MAR-2-05 CO:R:C:V 733566 RSD
Steven W. Baker, Esquire
100 California Street, Suite 670
San Francisco, California 94111
Re: Country of origin marking of imported bulk sanitary paper
products and liquid hand cleaner. Ultimate purchaser; 19
U.S.C. 1304(a)(3)(D); 19 CFR 134.32(d); 19 CFR 134.1(d);
Friedlaender & Co.; Koru North America; 79-0382; 733678
Dear Mr. Baker:
This is in reply to your letter dated May 31, 1990, on
behalf of your client, Molnlycke, Inc., in which you request a
ruling on the proper country of origin marking of paper hand
towels, toilet paper, tissues and similar products classified in
heading 4818 of the Harmonized Tariff Schedule of the United
States (HTSUS), and liquid hand cleaner classified under heading
3402, HTSUS.
FACTS:
Your client imports unmarked paper hand towels, toilet
paper, tissues and similar products, and liquid hand cleaner.
The products are imported in master cartons or plastic
packaging, all of which are marked with the country of origin of
the contents. The products are for use in the industrial market,
and are sold by your client to wholesale suppliers who sell them
to institutions, factories and similar bulk end users. Your
client sells the products to its distributing customers always
and only in the original unopened and properly marked containers
in which they are imported. In turn, you advise us that the
wholesale distributors "almost exclusively" sell the products in
their imported condition, i.e., in the original unopened and
properly marked containers in which they are imported. Your
client wishes to file with each entry a certification indicating
that the goods will be sold to end users only in the bulk, marked
containers. It wishes further to advise its customers that
resales by them must similarly be in the marked containers, or,
in the rare instances where a distributor is required to break
open the bulk containers, that the individual rolls or packages
will be properly marked with the country of origin of the
product. You have submitted exemplars of the statements that
your client wishes to use, and request a ruling on such a
procedure.
In an additional submission, dated April 23, 1991,
Molnlycke states that the cartons are the smallest shipping units
used by the importer and that the individual rolls of towels or
tissues contained inside these cartons are not individually
wrapped. Molnlycke also states that the rolls are designed to be
used with a proprietary dispenser which it sells to their
customers. The paper products must be used with this dispenser
specifically designed for them and would have no use without the
dispenser. Because its products could not be used without the
proprietary dispensers, Molnlycke contends that in the rare
instances when a distributor or customer needs less than carton
size quantities of a product, these sales would only be to those
customers who had previously purchased the product. Since these
customers had previously received the product in cartons marked
to indicate the country of origin of its contents, they would
know the country of origin of the product from seeing the
marking on the cartons of their previous purchases. It is
further claimed that since the ultimate customer always unpacks
the cartons and installs the rolls in the dispenser, he is
necessarily aware of the country of origin from the carton
packing. Molnlycke indicates that the country of origin of its
products do not change in that the same products always come from
the same country and do not vary from shipment to shipment.
ISSUE:
Can the country of origin marking requirements be satisfied
by marking the master cartons with the country of origin of their
contents rather than marking the articles?
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. The Court of
International Trade stated in Koru North America v. United
States, 701 F.Supp. 229, 12 CIT _____ (CIT 1988), that: "In
ascertaining what constitutes the country of origin under the
marking statute, a court must look at the sense in which the term
is used in the statute, giving reference to the purpose of the
particular legislation involved. The purpose of the marking
statute is outlined in United States v. Friedlaender & Co., 27
CCPA 297 at 302, C.A.D. 104 (1940), where the court stated that:
"Congress intended 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."
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 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. If an imported article is to be sold at
retail in its imported form, the purchaser at retail is the
ultimate purchaser.
In this case, the distributors purchase unmarked paper hand
towels, toilet paper, tissues and similar products, and liquid
hand cleaner from you in their imported form for resale. We
find, therefore, that the distributors are not the ultimate
purchasers of the imported articles. cf HQ 733678 (August 30,
1990), hospitals and hospital supply distributors were the
ultimate purchasers of imported surgical towels purchased by them
for their own use. The ultimate purchasers are those companies
that purchase the product for their own use.
Pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d),
imported articles are excepted from individual marking
requirements if the marking of the containers will reasonably
indicate the origin of the articles. This exception applies in
cases where the article is imported in a properly marked
container and Customs officials at the port of entry are
satisfied that in all foreseeable circumstances the ultimate
purchaser will receive the article in its original, unopened and
properly marked container. Accord, Legal Determination 79-0382
(July 17, 1979) and HQ 733678, supra. In this case, you state
that the unmarked paper hand towels, toilet paper, tissues and
similar products, and liquid hand cleaner are sold to the
distributors in their original, unopened and properly marked
containers. Because the distributors are not the ultimate
purchasers, the question remains whether the product will remain
in the master carton until they are received by the ultimate
purchaser.
In HQ 733016, January 11, 1990, affirmed in HQ 733109,
February 26, 1990, Customs determined that in the case of
imported shrimp sold through distributors to restaurants, the
individual packages of shrimp had to be marked unless the
distributors would furnish a statement that it is their usual
practice to sell their product to restaurants in the master
cartons, and that in the event it is not distributed in this
manner, the package in which it is sold will be marked with the
country of origin. In that case, because Customs had no control
over the distributors inside the U.S., and because the unmarked
packages of shrimp could easily be removed from the master
cartons and sold directly to restaurants, it was concluded that
this step was necessary to ensure that the shrimp would always
reach the ultimate purchaser in the marked master cartons.
However, unlike the shrimp which was imported in individual
packages in a master carton, the individual rolls of paper inside
the master cartons are unwrapped. This indicates that the
products are intended to be sold in the master cartons and they
will reach the ultimate purchasers in this manner.
We also note that because the paper products are not
individually wrapped, requiring each roll to be marked would
cause a great deal of difficulty. In the rare instances when an
ultimate purchaser needs less than a carton size quantity of the
product, the importer has indicated that the ultimate purchasers
of the products would have previously have had to receive the
product in a properly marked container because only their
products are designed to fit the special proprietary dispensers.
Therefore, the ultimate purchaser would have had to purchase the
product previously and would have seen the properly marked carton
and would know the country of origin of the product. The
importer has also indicated that the country of origin of each
product does not change, and that the same product always comes
from the same country. Based on the above considerations, we
find that the marking of the master cartons or plastic packaging
will reasonably indicate the country of origin. As long as the
proposed certification and notice procedures are followed, the
paper articles may be excepted from individual country of origin
marking under 19 CFR 134.32(d).
However, with respect to the liquid hand cleaner, you have
not provided us with enough information on how it is sold for us
to determine if would be also excepted from country of origin
marking based 19 CFR 134.32(d). If it can be established to the
satisfaction of Customs officials at the port of entry that the
liquid hand cleaner will reach the ultimate purchasers in
properly marked unopened cartons then the 19 CFR 134.32 (d)
exception would apply.
HOLDING:
Unmarked paper hand towels, toilet paper, tissues and
similar products, imported in master cartons or plastic packaging
may be excepted from individual country of origin marking
pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d),
provided that they are imported in a properly marked container
and they will be used and sold only in the manner described
above. To cover those few instances in which imported paper
products will be removed from the marked containers in which they
are imported, the certification and notice procedure you have
proposed must be utilized.
Sincerely,
John Durant, Director
Commercial Rulings Division