Mar-2-05 CO:R:C:S 735588 AT
District Director of Customs
Laredo, Texas 78044-3130
RE: Internal Advice Request No. 27/94; country of origin
marking requirements for imported glass bottles to
be filled in the U.S.; Article 509; NAFTA Marking Rules;
usual containers; container marking; U.S. references;
section 134.22(d)(2) of the interim regulations; section
102.14 of the interim regulations; 19 CFR 134.46
Dear Madam:
This is in response to your memorandum dated April 15, 1994,
forwarding the February 23, 1993, Internal Advice Request of
Brownstein, Zeidman and Lore on behalf of Vitro Packaging, Inc.
("Vitro") concerning the country of origin marking requirements
for glass containers imported from Mexico to be filled in the
U.S. with beverages (or other similar products). We regret the
delay in responding.
FACTS:
Vitro imports glass containers, consisting of bottles or
jars, from Mexico to be filled in the U.S. with beverages (or
other similar products) in the two following situations. Vitro
is the importer of record. However, in both situations, Vitro
will not be the party actually filling the containers. Rather,
Vitro receives orders for these containers from its customers in
the U.S., who will be the ones actually filling these containers.
Situation 1. Vitro imports glass containers made in Mexico. The
containers have labels permanently printed on them (by one of a
number of methods) which state the name of the product with which
it will be filled (e.g., Coca-Cola), and other information
required by the U.S. Food and Drug Administration ("FDA") labeling requirements, including the name of the bottler (Vitro
Packaging's customer) and its address (or at least the name of
the city in the United States where the customers are located).
The containers are filled by the bottler with beverages (or other
similar products), and then shipped to wholesalers/retailers for
distribution and sale. These containers are not intended to be
reused.
Situation 2. Vitro ships U.S. manufactured glass containers to
Mexico, where they will be labeled with an applied ceramic label
("ACL"). These ACLs will contain the name of the product and all
other information required by the FDA, including the bottler's
U.S. address (or at least the name of the U.S. city of the
bottler). The containers will then be reimported by Vitro, sent
to its U.S. customers, who will fill the containers and then ship
them to wholesalers/retailers for distribution and sale. These
containers are not intended to be reused.
You have requested a determination of the country of origin
marking requirements for the imported glass containers imported
into the U.S. to be filled with beverages under the two
situations described above.
ISSUE:
What are the country of origin marking requirements for
imported glass containers that are to be filled in the U.S. in
the two situations described above?
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 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.
The country of origin marking requirements for a "good of a
NAFTA country" are also determined in accordance with Annex 311
of the North American Free Trade Agreement ("NAFTA"), as
implemented by section 207 of the North American Free Trade
Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057)
(December 8, 1993) and the interim amendments to the Customs
Regulations published as T.D. 94-4 (59 Fed. Reg. 109, January 3,
1994) with corrections (59 Fed. Reg. 5082, February 3, 1994) and
T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993). These interim
amendments took effect on January 1, 1994, to coincide with the
effective date of the NAFTA. The Marking Rules used for
determining whether a good is a good of a NAFTA country are
contained in T.D. 94-4 (adding a new Part 102, Customs
Regulations). The marking requirements for these goods are set
forth in T.D. 94-1 (interim amendments to various provisions of
Part 134, Customs Regulations).
Section 134.1(g) of the interim regulations, defines a "good
of a NAFTA country" as an article for which the country of origin
is Canada, Mexico or the U.S. as determined under the NAFTA
Marking Rules.
Country or Origin of the Imported Glass Containers
In this case, glass containers manufactured in Mexico
(situation 1), or U.S. manufactured glass containers exported to
Mexico for labeling (situation 2), are imported from Mexico into
the U.S. to be filled with beverages. Thus, in order to
determine the appropriate marking requirements of the imported
glass containers, we must first determine under the NAFTA Marking
Rules the country of origin of the imported articles.
Part 102 of the interim regulations, sets forth the "NAFTA
Marking Rules" for purposes of determining whether a good is a
good of a NAFTA country for marking purposes. Section 102.11 of
the interim regulations, sets forth the required hierarchy for
determining country of origin for marking purposes. Section
102.11(a) of the interim regulations states that "[t]he country
of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that good
undergoes an applicable change in tariff
classification set out in section 102.20 and
satisfies any other applicable requirements of that
section, and all other requirements of these rules
are satisfied."
"Foreign Material" is defined in section 102.1(e) of the interim
regulations as "a material whose country of origin as determined
under these rules is not the same country as the country in which
the good is produced."
In situation 1, the glass containers are manufactured in
Mexico, thus we will assume for purposes of this case, that the
requirements of section 102.11(a)(1),(2) or (3) are satisfied and
the country of origin of the glass containers is, Mexico.
