Mar-2-05 CO:R:C:S 735447 AT
Mr. Jack Flynn
Rudolph Miles & Sons, Inc.
4950 Gateway East
P.O. box 11057
El Paso, Texas 79983
RE: Country of origin marking requirements for packaged
flashlight bulbs from
Mexico; Article 509; NAFTA Marking Rules; section 134.1(d)
of the interim
regulations; section 102.11(a) and (b) of the interim
regulations; section 102.20
of the interim regulations; section 102.14 of the interim
regulations
Dear Mr. Flynn:
This is in response to your letter dated December 1, 1993,
on behalf of BRK Electronics ("BRK"), requesting a ruling on the
country of origin marking requirements for flashlight bulbs
imported from Mexico to be distributed and sold in the U.S.
Sample flashlight bulbs and their retail containers were
submitted for review. We regret the delay in responding.
FACTS:
According to your submission, BRK intends to import
flashlight bulbs from Mexico into the U.S. for retail sale. The
flashlight bulbs are manufactured in Japan, China and the U.S.,
and prior to importation, are repackaged into retail containers
in Mexico. You state that approximately 75 percent of the bulbs
will be produced in Japan, 10 percent in China and 15 percent in
the U.S. The flashlight bulbs themselves are marked with their country of origin on the metal
portion of the bulb in lettering approximately 3 points (a point
is a unit of measurement approximately equal to 0.01384 inches or
nearly 1/72 inches). The country of origin marking cannot be
easily seen through the retail container.
You contend that because of anticipated fluctuations in
supply from the various manufacturers in the three countries, and
because of a commingling inventory system and other variables, it
would be extremely difficult, if not impossible, to correctly and
individually separate, segregate and mark the bulbs and the
retail containers prior to packaging. For control purposes and
cost effectiveness, a single, all-purpose retail package,
including a single country of origin marking is preferred. Based
upon these considerations, you have requested whether the
proposed marking "Bulb Made in Japan, China or the United States"
is an acceptable country of origin marking for the imported
flashlight bulbs.
ISSUE:
What are the country of origin marking requirements for
imported flashlight bulbs manufactured in Japan, China and the
U.S., that are repackaged in Mexico into retail containers for
sale in the U.S.?
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. Part 134, Customs Regulations (19 CFR Part 134)
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a "good of a
NAFTA country" are also determined in accordance with Annex 311
of the North American Free Trade Agreement ("NAFTA"), as
implemented by section 207 of the North American Free Trade
Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057)
(December 8, 1993) and the interim amendments to the Customs
Regulations published as T.D. 94-4 (59 Fed. Reg. 109, January 3,
1994) with corrections (59 Fed. Reg. 5082, February 3, 1994) and
T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993). These interim
amendments took effect on January 1, 1994, to coincide with the
effective date of the NAFTA. The Marking Rules used for
determining whether a good is a good of a NAFTA country are
contained in T.D. 94-4 (adding a new Part 102, Customs
Regulations). The marking requirements of these goods are set
forth in T.D. 94-1 (interim amendments to various provisions of
Part 134, Customs Regulations). Section 134.1(b) of the interim regulations, 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 this
part; however, for a
good of a NAFTA country, the NAFTA Marking Rules will
determine the
country of origin. (Emphasis added).
Section 134.1(j) of the interim regulations, provides that
the "NAFTA Marking Rules" are the rules promulgated for purposes
of determining whether a good is a good of a NAFTA country.
Section 134.1(g) of the interim regulations, defines a "good of a
NAFTA country" as an article for which the country of origin is
Canada, Mexico or the United States as determined under the NAFTA
Marking Rules. Section 134.45(a)(2) of the interim regulations,
provides that a "good of a NAFTA country" may be marked with the
name of the country of origin in English, French or Spanish.
In this case, flashlight bulbs which are manufactured in
Japan, China and the U.S., are repackaged into retail containers
in Mexico. Thus, in order to determine the appropriate marking
requirements for the imported flashlight bulbs we must determine
under the NAFTA Marking Rules the country of origin of the
repackaged bulbs imported from Mexico.
Part 102 of the interim regulations, sets forth the "NAFTA
Marking Rules" for purposes of determining whether a good is a
good of a NAFTA country for marking purposes. Section 102.11 of
the interim regulations, sets forth the required hierarchy for
determining country of origin for marking purposes. Section
102.11(a) of the interim regulations states that "[t]he country
of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that good
undergoes an applicable
change in tariff classification set out in section
102.20 and satisfies any
other applicable requirements of that section, and
all other requirements
of these rules are satisfied."
"Foreign Material" is defined in section 102.1(e) of the interim
regulations as "a material whose country of origin as determined
under these rules is not the same country as the country in which
the good is produced." Since the flashlight bulbs are produced in Japan, China and
the U.S. (foreign as defined in section 102.1(e) of the interim
regulations) the bulbs are neither wholly obtained/produced nor
produced exclusively from domestic materials. Therefore,
paragraphs (a)(1) and (a)(2) of section 102.11 cannot be used to
determine the country of origin of the repackaged bulbs. Thus,
paragraph (a)(3) of section 102.11 is the applicable rule that
next must be applied to determine the origin of the finished
article.
