MAR-2-05 CO:R:C:V 734218 NL
District Director
U.S. Customs Service
Norfolk, VA 23510
RE: Further Review Protest No. 1401-91-100076; Country of Origin
Marking; Redelivery Notice; Agricultural Hand Tools (Forks
and Hooks); Substantial Transformation; Attachment of
Handles After Importation; Economically Prohibitive; 19
U.S.C. 1304(a)(3)(K); 19 CFR 134.32(o); Immediate Delivery;
HRL's 723857 & 734246.
Dear Sir:
This is in response to the request of the importer, True
Temper Hardware, for further review by Headquarters of the issues
raised in his protest against the issuance of a Notice of
Marking/Redelivery (CF 4647) for failure to mark certain
agricultural fork heads with their country of origin. We have
received a post-conference submission from counsel for the
importer dated December 27, 1991.
FACTS:
On February 26, 1991, entry was made at Norfolk for 32
crates of agricultural fork heads, manure hooks, and ensilage
forks, all products of Austria and having an entered value of
$182,500. The entry documents included a request on Customs Form
3461 for entry/immediate delivery in which the ultimate consignee
was designated as True Temper. This request was approved by
Customs on March 5, 1991. Also on March 5, 1991, the Norfolk
District issued a Notice of Marking/Redelivery to True Temper
stating that the articles were to be marked with their country of
origin. This notice was transmitted the same day to True
Temper's Customs broker in Norfolk and Baltimore. True Temper
was advised the same day of the Notice, although the date on
which the Notice was received by it may have been later.
On March 29, 1991, counsel for the importer advised the
Norfolk District that the merchandise had been delivered directly
to True Temper's customer, Ames Lawn & Garden Tools, and that by
the time True Temper received the Notice and contacted Ames the
goods were no longer in Ames' possession. Counsel advised that
accordingly, True Temper would be unable to comply with the
Notice of Marking/Redelivery.
Counsel submitted a second letter to the Norfolk District
dated April 10, 1991, elaborating on the previous letter and
requesting a waiver of the marking requirements in this case.
Counsel represented that: 1) The importer had taken immediate
action to assure that the Austrian manufacturer would not ship
unmarked merchandise; 2) Once it learned of the marking violation
it attempted to have the articles redelivered; 3) In six years of
shipments of these implements this was the first marking
violation; and 4) There were several grounds upon which to grant
an exception from marking.
Specifically, counsel claimed there was authority under
previous Customs rulings and court determinations for a finding
that the attachment of handles to the fork heads effects a
substantial transformation of the latter, such that the assembler
is the ultimate purchaser of the fork heads and they may be
excepted from country of origin marking pursuant to 19 CFR
134.32(h). The protest records do not indicate whether all the
fork heads were to have been sold with handles attached, but as
discussed below, this factor does not affect the ultimate
determination. Second, counsel contended that the practical
difficulties of retrieving the fork heads after they had been
distributed by Ames made them eligible for exception from marking
pursuant to 19 CFR 134.32(o) as "articles which cannot be marked
after importation except at an expense that would be
economically prohibitive".
The Norfolk District denied the importer's request for
exception from marking duties, stating that Ames was not the
ultimate purchaser of the fork heads. It issued a claim for
liquidated damages for failure to redeliver the forks on April
17, 1991, and the entry was liquidated with the addition of ten
percent marking duties on April 19, 1991. Pending resolution of
the instant protest against issuance of the CF 4647, action on
the claim for liquidated damages and a related protest against
liquidation of the marking duties have been held in abeyance.
ISSUE:
Is the protestant entitled to relief?
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 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.
Protestant has conceded that the agricultural fork heads
were not marked with their country of origin at the time of
importation, and that they had not been so marked at the time
they were sold in commerce after early release from Customs
custody. In protesting the issuance of the Notice of
Marking/Redelivery (CF 4647) the protestant asks that we consider
whether any exceptions from marking may have been applicable, and
to give weight to any equitable considerations thought relevant.
A presumption of correctness attaches generally to the
decisions of Customs officials. With respect to country of
origin marking, post-importation claims for exception are
disfavored. However, if the importer is unaware until it is
brought to his attention by Customs that, for example, his
foreign supplier has failed to satisfy U.S. requirements, it is
appropriate to consider such claims. We are unable in this case,
however, to agree that these articles were eligible to be
excepted. The CF 4647 was properly issued, and we find no basis
for its cancellation.
