MAR-2-05 RR:TC:SM 559671 MLR
David W. Rose, Esq.
Intel Government Affairs
1634 I Street, N.W.
Suite 300
Washington, D.C. 20006
RE: Country of origin marking for semiconductors;
container; abbreviations; ISO code
Dear Mr. Rose:
This is in reference to your letter of February 2,
1996, requesting a ruling concerning the country of origin
marking requirements for semiconductor devices and their
containers.
FACTS:
Intel imports semiconductor devices from several
countries, including the Philippines and Malaysia. It is
stated that Intel currently marks both the individual
semiconductor devices and their containers with the country
of origin. Original equipment manufacturers (OEMs) receive
about 75 percent of the semiconductor devices imported by
Intel, and roughly 25 percent are sold to distributors. It
is stated that OEMs generally know where Intel assembles
the semiconductors through the qualification process. OEMs
are also stated to be ultimate purchasers because they
substantially transform the semiconductor devices by
incorporating them into various electronic articles. On
the other hand, distributors sell the devices to ultimate
purchasers, and the devices may be repacked prior to these
sales. In this situation, it is stated that Intel marks
the devices and their containers with the country of
origin, and notifies the distributors in writing of the
marking requirements pursuant to 19 CFR 134.26.
Intel wishes to use an abbreviated marking on
semiconductor devices which are packed in properly marked
containers. For example, Intel proposes the use of "Phil"
or ISO codes for Philippine origin devices. Intel also
seeks confirmation concerning an exception from marking
both the container and the semiconductor devices pursuant
to 19 CFR 134.32(h).
ISSUES:
I. If the semiconductor devices' container is properly
marked with the country of origin pursuant to T.D. 75-187, may the devices be marked with what otherwise
would be an unacceptable abbreviation or other
indicator of the country of origin?
II. Are semiconductor devices and their containers
excepted from country of origin marking because the
ultimate purchaser is aware of the country of origin
by virtue of the devices' character or the
circumstances of their importation if either the
devices or containers are marked with bar code or eye-readable ISO codes?
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. 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. Inc., 27 CCPA 297, 302, C.A.D. 104
(1940).
Part 134, Customs Regulations (19 CFR Part 134)
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304. Section 134.32(d), Customs
Regulations {19 CFR 134.32(d)}, excepts an article from
marking if its container will reasonably indicate the
origin of the article.
I. Abbreviation Marking
In T.D. 75-187, Customs stated that semiconductor
devices are excepted from individual marking if their
containers are properly marked and Customs officials at the
port of entry are satisfied that the devices will reach the
ultimate purchaser in the marked containers. Furthermore,
it was stated that when semiconductor devices made in a
number of different foreign countries are commingled and
subsequently repackaged for sale to the ultimate purchaser,
the marking requirements of 19 U.S.C. 1304 are met if the
containers are legibly and conspicuously marked to indicate
that the devices were made in one or more of the countries
listed on the container.
You also cite HRL 734761 dated October 16, 1992, where
Customs stated that the use of a multi-origin marking
statement on semiconductor containers is acceptable.
However, you state that Intel is not applying this ruling
because semiconductor repackers find the multiple origin
statement too lengthy to satisfy their packaging
specifications. In addition, some users want to know the
particular country of origin of the semiconductor device.
The problems in marking both the semiconductor devices and
their containers are space constraints on the devices, the
abbreviations used are not necessarily recognized by
Customs, and it is not cost effective to mark the
containers if the devices are already marked.
Therefore, Intel wishes to place a marking such as the
abbreviation "Phil" or an ISO code on Philippine origin
semiconductors. Intel alleges that under T.D. 75-187, the
legible and conspicuous marking of the container reaching
an ultimate purchaser is all that is required to comply
with 19 U.S.C. 1304, and as long as the abbreviation
marking does not conflict with the country of origin
information provided on the container, this should be
acceptable despite HRL 727843 dated July 3, 1985, and HRL
731021 dated June 24, 1988. In HRL 727843, Customs held
that the use of "Phil" was not an acceptable marking on
integrated circuits because it did not unmistakably
indicate the name of the country of origin even if the
ultimate purchaser knew that the Phillippines was one of
three or four common locations for the assembly of
integrated circuits and the ultimate purchaser would
understand "Phil" to be an abbreviation for the
Phillippines.
