Country of origin marking for flatware; chinaware; container marking; samples; 19 CFR 134.32(d)

HQ W559398 October 25, 1995 MAR-2-05 R:C:S W559398 MLR CATEGORY: Marking Marilyn-Joy Cerny, Esq. Global Customs & Trade Specialists 427 Little Britain Road New Windsor, NY 12553 RE: Country of origin marking for flatware; chinaware; container marking; samples; 19 CFR 134.32(d) Dear Ms. Cerny: This is in reference to your letter of August 22, 1995, requesting a ruling on behalf of Seneca-Delco Corporation (“Seneca”), concerning the country of origin marking requirements for imported flatware and chinaware. Brochures of the flatware and chinaware were submitted with your request. FACTS: It is stated that Seneca imports flatware and chinaware (which includes plates, cups, saucers, mugs, bowls, and accessory items such as sugar bowls, creamers, platters, vases, and ashtrays) exclusively for institutional use, such as restaurants, hotels, airlines, nursing homes, and hospitals. It is also stated that this merchandise is never bought in sets for household use, and that it is never sold at the retail level. One of the brochures indicates that the flatware is “durable enough to withstand the vigor of commercial use.” It is also stated that the chinaware is specifically designed for institutional use because it is much thicker and heavier than household chinaware so that it can withstand constant use at the various food service institutions. Seneca sells the imported merchandise either directly to institutional customers or to distributors, such as restaurant supply companies, who sell the merchandise exclusively to food service institutions. It is stated that the flatware is packaged overseas in immediate containers holding one dozen individual utensils of the same type. The immediate containers are then packaged overseas in master shipping cartons holding multiple dozens (usually 30-50 dozen) of the same type of utensils. Both the immediate containers and master shipping cartons are marked with the country of origin. After importation, Seneca ships the flatware to its customers or distributors. In rare instances, Seneca opens the outermost shipping container to fulfill orders requiring less than a full container. However, it is stated that the immediate containers are never opened because Seneca does not sell its utensils in quantities of less than one dozen. In these instances, Seneca states that it will prepare a certification that the repacked merchandise will reach the ultimate purchaser in properly marked containers. The imported chinaware is also shipped in containers holding dozens of single items such as cups, plates, or bowls. The containers are sealed and marked with the country of origin. Unlike the flatware, the chinaware cartons are never opened in order to fulfill orders requiring less than one carton. In addition, some of the flatware and chinaware may be imported and shown to prospective buyers. It is stated that these articles will not be sold, distributed or given away to U.S. companies. ISSUE: Whether the flatware and chinaware may be excepted from individual country of origin marking. 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. Section 134.1(d), Customs Regulations, defines "ultimate purchaser" as generally the last person in the U.S. who will receive the article in the form in which it was imported. It is contended that the institutional buyers are the ultimate purchasers of the flatware and chinaware, and since this merchandise will be received by the institutional buyers in properly marked containers, the flatware and chinaware are not required to be individually marked. Pursuant to 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d), an exception from individual marking is applicable where the marking of a container of such article will reasonably indicate the origin of the article. This exception is normally applied in cases where the article is imported in a properly marked container and Customs officials at the port of entry are satisfied that the ultimate purchaser will receive it in the original unopened marked container. Relevant factors regarding whether an article is likely to remain in its original container include the chain of distribution, the type of container, and the nature of the article. Special marking requirements for knives and forks are set forth at 19 CFR 134.43(a), which require them to be marked by means of die stamping, castinmold lettering, etching, engraving, or by affixing metal plates to the article. However, these requirements have been construed to be subject to the general exception from individual country of origin marking provided at 19 U.S.C. 1304(a)(3)(D), if the marking of the container will reasonably indicate its country of origin. See Headquarters Ruling Letter (HRL) 734154 dated August 19, 1991. The facts of this case are similar to HRL 734154, where Customs excepted stainless steel flatware from individual country of origin marking because the flatware was sold to hotels, restaurants, and institutions, and not at retail outlets. The utensils were also packed in immediate marked containers that held three