With regard to the claim that the articles are substantially
transformed after importation, such that Ames was the ultimate
purchaser of the articles, Customs has long since decided the
issue. In T.D. 55033(5)(January 14, 1960) it was held that
"Tools such as ensilage forks, hay forks, manure forks, rakes,
hoes, trowels, shovels, spades and scoops imported without
handles affixed ... must be legibly and conspicuously marked
'head made in (country of origin)' or 'blade made in (country of
origin)' as the case may be." Plainly, it is intended that the
marking remain on the implement after its handle has been
attached, such that the ultimate purchaser, the user of the
finished tool, may be apprised of the country of origin of its
essential component, its head, fork, or blade. See also HRL's
734246 (October 21, 1991); 732857 (December 1, 1988); 950005
(January 9, 1992) (attachment of wooden handles in the U.S. to
imported finished hammer heads is not a substantial
transformation).
In this case the fact that Ames Lawn and Garden Tools may
have been aware of the Austrian origin of the implements is of no
importance, since it was not, under prior Customs authority, the
ultimate purchaser of the articles under 19 CFR 134.32(h). We
are unable to agree that several Customs determinations cited by
the importer are on point. Specifically, we find that T.D. 67-
173 (July 24, 1967)(party who attaches domestic-origin handles to
imported fishing rods is the ultimate purchaser of the imported
articles) and various rulings on the assembly of golf club heads
and grips (ORR 824-70 (August 24 1970); HQ 732213 (July 3, 1985);
HQ 734136 (June 17, 1991); and HQ 724901 (April 9, 1984)) cannot
be regarded as compelling authority in light of a prior Treasury
Decision addressing the precise point.
We agree that the cost to the importer of retrieving the
articles from retail distributors for marking after importation
would have been high, and that retrieval likely was a practical
impossibility. We do not agree however, that an exception from
marking under 19 CFR 134.32(o) is warranted. The key factor
which made retrieval for marking impossible was that the
importer's broker applied, in accordance with Subpart C, Part
142, Customs Regulations (19 CFR 142.21 et seq.), for immediate
delivery of the articles at the time of importation. It
apparently suited the importer's convenience to secure immediate
delivery, but under the Basic Importation and Entry Bond
Conditions of 19 CFR 113.61 et seq. the importer had agreed to
pay duties, including marking duties, and specifically, to
redeliver merchandise which must be marked with its country of
origin. Customs issued its demand for redelivery within the 30-
day period specified at 19 CFR 113.62(d), and the importer was
obligated under the bond to hold the merchandise available for
redelivery and remarking during that period. We find here that
the risk that the articles were unmarked at importation, and that
their immediate delivery to their consignee would make redelivery
and marking a practical impossibility, was assumed by the
importer.
The applicable exception from marking, 19 U.S.C.
1304(a)(3)(K), which is found in the Customs Regulations at 19
CFR 134.32(o), provides that an article may be excepted from
marking if it cannot be marked after importation except at an
expense that would be economically prohibitive unless the
importer, producer, producer, seller, or shipper failed to mark
the goods before importation to avoid meeting the requirements of
the law (19 U.S.C. 1304). While we recognize that there was no
intent to avoid meeting the marking requirements, and appreciate
that the importer has taken steps to avoid a recurrence, in our
opinion this exception under the circumstances cannot be
approved. To do otherwise would provide an incentive for
importers to dispose of goods as quickly as possible, and then to
claim that redelivery and re-marking are economically prohibitive
within the meaning of 19 U.S.C. 1304(a)(3)(K) and 19 CFR
134.32(o). If Customs has timely issued a notice of redelivery,
the expense of securing redelivery of articles released under a
permit for immediate delivery may not be considered in
determining whether marking articles after importation is
economically prohibitive under this exception.
HOLDING:
You are directed to deny this protest. Neither the importer
or its customer is the ultimate purchaser of the imported
articles, and the fork heads and other implements were subject to
country of origin marking both at the time of importation and
after processing in the U.S. We cannot find that marking after
importation is economically prohibitive when the importer has
chosen to take immediate delivery and is then unable to redeliver
the articles for marking. The decision of Customs officials at
Norfolk to deny exceptions from marking and demand redelivery is
fully supported by the record and is in accordance with
applicable law and Customs Regulations.
A copy of this decision should be attached to the Customs
Form 19 and mailed to the protestant as part of the notice of
action on the protest.
Sincerely,
John Durant
Director, Commercial
Rulings Division