MAR-2-05 CO:R:C:V 734482 ER
Mr. Mark Mederski
Vice President, Membership
American Motorcyclist Association
P.O. Box 6114
33 Collegeview Road
Westerville, Ohio 43081-6114
RE: Country of Origin Marking for Enameled Lapel Pins from
China; Gifts; Ultimate Purchaser; 19 CFR 134.1(d); 19
CFR 134.1(d)(4); Pabrini, Inc. v. United States, 630
F.Supp. 360 (C.I.T. 1986); HQ734202 (November 12,
1991).
Dear Mr. Mederski:
This is in response to your letter of January 13, 1992,
addressed to the Office of the Commissioner concerning the
country of origin marking requirements for enameled lapel pins.
Your letter was forwarded to the Office of Regulations and
Rulings for a reply. No samples were provided.
FACTS:
American Motorcyclist Association ("AMA") orders enameled
lapel pins from International Badgeworks, a California based
company. The pins are made off-shore in Shang Hai, China, and
are shipped to International Badgeworks in California.
International Badgeworks then ships the pins to AMA's
headquarters in Westerville, Ohio. AMA receives the pins in
poly bags, 100 pins per bag. Each poly bag is sealed and is
marked with the country of origin.
AMA orders approximately 200,000 pins each year. There are
25 designs of pins and quantities range from as many as 50,000 of
one design to 2,000 of other designs. AMA awards 99 percent of
the pins on an annual basis, presumably to its members, for
longevity at the time of AMA membership renewal. The remaining
one percent of the pins are sold as replacements.
ISSUE:
Who is the ultimate purchaser of the pins that are given
away at the time of membership renewal and that are sold as
replacements?
Does the country of origin marking on the poly bags satisfy
the country of origin marking requirements of section 304 of the
Tariff Act of 1930, as amended (19 U.S.C. 1304)?
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 United States 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 United
States 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 are
the product. Part 134, Customs Regulations (19 CFR 134),
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304.
19 CFR section 134.1(d), Customs Regulations (19 CFR
134.1(d)), defines the "ultimate purchaser" as generally the last
person in the United States who will receive the article in the
form in which it was imported. 19 CFR section 134.1(d)(4),
Customs Regulations (19 CFR 134.1(d)(4)), specifies that if the
imported article is distributed as a gift the recipient is the
"ultimate purchaser". In a decision analogous to the present
case, Customs ruled that pens given away by companies to their
clients or customers as promotionals were "gifts" within the
meaning of the Customs regulations. As the recipients, the
clients or customers were the "ultimate purchasers" and hence the
pens had to be individually marked to comply with the country of
origin marking requirements of section 304 of the Tariff Act of
1930, as amended (19 U.S.C. 1304). There, Customs specified that
marking only the poly bags in which the pens were imported, and
not the individual pens, was not acceptable. HQ 734202 (November
12, 1991).
In Pabrini, Inc. v. United States, 630 F.Supp. 360, 361 n.5,
362 n.7 (C.I.T. 1986), the Court noted that the requirement that
all goods entering the United States must be marked with their
country of origin dates to the Tariff Act of 1890, ch. 1244,
section 6, 26 Stat. 567, 613. Under federal common law at the
time of the enactment of the statute, "gift" was defined as a
gratuitous transfer of property to another without consideration.
See, e.g., Schumacher v. United States, 55 F.2d 1007, 1011
(Ct.Cl. 1932). In the case at hand, since the lapel pins are
given away gratuitously as an award for longevity by AMA to
members at the time of membership renewal, under the Customs
regulations, the recipient of the pin would be considered the
ultimate purchaser. Thus, the lapel pins must be individually
marked in a permanent, legible and conspicuous manner so as to
indicate their country of origin to the recipient. Marking only
the poly bags in which the lapel pins are imported with the
country of origin is not acceptable since the pins do not remain
in the unopened poly bags until they reach the final recipient.
HOLDING:
Since the enameled lapel pins are awarded by AMA to members
for longevity at the time of membership renewal, the member
recipients are considered the "ultimate purchasers" within the
meaning of 19 U.S.C. 1304 and 19 CFR 134.1. Consequently, the
pins must be individually marked in a permanent, legible and
conspicuous manner to indicate their country of origin to AMA
member recipients.
Sincerely,
John Durant, Director
Commercial Rulings Division