In HRL 735268 dated October 1, 1993, Customs
considered intravenous sets packaged in master cartons and
shipping cartons, which were both marked with the country
of origin. The individual intravenous pouches indicated a
U.S. address, and pointed to a lot code for the country of
origin. The intravenous sets were only to be sold to the
ultimate purchasers in the master cartons, and no
intravenous sets were supposed to be taken out of the
master carton and sold separately. It was found that since
the master cartons were properly marked to indicate the
country of origin of the intravenous sets, the ultimate
purchaser would be advised of the country of origin, and,
therefore, the individual intravenous sets were excepted
from marking under 19 U.S.C. 1304(a)(3)(D) and 19 CFR
134.32(d). Furthermore the reference on the individual
pouches to the lot number for the country of origin was
determined to satisfy the marking requirements because the
ultimate purchasers would not be misled by the U.S. address
as the intravenous sets were only received in the properly
marked master carton and the lot code printed on the
individual pouches explained how to determine the country
of origin.
It is our opinion that, since T.D. 75-187 allows
commingled semiconductor devices of various origins to be
excepted from marking if they are packaged in properly
marked containers which indicate that the devices were made
in one or more countries, and this may also be applied to
devices repackaged for sale to ultimate purchasers, the
additional marking on the individual semiconductor devices
with an abbreviation, such as "Phil," or the use of an ISO
code will be acceptable provided the container itself is
marked with the proper country or countries of origin of
the devices and the markings on the individual devices does
not conflict with the container marking. As in HRL 735268,
where the intravenous pouches were excepted from marking
under 19 CFR 134.32(d) and a lot code pointed to the
country of origin in order to satisfy the requirements of
19 CFR 134.46 so that the ultimate purchaser was not misled
by the U.S. address, here the semiconductor devices are
also excepted from marking pursuant to T.D. 75-187.
Furthermore, in this case, as long as the individual
marking on the devices does not conflict with the container
marking, the ultimate purchaser would be able to discern
the actual country of origin, which is more than the
information required by T.D. 75-187. Accordingly, it is
our opinion that since the proposed abbreviations are not
the actual markings required for country of origin marking
purposes, unlike HRL 727843, these additional marking along
with proper container markings will satisfy the
requirements of T.D. 75-187 and 19 U.S.C. 1304.
II. Exception from Marking
In regard to the second issue, Intel seeks an
exception from marking the semiconductor devices and their
containers pursuant to 19 U.S.C. 1304(a)(3)(H) and 19
U.S.C. 1304(b). Pursuant to 19 U.S.C. 1304(b), neither the
article nor its container is required to be marked if the
exception provided in 19 U.S.C. 1304(a)(3)(H) is
applicable. Under 19 CFR 134.32((h), if the circumstances
of the importation or character of the articles is such
that the ultimate purchaser must necessarily know the
country of origin of the unmarked articles imported, then
the articles imported need not be marked.
Intel claims that its customers only need an
indication of the country of origin on semiconductor
devices or their containers, and that this indication need
not be the full English name or even an unmistakable
abbreviation of the country to convey origin information.
Rather, Intel suggests that semiconductor distributors only
need a bar code or eye-readable ISO code. Intel wishes to
use abbreviations, such as "Phil," or bar code or eye-readable ISO codes, on either the containers or devices in
place of marking semiconductor devices and containers with
the name of the country of origin. It is stated that the
codes or other abbreviations contemplated would not, by
themselves, qualify as country of origin markings under 19
U.S.C. 1304. However, under this procedure, Intel would
provide customers in advance with a key for deciphering the
codes or abbreviations. Intel also would continue giving
customers engaged in repacking operations a written
notification of marking pursuant to 19 CFR 134.26.