The flashlight bulbs are classified under subheading
8539.20, HTSUS. The repackaged flashlight bulbs are classified
in the same subheading. The applicable change in tariff
classification set out in section 102.20(p), Section XVI,
Chapters 84 through 85, 8539.10-8539.40 of the interim
regulations provides:
8539.10-8539.40 .... A change to subheading 8539.10
through 8539.40 from
any other subheading,
including another subheading
within that group.
In this case, since the foreign flashlight bulbs (Japan,
China and U.S.) are classified under subheading 8539.20 HTSUS
both before and after the repacking operations in Mexico, they do
not undergo the applicable change in tariff classification set
out in section 102.20(p), and, as a result, section 102.11(b) of
the hierarchial rules must be applied next to determine the
country of origin of the repackaged flashlight bulbs.
Section 102.11(b) of the interim regulations provides that:
Except for a good that is specifically described in the
Harmonized System as
a set, or is classified as a set pursuant to General Rule
of Interpretation 3,
where the country of origin cannot be determined under
paragraph (a), the
country of origin of the good:
(1) Is the country or countries of origin of the
single material that imparts
the essential character of the good, or
(2) If the material that imparts the essential
character of the good is
fungible, has been commingled, and direct
physical identification of
the origin of the commingled material is not
practical, the country or
countries of origin may be determined on the
basis of an inventory
management method provided under the Appendix to
part 181 of the
Customs Regulations.
Applying section 102.11(b)(1) to the facts of this case, we
find that the single material that imparts the essential
character of the repackaged flashlight bulbs is the foreign
origin flashlight bulbs from Japan, China and the U.S.
Therefore, pursuant to section 102.11(b)(1), the country of
origin of the repackaged flashlight bulbs for marking purposes is
Japan, China and the U.S. (We note that provided the conditions
set forth in section 102.11(b)(2) are satisfied, BRK may use an
inventory management method prescribed in (b)(2) to determine the
country or countries of origin of the repackaged flashlight
bulbs).
However, with respect to the U.S. origin repackaged
flashlight bulbs, section 102.14 of the interim regulations
provides in pertinent part that
no good, last advanced in value or improved in
condition outside the United
States has United States origin. If under any other
provisions of this part
such a good is determined to be a good of the United
States, that
determination will be disregarded and the country of
origin of the good will
be the last foreign country in which the good was
advanced in value or
improved in condition. (Emphasis added).
"Advanced in value" is defined in section 102.1(a) as "an
increase in the value of a good as a result of production with
respect to that good, other than by means of those "minor
processing" operations described in paragraphs (m)(5), (m)(6) and
(m)(7) of this section". "Improved in Condition" is defined in
section 102.1(i) as "the enhancement of the physical condition of
a good as a result of production with respect to that good, other
than by means of those "minor processing" operations described in
paragraphs (m)(5), (m)(6) and (m)(7) of this section". The minor
processing operations described in paragraphs (m)(5), (m)(6) and
(m)(7) of section 102.1, include unloading, reloading or any
other operation necessary to maintain the good in good condition;
putting up in measured doses, packing, repacking, packaging,
repackaging; and testing, marking, sorting or grading.
In this case, we find that the U.S. origin repackaged
flashlight bulbs are not advanced in value or improved in
condition as a result of the repackaging operation performed in
Mexico since the repackaging operation is considered to be minor
processing as defined in paragraphs (m)(5), (m)(6) and (m)(7) of
section 102.1. Accordingly, pursuant to section 102.14, the
country of origin of the U.S. origin repackaged flashlight bulbs
is the U.S. for purposes of the country of origin marking
requirements of 19 U.S.C. 1304.
Since the origin of the repackaged flashlight bulbs imported
from Mexico can be either Japan, China or the U.S., or a
combination of bulbs from all three countries depending upon the
circumstances, the next question which must be addressed is
whether it is acceptable to mark the retail container in which
the flashlight bulbs are repackaged with the proposed phrase
"Bulb Made in Japan, China or the United States". The proposed
marking must reasonably indicate to the ultimate purchaser of the
flashlight bulbs the origin(s) of such article in order for it to
be an acceptable country of origin marking under 19 U.S.C. 1304. In C.S.D. 89-111, Customs considered whether a country of
origin marking which designated two countries in the alternative
(either/or) as the country of origin of the imported article was
sufficient to satisfy the requirements of 19 U.S.C. 1304 and
found that alternative marking was deficient for the reason that
it did not clearly indicate the actual country of origin. See
also, HQ 734011 (May 14, 1991) (alternative marking of brass
hardware and plumbing kits, etc., stated in terms such as "one or
more" or "and/or" does not generally afford ultimate purchasers
the specific indication of the actual country of origin required
by 19 U.S.C. 1304).
Similarly, in this case, we find that the proposed marking
"Bulb Made in Japan, China or the United States" does not clearly
indicate the actual country of origin of the flashlight bulbs to
the ultimate purchaser as required by 19 U.S.C. 1304.
Accordingly, the proposed marking "Bulb Made in Japan, China or
the United States" is not an acceptable country of origin marking
for the imported flashlight bulbs.
HOLDING:
Pursuant to section 102.11(b)(1) and 102 .14, of the interim
regulations amendments to the Customs Regulations, the country of
origin of the repackaged flashlight bulbs imported from Mexico is
the country where the bulbs are manufactured -- either Japan,
China or the U.S. Marking the repackaged containers with the
proposed marking "Bulbs Made in Japan, China or the U.S." is not
an acceptable country of origin marking for the imported
flashlight bulbs.
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is 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
Commercial Rulings Division