened by the ultimate purchaser
before purchase, the containers must be marked to indicate the
country of origin of its contents.
Although the modem kits contain a transformer and a phone
cord of foreign origin, these items are minor pieces of the modem
set, in terms of both function and value. As noted above, their
combined retail cost is less than 3% of the modem. Their
function is simply to plug the modem into the wall socket and to
connect the modem to the telephone wall jack. Customs has
previously indicated that for various reasons, the marking of
every item in a collection of goods may not be consistent with
the purpose of the statute, or may be impractical and/or
undesirable. See T.D. 91-7, January 16, 1991. Although in this
case, both the transformer and the telephone cable are
individually marked with their country of origin, the ultimate
purchaser will not see these markings prior to purchase because
the items will be sold in a sealed container which will not
indicate the country of origin of these items. However, because
these components represent a very small part of the cost of the
kits, they are of relatively minor significance, and there are
difficulties associated with marking the containers with the
country of origin of the cable and transformer, in accordance
with T.D. 91-7, we find that it is not necessary to mark the
containers to indicate the country of origin of the transformer
and the telephone cable. The increased costs and difficulties
associated with constantly changing the containers to reflect the
different the countries of origin of the transformer and the
cable cannot be justified in view of the fact that the cable and
transformer are not likely to significantly effect the purchasing
decision involved in buying the modem. This is especially true
when these items are individually marked with their country of
origin and the marking on the package does alert the ultimate
purchaser that the transformer and cable are of foreign origin.
HOLDING:
The proposed marking of the container is acceptable provided
that the transformer and cable are individually marked
conspicuously, legibly, and permanently with their country of
origin.
Sincerely,
John Durant, Director
Commercial Rulings Division