Since, in situation 2, the glass containers are manufactured
in the U.S. and exported to Mexico where they are labeled with an
applied ceramic label and then returned to the U.S., the
containers are neither wholly obtained/produced nor produced
exclusively from domestic materials. Therefore, paragraphs
(a)(1) and (a)(2) of section 102.11 cannot be used to determine
the country of origin of the glass containers. Thus, paragraph
(a)(3) of section 102.11 is the applicable rule that next must be
applied to determine the origin of the containers.
The glass containers are classified under heading 7010,
HTSUS. The labeled glass containers returned to the U.S. are
classified in the same subheading. The applicable change in
tariff classification set out in section 102.20(m), Section XIII,
Chapters 68 through 70, 7010-7018 of the interim regulations
provides:
7010-7018 .... A change to 7010 through 7018 from any
other heading, except from heading 7020;
or
.... A change to heading 7010 through 7018 from
heading 7020 if that change results in a
substantial transformation.
In this case, since the U.S. glass containers are classified
under heading 7010, HTSUS, both before and after the labeling
procedure in Mexico, they do not undergo the applicable change in
tariff classification set out in section 102.20(m), and, as a
result, section 102.11(b) of the hierarchial rules must be
applied next to determine the country of origin of the imported
glass containers.
Section 102.11(b) of the interim regulations provides that:
Except for a good that is specifically described in the
Harmonized System as a set, or is classified as a set
pursuant to General Rule of Interpretation 3, where the
country of origin cannot be determined under paragraph
(a), the country of origin of the good:
(1) Is the country or countries of origin of the
single material that imparts the essential
character of the good, or
(2) If the material that imparts the essential
character of the good is fungible, has been
commingled, and direct physical identification of
the origin of the commingled material is not
practical, the country or countries of origin may
be determined on the basis of an inventory
management method provided under the Appendix to
part 181 of the Customs Regulations.
Also, relevant to this determination is the rule of
interpretation set forth under section 102.18(b)(2), which
states that:
For purposes of applying section 102.11, only domestic
and foreign materials (including self-produced
materials) that are classified in a tariff provision
from which a change in tariff classification is not
allowed in the rule for the good set out in section
102.20 shall be taken into consideration in determining
the parts or materials that determine the essential
character of the good.
Applying sections 102.11(b)(1) and 102.18(b)(2) to the facts
of this case, we find that the single material that imparts the
essential character of the ceramic labeled glass containers is
the glass container. Therefore, pursuant to section 102.11(b)(1),
the country of origin of the glass containers imported into the
U.S. for marking purposes, is the U.S.
However, section 102.14 of the interim regulations provides
in pertinent part that:
no good, last advanced in value or improved in
condition outside the United States has United States
origin. If under any other provisions of this part
such a good is determined to be a good of the United
States, that determination will be disregarded and the
country of origin of the good will be the last foreign
country in which the good was advanced in value or
improved in condition. (Emphasis added).
"Advanced in value" is defined in section 102.1(a) as "an
increase in the value of a good as a result of production with
respect to that good, other than by means of those 'minor
processing' operations described in paragraphs (m)(5), (m)(6) and
(m)(7) of this section". "Improved in Condition" is defined in
section 102.1(i) as "the enhancement of the physical condition of
a good as a result of production with respect to that good, other
than by means of those 'minor processing' operations described in
paragraphs (m)(5), (m)(6) and (m)(7) of this section". The minor
processing operations described in paragraphs (m)(5), (m)(6) and
(m)(7) of section 102.1, include unloading, reloading or any
other operation necessary to maintain the good in good condition;
putting up in measured doses, packing, repacking, packaging,
repackaging; and testing, marking, sorting or grading. In this case, we find that the U.S. origin glass containers
are not advanced in value or improved in condition as a result of
the labeling operation performed in Mexico. The labeling
operation is considered to be the equivalent of "marking", one of
the minor processing operations identified as excluded from the
definition of "advanced in value" or "improved in condition".
Accordingly, section 102.14 is not applicable, and pursuant to
section 102.11(b)(1),the country of origin of the labeled glass
containers imported into the U.S., is the U.S. for purposes of
the country of origin marking requirements of 19 U.S.C. 1304.
Marking Requirements of the Imported Glass Containers
I.
In situation 1, glass containers of Mexican origin are
imported into the U.S. to be filled with beverages (or other
similar products) by U.S. customers.
Section 134.22(d)(2), Customs Regulations (19 CFR
134.22(d)(2)), provides that:
A good of a NAFTA country which is a usual container,
whether or not disposable and whether or not imported
empty or filled, is not required to be marked with its
own country of origin. If imported empty, the importer
must be able to provide sufficient evidence to Customs at
the time of importation that it will be used only as a
usual container (that it will be filled with goods after
importation and that such container is of a type in which
these goods ordinarily reach the ultimate purchaser).
