MAR 2-05 CO:R:C:S 558638 AT
Mr. Will E. Leonard, Esq.
Mr. Alexei J. Cowett, Esq.
Stroock & Stroock & Lavan
1150 Seventeenth Street, N.W.
Washington, D.C. 20036-4652
RE: Country of origin marking requirements for imported gauges
incorporated into finished refrigerators, pumps and other
products; gauges; substantial transformation; ultimate
purchaser; U.S. place references; 19 U.S.C. 1304;
19 CFR 134.35; 19 CFR 134.36(b); 19 CFR 134.46 19 CFR
134.47; C.S.D. 93-15; HQ 733352
Dear Sirs:
This is in response to your letter dated July 1, 1994, on
behalf of Ametek, U.S. Gauge Division ("U.S. Gauge") concerning
the country of origin marking requirements for imported gauges
that are to be incorporated into finished refrigerators, pumps
and other products in the U.S. Sample gauges and their packaging
containers were submitted with your letters.
FACTS:
U.S. Gauge intends to import foreign manufactured gauges for
sale to original equipment manufacturers ("OEMs") and to
distributors for sale as replacement parts.
Gauges Sold to OEMs for Incorporation Into Finished Articles
You state that those gauges sold to OEMs are to be
incorporated and used by the OEMs in the manufacture of finished
refrigerators, pumps and other products in the U.S. For purposes
of this ruling, we will assume that the gauges that are to be
sold to OEMs are used in the manufacture of domestic
refrigerators, pumps and other domestic products. The gauges will generally be imported in bulk shipping cartons marked with
the country of origin of the gauges (the shipping carton is the
outermost container). Unless opened for inspection upon entry,
the shipping cartons are delivered sealed and unopened to U.S.
Gauge's OEM customers.
The imported gauges that will be sold to OEMs are either marked
with U.S. Gauge's registered trademarks "USG" or "USG maltese
cross", or with the trade names and trademarks of third-party
OEMs, or may also include a reference to the U.S. city, state and
telephone number of the third-party OEM. Generally these
markings will appear on the face of the gauge. You state that
all the imported gauges which are marked with U.S. Gauge's
trademarks will be accompanied by the statutory registered
trademark designation (" "). A sample gauge marked with the "USG
maltese cross" registered trademark was submitted for our review.
The sample gauge has the "USG maltese cross" printed in black ink
and white lettering with the letter "R" enclosed in a circle
directly above the trademark.
Gauges Sold to Distributors for Sale as Replacement Parts
You also state that some of the imported gauges will be sold by
OEMs and distributors in the U.S. as replacement parts and will
not be used in the manufacture of completed refrigerators, pumps
and other products. The gauges sold as replacement parts will
either be packaged in a cardboard box marked with the country of
origin or will be sold without the box. The gauges sold without
the box will be individually marked by means of an adhesive
sticker affixed to the top of the gauge incorporated into the
product warning label. Samples were submitted for our review.
Detailed descriptions of the sample marked boxes and adhesive
stickers affixed to the gauges are discussed below.
ISSUES:
1. Are the imported gauges which are to be used and incorporated
into finished refrigerators, pumps and other articles by OEMs in
the U.S. excepted from being individually marked with their
country of origin if their outer containers are properly marked?
2. Can the imported gauges which are to be used and incorporated
into finished articles by OEMs in the U.S. be marked to indicate
some other geographical location other than the actual country of
origin of the gauge, such as the OEMs' U.S. address, when they
are imported into the United States? 3. What are the country of origin marking requirements for
the imported gauges which are to be sold as replacement parts in
the U.S.?
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 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. 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. Friedlaender & Co. 27
C.C.P.A. 297 at 302; C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and the exceptions of
19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), defines "country of origin" as the country of
manufacture, production or growth of any article of foreign
origin entering the U.S. Further work or material added to an
article in another country must effect a substantial
transformation in order to render such other country the "country
of origin" within the meaning of the marking laws and
regulations. In U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A.
267 (C.A.D. 98) (1940), the court held that an article used in
manufacture which results in an article having a name, character
or use differing from that of the constituent article will be
considered substantially transformed and the manufacturer or
processor will be considered the ultimate purchaser of the
constituent materials. In such circumstances, the imported
article is excepted from marking and only the outermost container
is required to be marked (see, section 134.35, Customs
Regulations).
Imported Gauges Used by OEMs in the Manufacture of Finished
Articles in the U.S.
