MAR-2-05 CO:R:C:V 735318 AT
Jeffrey W. Lorell, Esq.
Clapp & Eisenberg
One Newark Center
Newark, New Jersey
RE: Country of origin marking for imported faucets and pre-
rinse units repackaged in the U.S.; 19 CFR 134.46; 19
CFR 134.32(d)
Dear Mr. Lorell:
This is in response to your letters dated July 7, July 22,
and August 19, 1993, on behalf of Component Hardware Group (CHG),
requesting a prospective ruling pursuant to 19 CFR Part 177
concerning the country of origin marking requirements applicable
to the importation and repackaging of components for "Encore"
faucets and pre-rinse units. Representative samples of the
repackaged products were submitted with your letter.
By letter dated July 22, 1993, you informed this office that
the appropriate country of origin marking for CHG's Encore line
of faucets and pre-rinse units is one of several issues raised in
an action before the United States District Court for the
District of New Jersey entitled T&S Brass and Bronze Products,
Inc. v. Component Hardware Group, Inc., et al. You also advise
that the repackaging program which is the subject of this ruling
request has already been implemented with local Customs at the
port of entry (JFK Airport), that a certification in that regard
has been filed and approved, and that there is no dispute with
Customs over any current transaction. A copy of the
certification was submitted with your letter.
The conditions provided in section 177.7(b), Customs
Regulations (19 CFR 177.7(b)) must be satisfied for issuance of a
binding ruling to be appropriate in this case. That section
provides in part that:
no ruling letter will be issued with respect to
any issue which is pending before the United States
Court of International Trade, the United States Court
of Federal Appeals for the Federal Circuit, or any court
of appeal therefrom. Litigation before any court will
not preclude the issuance of a ruling letter, provided
neither the Customs Service nor any of its officers or
agents is named as a defendant.
Based on your representations, we find that the conditions of 19
CFR 177.7(b) are satisfied. The marking issue is not before
either the U.S. Court of International Trade nor the U.S. Court
of Appeals for the Federal Circuit, and neither the Customs
service or any of its officers or agents are named as defendants.
Accordingly, issuance of a binding ruling for prospective
transactions is appropriate in this case.
FACTS:
You state that CHG distributes specialty hardware and
related fixtures for use in commercial and industrial kitchens.
The "Encore" line of products consists of sink faucets and pre-
rinse units. The faucets of the "Encore" line are represented by
models K-51 and K-54. The pre-rinse units are generally either
model K-50 or K-53.
The components in the "Encore" product line are manufactured
in Taiwan and imported in bulk into the U.S. by CHG. You state
that the immediate containers and import shipping containers are
marked "Made in Taiwan" but the individual components are not
marked to indicate their origin. The components are placed in
inventory prior to repackaging.
Product Description
Components for the faucets (models K-51 and K-54) include
the spout and faucet body. The K-54 also features couplings.
The faucet body, including handles, valve stem, packing, and
washers, is pre-assembled in Taiwan. The faucet body is
disassembled and reassembled in the U.S. only if the mechanism is
faulty.
The pre-rinse units (models K-50 and K-53) consist of a hose
assembly, wall bracket assembly, faucet body, spring, riser pipe,
and hook. The hose assembly, consisting of four basic parts
(shroud and inner rubber hose, spray head, grip and spring
retainer), is assembled by CHG in the U.S. prior to repackaging.
The spray head is pre-assembled in Taiwan with disassembly and
reassembly only if necessary. The wall bracket assembly consists
of wall bracket clamp, nipple, and base. The faucet body is pre-
assembled in Taiwan.
Repackaging Operation
(1) Faucets: Faucets, consisting of spout, faucet body,
and couplings (in the case of K-54) are placed on a cardboard
insert, but not joined together. An adhesive country of origin
label (bottom label) is placed on the insert printed with the
following language:
"CRAFTED IN TAIWAN
Specified, tested and packaged by
Component Hardware Group, Inc., Lakewood, N.J."
The words "Crafted in Taiwan" are printed in bold blue capital
lettering approximately 7 point (a point is a unit of type
measurement equal to 0.01384 inch or nearly 1/72 inch). The
phrase "Specified, tested and packaged by Component Hardware
Group, Inc., Lakewood, N.J." is printed in blue lettering
approximately 7 point. Directly above the origin label appears a
second label (top label) printed with the statement "Component
Hardware Group Inc., Lakewood, N.J." in white lettering
approximately 3 point.
This language "CRAFTED IN TAIWAN/Specified, tested and
packaged by Component Hardware Group, Inc., Lakewood, N.J." also
appears on a hang tag tied by elastic string to the stem of the
faucet body which is tucked underneath so that it will survive
the effect of the heat and adhesive of the shrinkwrapping or
removal of the shrinkwrapping.