Accordingly, Intel contends that this procedure would
entitle it to an exception under 19 U.S.C. 1304(a)(3)(H)
and 19 CFR 134.32(h). U.S. Wolfson Bros. Corp. v. United
States, 52 Cust. Ct. 86, 91 (1964), is cited concerning the
court's suggestion that the "character of the articles"
required something about the articles themselves that
identified them with a particular country. The court
stated:
No contention is made that the character of these
tubes is such than an ultimate purchaser, without
marking, "must necessarily know the country of
origin." There seems little doubt that such a
contention could not be made. Indeed, Mr. John H.
Zink, Sr. witness for the plaintiff, testified that
fittings, such as those here involved, were imported
also from countries other than Scotland. (R.87) This
uncontradicted testimony would indicate that an
ultimate purchaser could not, absent marking,
"necessarily know" what the country of origin was.
We also note that the court stated that:
The clearest application of this [19 CFR 134.32(h)]
exemption is when the contract between the ultimate
purchaser in the [U.S.] and the supplier abroad
insures that the order will be filled only with
articles grown, manufactured, or produced in a named
country.
Indeed, Customs has ruled that under 19 CFR 134.32(h),
the "circumstances of importation" refers to a situation
where the importer is the ultimate purchaser of the
imported article and there is a direct contract with the
foreign supplier in which the supplier insures that the
order will be filled only with articles manufactured in a
named country. See HRL 730243 dated March 5, 1987. In
C.S.D. 80-144, Customs stated that a 19 CFR 134.32(h)
exception is only granted when there is a two party
one-step transaction between an importer and his foreign
supplier with the importer also being the ultimate
purchaser. In the present case, no evidence of such direct
contact between the ultimate purchaser, i.e., the OEMs or
distributors, and the foreign manufacturer has been
submitted.
Under Intel's proposal, it is suggested that the
attribute, feature or distinctive quality of the
semiconductors that would provide ultimate purchasers with
the name of the country of origin is the country
abbreviation or code on the device or container. While the
abbreviation or code may not meet Customs country of origin
marking requirements in another situation, Intel states
that these abbreviations or codes are part of the article
because they would be deployed in circumstances where
customers accept, use and, in some cases, even require it.
Moreover, Intel submits that customers would necessarily
know the origin represented by using the deciphering key.
Customs has held that it is not sufficient that the
ultimate purchaser be advised personally or by advertising
or brochures of an article's country of origin. See HRL
734121 dated August 12, 1991. Rather, an instance where an
ultimate purchaser would necessarily know the country of
origin from the character of an article would be when the
merchandise is only produced in one country, for example,
black diamonds from Brazil. See HRL 732362 dated May 26,
1989. In this case, the character of the semiconductor
devices does not indicate that they are only made in one
particular country. Rather, the ultimate purchaser will
only know the country of origin because of the bar code or
eye-readable code. However, under 19 CFR 134.32(h), no
marking is required. As held in HRL 727843, the use of
"Phil" was not an acceptable marking because it did not
unmistakably indicate the name of the country of origin
even if the ultimate purchaser knew that the Phillippines
was one of three or four common locations and the ultimate
purchaser would understand "Phil" to be the abbreviation
for Phillippines. Therefore, to the extent that a
deciphering key is required to know the country of origin,
19 CFR 134.32(h) is not applicable. Additionally, 19
U.S.C. 1304 specifically requires the country of origin to
be marked in the English language, which bar code or eye-readable markings do not satisfy.
HOLDING:
Based on the facts submitted, as long as the
semiconductor devices' container is properly marked with
the country or countries of origin of the devices, the
individual devices may be marked with abbreviations or ISO
codes provided these abbreviations or ISO codes are not in
conflict with the container marking.
An exception from marking under 19 U.S.C.
1304(a)(3)(H) and 19 U.S.C. 1304(b) is not authorized as
the circumstances of importation do not suggest any
evidence of direct contact between the ultimate purchaser
and the foreign supplier. Moreover, the character of the
semiconductor devices also does not indicate that they are
only made in one particular country absent the abbreviated
or code markings and the deciphering key.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered.
If the documents have been filed without a copy, this
ruling should be brought to the attention of the Customs
officer handling the transaction.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division