MAR-2-05 CO:R:C:V 734796 RC
Mr. Edward L. Hart, Jr.
Lee Hardeman Customs Broker, Inc.
P.O. Box 45545
Atlanta, GA 30320-0545
RE: Country of Origin Marking of Screws; Shelf kits; 19 CFR
134.33; 19 CFR 134.26; 19 CFR 134.34; T.D. 91-7.
Dear Mr. Hart:
This is in response to your letter of August 14, 1992,
requesting a ruling on the country of origin marking requirements
for foreign manufactured screws imported into the U.S. and sold
as parts of unassembled shelf kits.
FACTS:
Your client, Woodline, Inc. (Woodline), will import in bulk
into the U.S. screws made in China. The screws will be packed in
plastic bags of approximately four screws per bag. The bags will
be packed ready for shipment in cartons marked with the country
of origin "Made in China" on the outer most container. The
screws themselves will not be marked pursuant to section 134.33,
Customs Regulations (19 CFR 134.33). After importation, the
screws will be sold to IKEA, a distributor of unassembled shelf
kits, who will attach packets of unmarked screws to unassembled
shelves in retail boxes containing other components of U.S.
origin. The screws cost $.12 and the wooden shelves $2.50 -
$3.00. Pursuant to a telephone conversation with Bjorn Karlsson,
of Woodline, on December 18, 1992, it is our understanding that
the screws and screw packets will not be sold individually; they
will only be sold as components of unassembled shelf kits.
Mr. Karlsson stated that the cost of the screws comprises three
to four percent of the total shelf kit cost, depending upon the
particular model. The screws are the only kit components of
foreign origin. A fax transmitted from Mr. Karlsson on December
18, 1992 demonstrates the label for the shelf kits containing the
bag of four screws. It indicates the following marking "Design
and Quality, IKEA of Sweden, Made in USA".
ISSUE:
Whether shelf kits containing foreign-made screws
must be marked to indicate their country of origin.
LAW AND ANALYSIS:
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 (or its container) imported into 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 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.
The "country of origin" for marking purposes is defined by
section 134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean
the country of manufacture, production, or growth of any article
of foreign origin entering the U.S. Provided for under section
134.1(d), Customs Regulations (19 CFR 134.1(d)), the "ultimate
purchaser" generally is defined as the last person in the United
States who will receive the article in the form in which it was
imported. The marking must be conspicuous to the ultimate
purchaser. Here, because the screws would not be sold for use in
the manufacture of finished shelves, the ultimate purchaser is
the person who buys the shelf kit at retail.
Pursuant to section 134.33, Customs Regulations (19 CFR
134.33), screws are "J-Listed", that is, imported screws are
excepted from country of origin marking inasmuch as their
containers are marked in a manner which is legible, conspicuous,
and permanent.
According to T.D. 91-7 (dated January 16, 1991), "if the
materials or components are not substantially transformed as a
result of their inclusion in a set or mixed or composite goods,
then, subject to the usual exceptions, each item must be
individually marked to indicate its own country of origin."
Thus, if the screws are installed in shelves prior to retail
sale, they are substantially transformed and not subject to
marking. Where the screws are sold as separate parts of kits,
they may constitute significant components requiring marking. As
discussed in T.D. 91-7, Customs will follow a "common sense"
approach in determining whether articles of foreign origin
imported as parts of kits will be subject to country of origin
marking.
In HQ 555365, we found that foreign-made screws when sold
with U.S.-made junction boxes were not subject to marking. The
reasoning was that in terms of value, the screws constituted an
insignificant part of the set, 2.3% of the total value. Here,
Mr. Karlsson indicates that the screws account for three to four
percent of the shelf kit cost; this percentage is de minimis.
Thus, we will extend the treatment of T.D. 91-7 to the instant
case provided that the screws are combined as described herein
with the unassembled shelving units for sale as kits and not
simply individual packets of screws.
HOLDING:
Imported screws, packaged in the U.S. for sale as components
of shelf kits, will not need to be marked to indicate their
country of origin based upon the finding that their cost is
de minimis, in comparison to the other shelf kit components. The
label on the shelving kit which reads "Design and Quality, IKEA
of Sweden, Made in USA", is subject to the requirements of the
Federal Trade Commission. Please be advised that you must comply
with the requirements of that agency.
Sincerely,
John Durant, Director