The first matter that must be analyzed is who is the
ultimate purchaser of the imported gauges which are to be used by
OEMs in the manufacture of refrigerators, pumps and other
products in the U.S. 19 CFR 134.1(d)(1) states that if an
imported article will be used in manufacture, the manufacturer
may be the ultimate purchaser if he subjects the imported article
to a process which results in a substantial transformation of the
article. In HQ 733352 (May 3, 1991), Customs held that imported
pressure gauges which were to be used by OEMs in the manufacture
of commercial dishwashers, drilling equipment and refrigeration
equipment in the U.S. were substantially transformed as a result
of the U.S. processing, and therefore the OEMs were the ultimate
purchasers of the imported gauges. Customs stated that the
gauges are only one of many essential components involved in
making the finished article and that the gauge itself is not the
very essence of the completed equipment, nor does it impart the
ultimate shape, form and size to the completed product.
Similarly, in this case, the imported gauges are substantially
transformed when they are used in the manufacture of
refrigerators, pumps and other products. As in HQ 733352, the
gauges are only one of many components involved in making the
completed article (e.g, refrigerator). Therefore, in accordance
with 19 CFR 134.35, the OEMs are the ultimate purchaser of the
imported gauges. Further, as provided under 19 CFR 134.35,
properly marking the outer container with the country of origin
of the gauges is an acceptable country of origin marking for the
imported gauges provided they reach the OEMs in these marked
containers.
Imported Gauges that are Marked with U.S. references on the Dial
However, because U.S. Gauge intends to have the trademarks
"USG" or "USG maltese cross" or the U.S. address of the OEM (a
geographical location other than the actual origin of the gauge)
printed on the dial of some of the gauges when they are imported
into the U.S., it is necessary to consider the necessity for
additional marking. 19 CFR 134.36(b) provides that an exception
from marking shall not apply to any article or retail container
bearing any word letters, names, or symbols described in section
19 CFR 134.46 or 19 CFR 134.47 (geographic references) which
imply that the article was made or produced in a country other
than actual country of origin. 19 CFR 134.46 requires that when
the name of any city or locality in the U.S., other than the name
of the city or locality in which the article was manufactured or
produced, appears on an imported article or its container, there
shall appear, legibly, and permanently, in close proximity to
such words, letters or name and in at least a comparable size,
the name of the country of origin preceded by "Made in," "Product
of" or other words of similar meaning. The purpose of this
requirement is to prevent the possibility of misleading or
deceiving the ultimate purchaser of an article as to the actual
origin of the imported good. In this case we find that the trademarks "USG" and "USG
maltese cross" which appear on the gauges do not trigger the
special marking requirements of 19 CFR 134.47. However, the U.S.
locality references of the OEMs do trigger the special marking
requirements of 19 CFR 134.46 and thus only such references will
be considered for purposes of the application of the special
marking requirements of 19 CFR 134.36(b).
Customs has recently determined that the special
requirements of 19 CFR 134.36(b) should not be applied
automatically to all imported articles or their containers which
bear a non-origin geographical reference. In C.S.D. 93-15 (March
17, 1993) Customs held that imported upper barrels marked
"Beaumont, Texas" which were substantially transformed in the
U.S. by the ultimate purchaser (manufacturer of fire hydrants)
were excepted from marking pursuant to 19 CFR 134.35, and the
special requirements of 19 CFR 134.36(b) and 19 CFR 134.46 were
not applicable since the ultimate purchaser would not be misled
by the U.S. reference, "Beaumont, Texas. Customs stated that the
marking law, 19 U.S.C. 1304, is intended to ensure that the
ultimate purchaser is informed of the country of origin of the
imported article. Applying this rationale, Customs found that
because the upper barrels were substantially transformed by the
ultimate purchaser in the U.S., the concern that the general
public might be misinformed by the reference to "Beaumont, Texas"
on the finished fire hydrant is misplaced and beyond the scope of
19 U.S.C. 1304.
This reasoning applies to this case. Because they are
substantially transforming the gauges, the OEMs are the ultimate
purchasers. Therefore, as in C.S.D. 93-15, the question that
must be resolved is whether the U.S. references of the OEMs, such
as the OEM's U.S. address, would mislead the OEM as to the actual
origin of the imported merchandise. If the OEM, as the ultimate
purchaser knows the country of origin and will not be misled by
the U.S. place reference, then 19 CFR 134.36(b) would not be
applicable and the imported gauges can be excepted from
individual country of origin marking.
