CLA-2 OT:RR:CTF:TCM H007964 JER
Danivia Vasconcelos
Customs and Traffic Manager, RCP. Inc.
2891 Langstaff Road
Concord, ON L4K 4Z2
Canada
RE: Request for Reconsideration of NY N004855; Country of Origin Marking; 37MT Repair Kit from Canada
Dear Ms. Vasconcelos:
This letter is in response to your request, dated February 6, 2007, submitted on behalf of RCP Inc., for reconsideration of New York Ruling Letter (NY) N004855, issued on January 17, 2007 as it pertains to the country of origin marking requirements for the 37 MT Repair Kit 12 V. For the reasons set forth below, we affirm NY N004855.
FACTS:
The merchandise at issue is the 37 MT Repair Kit 12V (item# 23864) (hereinafter, “starter repair kit”). It is a clear, heat-sealed, polyethylene bag containing approximately 40 assorted pieces, which include, among other goods, O-Rings, brushes, washers, screws and seals. The starter repair kit is used to facilitate the repair and overhaul of a Starter Motor 37 MT Series (automotive starter). In your initial submission, you stated that the components of the kit are imported into Canada from various countries which include: Argentina, China, Italy, Taiwan and the U.S. Once imported into Canada, the components are combined with Canadian components, assembled and packaged into kits and are sold as such.
In NY N004855, CBP noted that a large number of pieces were too small to have legible markings. Accordingly, in NY N004855, CBP determined, in relevant part, that the starter repair kit [bag] “should be marked, ‘Packaged in Canada with goods from Taiwan, China, Argentina, etc.’”
ISSUE:
Whether the country of origin marking requirements are impossible or sufficiently economically prohibitive to allow the starter repair kit to be marked “Made in China.”
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 its 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 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).
Part 134, CBP Regulations (19 CFR 134) implements the country of origin marking requirements and exception of 19 U.S.C. §1304. 19 C.F.R. §134.1 (d) defines the ultimate purchaser as generally the last person in the U.S., who will receive the article in the form in which it was imported. A country of origin marking is considered to be conspicuous if the ultimate purchaser in the United States is able to find the marking easily and read it without strain. See 19 CFR §134.41(b), CBP Regulations, and Headquarters Ruling Letter (HQ) 562832, dated October 23, 2003.
You request reconsideration of the country of origin marking requirement set forth in NY N004855 to allow you to label the starter repair kit “Made in China” since the goods are in your view, predominantly from China. Specifically, you state that “[a]t this point, the label system doesn’t have space capacity to accommodate all countries of origin in full English version.” You further state that, “to have the label capacity expanded in [your] current system will be impossible.”
In order for an article to be excepted from the country of origin marking requirements it must meet one of the exceptions set forth in Subpart D to Section 134 (19 C.F.R. §134). While you did not assert a specific exception, only 19 C.F.R. §134.32 (a) and (c) appear to be applicable to your contention that expanding your labeling capacity to accommodate each country of origin would be “impossible.” For the reasons set forth below, we find that the subject merchandise does not meet any of the exceptions to the marking requirements and that the (bag containing the) starter repair kit should be marked according to the decision in NY N004855.
You have not provided any information which would confirm that the heat-sealed, polyethylene bags, in which the starter repair kit is contained, is incapable of being marked with the countries of origin. Moreover, you have not provided any evidence which would indicate that expanding your labeling system to accommodate multiple countries of origin is indeed impossible. Accordingly, 19 C.F.R. §134.32 (a) which excepts from the country of origin marking requirements “articles that are incapable of being marked”, is inapplicable.
Moreover, expanding the capacity of a labeling system, is not in our view, economically prohibitive and therefore not sufficient to find exemption under 19 C.F.R. §134.32 (c). Although relatively little has been written in explaining exactly what the term “economically prohibitive” means, several factors have been considered to help determine when marking an item would be economically prohibitive. These include situations in which the requirement to mark the article to indicate its country of origin would force the producer to incur a cost that would require the item to be marked at a price at which: (1) the item could not be sold since an individual would not buy it; (2) no profit could have been made; (3) the profit that could have been obtained would not have been sufficient to induce the importer to handle the item. See Note, Country of Origin Marking, 6 Law and Policy in Int'l Business 485, 501 502 (1974), citing Bur. Cust. Customs Information Exchange Ruling 114/51 (1951); See also, HQ 733889, dated September 13, 1991.
In the instant case, you have not provided any information that would indicate that expanding the capacity of your existing labeling system would meet any of the aforementioned factors used in determining whether marking would be economically prohibitive to the importation of the subject merchandise. In HQ 560776, dated May 4, 1999, CBP held that the additional printing costs associated with printing separate printing cards for blister packs was not sufficiently economically prohibitive to warrant exemption under 19 C.F.R. §134.32 (o). Further, in HQ 734544, dated June 24, 1992, we noted that where a product which consisted of items from multiple countries and repackaged in the importing country, that it was not economically prohibitive to mark the articles with a substantial degree of accuracy with the major source countries. See C.S.D. 84-50 and C.S.D. 84-44.
Based on all the aforementioned, we find that adherence to the country of origin marking requirements are neither impossible nor economically prohibitive. As such, the starter repair kit [bag] must be marked as a product of Canada, Argentina, China, Italy and Taiwan.
Note that goods determined to be an article of U.S. origin are not subject to the country of origin marking requirements of 19 U.S.C. §1304. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC).
HOLDING:
The proposed marking for the 37 MT Repair Kit 12V (starter repair kit), does not satisfy the marking requirements of 19 U.S.C. §1304 and 19 CFR Part 134 and is not an acceptable country of origin marking for the imported merchandise. Therefore, the polyethylene bag containing approximately 40 assorted pieces must be marked as being a product of Canada, Argentina, China, Italy and Taiwan.
EFFECT ON OTHER RULINGS:
NY N004855, dated January 17, 2007, is hereby AFFIRMED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division