The faucet components are then shrinkwrapped against the
cardboard insert. The insert is then placed inside a cardboard
box, which is printed with the phrase "Encore by CHG" on the top
panel. An adhesive label is affixed on the outside of the box on
a side panel which identifies the model number and repeats the
language on the insert: "Crafted in Taiwan/Specified, tested and
packaged by Component Hardware Group, Inc., Lakewood N.J.". This
phrase is printed in white lettering approximately 5 point. The
words "Component Hardware Group" appear on the opposite panel and
back panel. On the bottom of the box the words "Pennsauken,
N.J." appear in white lettering as part of the box maker's
certificate. You state that all the boxes will be taped shut.
(2) Pre-rinse units: The hose assembly, faucet body, wall
bracket assembly, spring riser pipe, and hook are positioned
unjoined on a cardboard insert, shrinkwrapped, and placed in a
cardboard box. The box is marked in the same fashion as the
faucets, except that there are two cardboard inserts instead of
one. Each insert has an adhesive label (bottom label) attached
to it marked with the country of origin in the same manner as the
origin labels used for the faucets. Also, directly above each
origin label appears a second label (top label) marked identical
to the ones used with the faucets. An instruction/warranty sheet
is included in each box which contains two references to the CHG
street and post office address "1890 Swarthmore Ave., P.O. Box
1582, Lakewood, N.J. 08701" in connection with the "Limited
Warranty" information, a telephone number, facsimile number, and
the phrase "Printed in U.S.A.
You state that Encore line products are sold by CHG to
either industrial or commercial sink manufacturers (original
equipment manufacturers or "OEMs") who, in turn, sell to food
service equipment dealers or restaurants or commercial kitchens
or cafeterias. Alternatively, CHG may sell to distributors who
sell to food service equipment dealers who, finally, also sell to
restaurants or commercial kitchens and cafeterias. Installation
may be performed either by the OEM's, dealers, or contractors
hired by the end users.
You assert that the CHG box with shrinkwrapped components
inside is likely to reach the installation site inasmuch as the
packaging: 1) protects the finish of the product, and 2)
identifies the product for the installers, and 3) transports the
product components intact for installation.
Replacement Parts
You state that any replacement parts which CHG sells are
imported separately in shipping cartons marked "Made in Taiwan".
As imported, the components inside are generally wrapped in
polybags which are not marked except for a number. Following
importation the polybagged replacement parts are placed in bins.
When sold, CHG has certified that the polybags will contain
labels or cards sealed inside which contain country of origin
information. No sample was submitted for our review.
ISSUES:
Whether it is acceptable to mark the cardboard inserts and
outside boxes in which the imported faucets and pre-rinse units
are repackaged with the country of origin in lieu of marking the
article itself?
Whether the country of origin marking on the cardboard
insert and outer box containing imported faucets and pre-rinse
units and marked in the manner described above satisfies the
marking requirements of 19 U.S.C..1304 and 19 CFR Part 134?
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.
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304. Section 134.1(d), Customs Regulations (19 CFR
134.1(d)) defines ultimate purchaser as "generally the last
person in the U.S. who will receive the article in the form in
which it was imported." In this case, the ultimate purchaser of
the faucets or pre-rinse units is either the restaurant,
commercial kitchen or cafeteria which is the institution where
the product is installed. See C.S.D. 91-5 (1991); (auto
repairmen who install foreign parts in cars are the ultimate
purchaser of those parts).
Are The Faucets and Pre-rinse Units Excepted From Marking?
An article is excepted from marking under 19 U.S.C. 1304
(a)(3)(D) and section 134.32(d), Customs regulations (19 CFR
134.32(d)), if the marking of a container of such article will
reasonably indicate the origin of such article. However, since
the faucets and pre-rinse units are not imported in the
shrinkwrapped cardboard insert and box, whether the subject
articles are excepted from individual marking under 19 CFR
134.32(d) is for the district director to decide. In this regard
section 134.34, Customs Regulations (19 CFR 134.34), provides
that an exception may be authorized in the discretion of the
district director under 19 CFR 134.32(d) for imported articles
which are to be repacked after release from Customs custody under
the following conditions: (1) The containers in which the
articles are repacked will indicate the origin of the articles to
an ultimate purchaser in the U.S.; (2) The importer arranges for
supervision of the marking of the containers by Customs officers
at the importer's expense or secures such verification, as may be
necessary by certification and the submission of a sample or
otherwise, of the marking prior to the liquidation of the entry.