Your submission argues that the OEMs necessarily know the
country of origin of the imported gauges and will not be misled
by the U.S. address of the OEM printed on the dial of the gauge.
This is evidenced by the fact that, for those gauges which are
marked with the OEM's address, the OEMs have instructed the
foreign manufacturer to mark the dial with the OEM's U.S.
address. Also, the outermost cartons in which the gauges are
imported in bulk, and which reach the OEMs, will be properly
marked with the country of origin of the gauges. Based on these
considerations, we find that the OEM's U.S. address may in these
circumstances appear on the dial of the imported gauges, without
the accompaniment of country of origin marking on the gauges
themselves.
Country of Origin Marking for the Gauges Sold as Replacement
Parts in the U.S.
Imported gauges which are not used in the manufacture of
finished articles in the U.S., but rather are sold as replacement
parts by OEMs and distributors are not substantially transformed
in the U.S. Thus, the ultimate purchaser of the imported gauges
that are sold as replacement parts is not the OEM or the
distributor but rather is the person who purchases the gauge as a
replacement part. Accordingly, the gauges are not excepted from
marking pursuant to 19 CFR 134.35 and the gauge and/or its
container must be marked in accordance with the marking
requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
1. Imported Gauges Sold with a Cardboard box
You indicate that some of the gauges sold as replacement
parts will be packaged in individually sealed cardboard boxes
which will be of two different styles. One is plain and white,
marked only with the country of origin of the gauge on its flap
along with product information. The other type of box contains
the same country of origin and product description information on
its flap, but also is printed with the trademark and trade names
of Ametek, U.S. Gauge. Samples of both boxes were submitted for
our review. The plain and white sample box has the words "Made
in China" printed on the top flap of the box in black lettering
approximately 6 point. Other product information, such as the
part number, the rated PSI of the gauge, diameter of the gauge
dial and type of socket threading also appears on the top flap
above the country of origin marking. No other markings appear on
the box. The other sample box is predominantly white, although
red and blue colors also appear all over the box. Like the plain
box, the words "Made in China" are printed on the top flap of the
box in black lettering approximately 6 point. Other product
information, such as the part number, the rated PSI of the gauge,
diameter of the gauge dial and type of socket thread also appears
on the top flap. The company's name "Ametek" appears on the
bottom of all four sides of the box. Directly below the
company's name "Ametek", on the front and bottom panel of the
box, U.S. Gauge's trade name "U.S. Gauge Division" is printed in
white lettering (over a blue background) approximately 8 points.
A warning label is printed on one of the side panels indicating
that "Misuse of product may cause explosion and personal injury.
Read ANSI-B40.1 and apparatus installation/operating instructions
before using". With respect to the plain and white sample box marked with
the country of origin "Made in China" on the top flap of the box
in the manner described above, we find that the country of origin
marking is conspicuous, permanent and legible in satisfaction of
the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
The origin marking "Made in China" is easy to find and read and
is located in a place where an ultimate purchaser would look and
find the marking since other product information, such as the PSI
of the gauge and diameter of the dial is printed on the same flap
directly above the country of origin.
The other cardboard box (blue, white and red colored) has
the trademark "U.S. Gauge" printed on the bottom of the front and
pack panels of the box triggering the special marking
requirements of 19 CFR 134.47.
Section 134.47, Customs Regulations (19 CFR 134.47),
provides that when the name of a place other than the country of
origin appears as part of a trademark or trade name or as part of
a souvenir marking, the name of the actual country of origin must
appear in close proximity to the place name "or in some other
conspicuous location" (emphasis added). Whether the country of
origin appears "in close proximity" or in some other conspicuous
place, the name of the country of origin must be preceded by
"Made in," "Product of," or words of similar meaning. In other
words, if the question concerns a trademark, as is the case here,
the country of origin marking need only meet the general standard
of conspicuousness.
In this case, we find that the marking "Made in China"
which appears on the top flap of the box, directly below other
product information, is conspicuous, permanent and legible.
Also, the country of origin "China" is preceded by the words
"Made in". Accordingly, the country of origin marking on this
box satisfies the marking requirements of 19 CFR 134.47.
2. Marking the Box in Lieu of Marking the Gauges Themselves
The remaining issue is whether it is acceptable to mark the
two different styles of sealed cardboard boxes with the country
of origin in lieu of marking the gauges themselves.