A usual container is defined in section 134.22(d)(1), (19 CFR
134.22(d)(1)), which provides, in part, that:
For purposes of this subpart, a usual container means the
container in which a good will ordinarily reach its
ultimate purchaser. Containers which are not included in
the price of the good with which they are sold, or which
impart the essential character to the whole, or which
have significant uses, or lasting value independent of
the contents, will generally not be regarded as usual
containers.
Since the glass containers of Mexican origin are to be
filled with beverages in the U.S. after importation, we find that
the glass containers are considered to be the type of usual
containers defined in 19 CFR 134.22(d)(1) regardless of whether
the containers are returned by the consumer after the contents
have been consumed. Thus, pursuant to 19 CFR 134.22(d)(2), the
glass containers are excepted from being marked with their own
country of origin. However, the outermost containers in which the glass
containers are imported and reach the ultimate purchasers in the
U.S., (the U.S. customers which fill the glass containers), are
required to be marked with the country of origin--Mexico--of the
glass containers. See, 19 CFR 134.24(c)(1).
Thus, the appearance of a U.S. reference on the glass
container itself would not trigger the special marking
requirements of 19 CFR 134.46 and 19 CFR 134.47, since the
ultimate purchaser who receives the imported glass containers
will not be misled by the U.S. references because the outermost
container will be marked with the country of origin--Mexico--of
the imported glass containers.
Nevertheless, under these circumstances, the existence of
134.46 and 134.47 type references on the outermost container of
such articles, cause the special marking requirements of these
sections to apply for the marking of the outermost containers
which reach the ultimate purchasers in the U.S.
II.
In situation 2, the U.S. origin glass containers which are
exported to Mexico for ceramic labeling and are then returned to
the U.S. to be filled with beverages (or similar products) by
U.S. customers, are determined to be of U.S. origin. Section
134.32(m), Customs Regulations (19 CFR 134.32(m)), provides that
products of the U.S. exported and returned are excepted from
country of origin marking requirements. Accordingly, since the
country of origin of the ceramic labeled glass containers
imported from Mexico is the U.S., the glass containers are
excepted from country of origin marking requirements under
section 134.32(m). Also, because the ceramic labeled glass
containers are of U.S. origin, an ultimate purchaser of the glass
containers would not be misled by any U.S. reference which
appears on the glass containers or their outermost containers in
which the articles are imported.
Please note that, if a phrase such as "Made in the U.S.A."
is marked on the glass containers or the outermost containers in
which the articles are imported, we advise you to contact the
Federal Trade Commission (FTC), Division of Enforcement, 6th &
Pennsylvania Avenue, NW, Washington D.C. 20508, since use of the
phrase "Made in U.S.A." is under the FTC's jurisdiction.
HOLDING:
Assuming that the glass containers, in situation 1, imported
from Mexico are goods of Mexico, a NAFTA country, and are to be
used in the U.S. in the manner described above, the containers
are considered to be "usual containers" as defined in 19 CFR 134.22(d)(1) and thus are excepted from country of origin marking
pursuant to 19 CFR 134 22(d)(2), regardless of whether the
containers are returned by the consumer after the contents have
been consumed.
Pursuant to 19 CFR 134.24(c)(1), the outermost containers in
which the glass containers are imported and reach the ultimate
purchasers in the U.S., (the U.S. customers which fill the glass
containers), are required to be marked with the country of
origin--Mexico--of the glass containers. Accordingly, any
instance where a U.S. reference appears on the glass container
itself would not trigger the special marking requirements of 19
CFR 134.46 and 19 CFR 134.47, since the ultimate purchaser which
receives the imported glass containers will not be misled by the
U.S. references because the outermost container will be marked
with the country of origin--Mexico--of the imported glass
containers.
Nevertheless, under these circumstances, the existence of
U.S. references on the outermost container of such articles,
cause the special marking requirements of 19 CFR 134.46 and 19
CFR 134.47 to apply for the marking of the outermost containers
which reach the ultimate purchasers in the U.S.
The country of origin of glass containers of U.S. origin
exported to Mexico to be labeled with ACLs and returned to the
U.S. to be used in the manner described in situation 2, is the
U.S. Accordingly, pursuant to 19 CFR 134.32(m), the glass
containers are excepted from country of origin marking
requirements. Because the glass containers are of U.S. origin an
ultimate purchaser of the glass containers would not be misled by
any U.S. reference which appears on the glass containers or their
outermost containers in which the articles are imported.
This decision should be mailed by your office to the
internal advice requester no later than 60 days from the date of
this letter. On that date the Office of Regulations and Rulings
will take steps to make the decision available to Customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, LEXIS, Freedom of
Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division