In this case, as supported by a copy of the repackaging
certificate submitted, it appears that the district director has
determined that the faucets and pre-rinse units may be excepted
from individual marking under 19 CFR 134.32(d), provided they are
marked in the manner described above and the conditions of 19 CFR
134.34 are satisfied.
Assuming that the district director remains satisfied that
the imported faucets and pre-rinse units will be repacked in the
manner set forth below, and that the other conditions set forth
in 19 CFR 134.34 are met, the district director may authorize an
exception under 19 CFR 134.32(d), in which case marking of the
faucets and pre-rinse units themselves would not be required.
The Marking of the Repacked Article
In determining whether the marking is acceptable, Customs
will take into account the presence of words or symbols on an
article which may mislead the ultimate purchaser as to the
country of origin. Consequently, if the words "United States,"
or "America," the letters "U.S.A.," any variation of such words
or letters, or the name of any city or locality other than the
country of origin appear on the imported article, special marking
requirements are triggered. See, 19 CFR 134.46
The special marking requirements set forth in section 134.46
are triggered by the presence of the words "Lakewood N.J."
printed on the labels (top and bottom label) affixed to the
shrinkwrapped insert (faucet) or inserts (pre-rinse unit), on the
label affixed to the side panel of the box and the hang tag
affixed to the faucet body. Accordingly, the actual country of
origin of the faucets and pre-rinse units must appear "in close
proximity" to the U.S. reference and in lettering of at least a
comparable size. Customs ruled in HQ 732689 (December 7, 1989),
that the phrase "Crafted in" is an acceptable country of origin
marking for purposes of 19 U.S.C. 1304. The words "Crafted in
Taiwan" which appear on the bottom label affixed to the insert(s)
and side panel of the box are in close proximity to the U.S.
reference "Lakewood, N.J." Also, although the U.S. reference
printed on the top label does not have the origin marking
"Crafted in Taiwan" printed on it, the bottom label marked
"Crafted in Taiwan" is directly below the top label which we find
to be in close proximity to the top label. The marking "Crafted
in Taiwan" printed on the hang tag affixed to the faucet body
also is in close proximity to the U.S. reference. In all cases,
the words "Crafted in Taiwan" are in lettering of at least in a
comparable size as the U.S. reference "Lakewood, N.J.". Also,
the faucet is marked with the country of origin by means of a
hang tag. Based on these considerations, we find that the
marking "Crafted in Taiwan" printed on the bottom label affixed
to the insert(s) and the side panel of the box, and a hang tag
affixed to the faucet body, satisfies the marking requirements of
19 CFR 134.46 and is an acceptable country of origin marking for
the imported faucets and pre-rinse units.
With respect to the U.S. references "1890 Swarthmore Ave.,
P.O. Box 1582, Lakewood, N.J. 08701" and "Printed in U.S.A."
which appear on the installation/warranty sheet and "Pennsauken,
N.J." printed on the bottom of the box, we find that these U.S.
references do not trigger the special marking requirements of 19
CFR 134.46. In C.S.D. 90-31 (December 20, 1989), Customs
indicated that under certain conditions geographic names
appearing in connection with imported articles do not necessarily
trigger the requirements of 19 CFR 134.46. In that decision,
Customs cited to several rulings including HQ 732329 (July 12,
1989), (address on a warranty card did not pose a risk of
confusion to ultimate purchaser) and HQ 732816 (November 24,
1989), (address printed on display ticket was provided to assist
customer in the event of questions concerning guarantees) where
it was decided that the context in which the names and addresses
were used was such that confusion regarding country of origin was
not conceivable. In more recent rulings, Customs determined that
certain information provided to enable customers to contact the
company regarding complaints or questions about the product did
not trigger the requirements of 19 CFR 134.46. (See, HQ 733840,
(February 1, 1991), (where garment hang tags, which included a
telephone number of the company and language which invited the
customer to contact the company for informational purposes, did
not trigger the requirements of 19 CFR 134.46). In the instant
case, neither the U.S. references printed on the warranty/
installation sheet nor the U.S. reference printed on the bottom
of the box triggers the requirements of 19 CFR 134.46. The U.S.
address "1890 Swarthmore Ave., P.O. Box 1582, Lakewood, N.J.
08701" printed on the installation/warranty sheet does not
connote origin but rather clearly invites the customer to contact
the company for product information, thereby dispelling any
potential confusion regarding country of origin.
HOLDING:
Assuming the district director authorizes an exception from
marking the faucets and pre-rinse units pursuant to 19 CFR
134.32(d) and 19 CFR 134.34, the proposed method of marking
described above satisfies the requirements of 19 U.S.C. 1304 and
19 CFR Part 134.
Sincerely,
John Durant, Director