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. You indicate
that the gauges which are sold with either of the two cardboard
boxes will reach the ultimate purchaser in these sealed marked
boxes. Accordingly, if Customs is satisfied that the gauges will
remain in the sealed cardboard boxes until they reach the
ultimate purchaser and if the boxes are marked in the manners
described above, the individual gauges would be excepted from
marking under this provision. Accordingly, marking the two
different styles of boxes in lieu of the gauges themselves is an
acceptable country of origin marking for the gauges that are to
be sold as replacement parts and that are marked with the
trademark "USG" or "USG maltese cross". However, this exception
does not apply if the gauges themselves contain a reference to a
geographic location other than the actual country of origin which
triggers the special marking requirements discussed below. In
those instances, the gauge must be individually marked with the
country of origin, irrespective of whether it is sold with one of
the two types of sealed cardboard boxes marked with the country
of origin.
3. Gauges Marked With a Geographical Reference Other Than the
Actual Country of Origin of the Gauge
You contend that some of the gauges, whether sold with or
without one of the two mentioned boxes, will depict a reference
to a geographic location other than the actual country of origin
of the gauge in that the face of the gauge will be marked with
the U.S. address of the OEM. You claim that the gauges which are
sold without the cardboard boxes will be individually marked with
its country of origin by means of an adhesive label affixed to
the dial housing which will also display the product warning. A
sample label affixed to a gauge was submitted for review. The
sample label is affixed to the top portion of the gauge. The
label states that "Misuse of product may cause explosion and
personal injury. Read ANSI-B40.1 and apparatus installation
/operating instructions before using. Do Not Use On Oxygen
Service". Directly below the warning, the words "Made in China"
are printed in black lettering approximately 3 points.
As previously stated, the imported gauges that will be
marked with the U.S. address of the OEM or distributor, triggers
the special marking requirements of 19 CFR 134.46. Accordingly,
the actual country of origin of the gauge must appear "in close
proximity" to the U.S. reference and in lettering of at least a
comparable size. In this case, a label marked with the country
of origin "Made in China" is affixed to the top of the gauge.
Although we do not have a sample marked with a U.S. address with
the label affixed to the gauge to review, we find that the label
is conspicuous and satisfies the other requirements of 19 CFR
134.46 if the label appears in close proximity to the U.S.
address and is in lettering of at least a comparable size.
However, we note that, if the U.S. reference of the OEM is part
of a trade name or trademark, 19 CFR 134.46 is not applicable--
rather, the 19 CFR 134.47 marking requirements must be satisfied.
In other words, if the question concerns a trade name or
trademark, the country of origin marking need only meet the
general standard of conspicuousness. We find that marking these gauges with the country of origin label, in the manner described
above, satisfies the conspicuousness requirement of 19 CFR 134.47
and is an acceptable country of origin marking for the gauges
marked with a U.S. reference which is part of a trade name or
trademark.
HOLDING:
Imported gauges that are to be incorporated and used by OEMs
in the manufacture of finished refrigerators, pumps and other
products in the U.S. are substantially transformed as a result of
the U.S. processing. Thus, the OEMs are the ultimate purchasers
of the imported gauges and the gauges are excepted from
individual country of origin marking provided the outermost
containers are marked with the country of origin and the district
director is satisfies that the gauges will reach the OEMs in
these marked containers.
Because the OEMs as the ultimate purchasers, are aware of
the country of origin of the imported gauges, and are not misled
by the OEM's U.S. address for the reasons stated above, 19 CFR
134.36(b), 19 CFR 134.46 and 19 CFR 134.47 are not applicable.
The imported gauges that are to be incorporated and used by the
OEMs in the manufacture of refrigerators, pumps and other
products in the U.S. may be imported into the United States with
the OEMs' U.S. address references, and without additional country
of origin marking appearing on the articles themselves, provided
the above conditions are satisfied.
Imported gauges that are sold as replacement parts and
packaged in cardboard boxes, marked with the country of origin as
described above, are excepted from individual country of origin
marking, provided the district director is satisfied that the
gauges will remain in these marked boxes until they reach the
ultimate purchasers of the gauges. This assumes that the gauges
themselves are not marked with a U.S. reference.
Imported gauges that are sold as replacement parts and which
are marked with a U.S. reference, whether or not packaged in
boxes marked with the country of origin, must be individually
marked to indicate their origin in accordance with the conditions
set forth above.
Sincerely,
John Durant, Director
Commercial Rulings Division