dozen of the same type of utensil. The master shipping cartons holding twelve immediate containers were also marked. For orders requiring more than three dozen, the importer also opened the immediate container and packed the extra dozen pieces separately in containers marked with the country of origin. Customs held that since there were no retail purchasers and all of the imported flatware was packed or repacked in properly marked bulk containers, the flatware was excepted from individual country of origin marking provided the importer satisfied any additional requirements that the district director might determine necessary to ensure that the repacked goods were properly marked. In HRL 710493 dated July 17, 1979, Customs considered dinnerware imported and sold by the importer to a company that resold it to an airline company for its use in serving in-flight meals. The airline company received the dinnerware in the original, unopened, and properly marked bulk container. Customs held that the ultimate purchaser was the airline company, not the airline passengers, and, therefore, the dinnerware was excepted from individual country of origin marking because the airline received the dinnerware in properly marked bulk containers. See also HRL 734532 dated December 1, 1992 (imported glassware was excepted from individual marking requirements because the institutional buyers received the glassware in sealed boxes marked with the country of origin of the glassware). In this case, as in HRL 734154 and 710493, it is stated that the flatware and chinaware will only be sold to institutional users either directly or through distributors who sell to institutional users. Therefore, since the institutional users are the ultimate purchasers of the flatware and chinaware, these articles may be excepted from individual country of origin marking pursuant to 19 CFR 134.32(d) as long as Customs officials at the port of entry are satisfied that the ultimate purchasers receive the flatware and chinaware in the original unopened properly marked outer container. Furthermore, if Seneca opens the boxes, and adds or removes some items from the containers, the requirements of 19 CFR 134.26 must be satisfied. Section 134.26, Customs Regulations (19 CFR 134.26), as amended by T.D. 95-78, published in the Federal Register, September 27, 1995 (60 FR 50020), provides in pertinent part that: If an imported article subject to these requirements is intended to be repackaged in retail containers (e.g. blister packs) after its release from Customs custody, or if the port director having custody of the article, has reason to believe that such article will be repacked after its release, the importer shall certify to the port director that: (1) If the importer does the repacking, he shall not obscure or conceal the country of origin marking appearing on the article, or else the new container shall be marked to indicate the country of origin of the article in accordance with the requirements of this part . . . . Accordingly, for those instances where Seneca adds or removes flatware from the containers, Seneca must comply with the certification requirements that the outer container in which the flatware is repacked will be marked with the country of origin of the flatware. In regard to the flatware and chinaware that will be shown to prospective buyers, and which will not be sold, distributed, or given away, in HRL 732082 dated March 14, 1989, Customs held that imported samples used by the importer exclusively for the solicitation of orders for foreign merchandise, and not to be sold or given away were excepted from marking pursuant to 19 CFR 134.32(d) because the prospective purchasers were not the ultimate purchasers since they did not receive the imported merchandise. Rather, the ultimate purchaser was the importer because the importer used the samples to solicit orders. Similarly, in this case, if the imported flatware and chinaware are only used as samples to solicit orders from prospective buyers, the flatware and chinaware may be excepted from marking pursuant to 19 CFR 134.32(d) since Seneca, the importer, is the ultimate purchaser, and Seneca will receive the flatware and chinaware in properly marked containers. HOLDING: Based on the facts presented, the institutional users are the ultimate purchasers of the imported flatware and chinaware. Therefore, the flatware and chinaware may be excepted from individual country of origin marking pursuant to 19 CFR 134.32(d) as long as Customs officials at the port of entry are satisfied that the ultimate purchasers receive the flatware and chinaware in the original unopened outer container. If Seneca opens the boxes, and adds or removes some items from the containers, the requirements of 19 CFR 134.26 must be satisfied. The flatware and chinaware are also excepted from marking pursuant to 19 CFR 134.32(d) if they are only used as samples to solicit orders from prospective buyers, since Seneca, the importer, is the ultimate purchaser, and Seneca will receive the flatware and chinaware in properly marked containers. 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