Application for Further Review of Protest No. 5501-00-100249; Country of Origin Marking; Poker Chips; 19 CFR 134.26 and 134.34; repacking

HQ W561830 July 19, 2001 MAR2-05 RR:CR:SM W561830 MLR CATEGORY: Marking Port Director U.S. Customs Service P.O. Box 619050 DFW Airport, TX 75261 RE: Application for Further Review of Protest No. 5501-00-100249; Country of Origin Marking; Poker Chips; 19 CFR 134.26 and 134.34; repacking Dear Sir: This is in reference to the above-referenced protest and application for further review filed by Hillis Investments, Inc. (“Hillis”), requesting cancellation of a Notice to Remark and/or Redeliver for certain game pieces. FACTS: The articles at issue are various game pieces (chess and checker pieces) imported from Taiwan, and entered on May 5, 2000. The protest was timely filed on June 12, 2000. Your office states that the shipping cartons containing the imported game pieces were marked “Made in Taiwan.” In each shipping carton, there were numerous plastic bags filled with either checker or chess game pieces. The plastic bags and individual game pieces were not marked. On May 10, 2000, a Notice to Mark was issued. On May 9, 2000, the importer faxed a statement to his Customs broker that the game pieces are going to one customer, and that the importer will advise his customer that the new packaging must be labeled with the country of origin of the game pieces. On May 12, 2000, the broker faxed a letter to your office requesting a “waiver of marking under section 134.34.” The broker’s letter states that: The shipment of checker and chess pieces will be repacked into a specialized chess checker game. These items will be sold by the importer to one customer. The game box they will be repacked into will indicate the country of origin of the articles to an ultimate purchaser in the United States. Attached to the letter was a certification dated May 11, 2000, signed by the importer and purchaser of the articles, stating that the new packaging for the game pieces will be marked “Made in Taiwan.” Your office states that the “marking waiver request” was denied because the importer did not obtain approval from the port director under 19 CFR 134.34 prior to the arrival of the goods. Furthermore, your office states that the certification and notice in 19 CFR 134.26 were not provided. ISSUE: Whether the repackaging procedures of 19 CFR 134.26 or 134.34 may be followed. 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. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. “Ultimate Purchaser” is defined as generally the last person in the U.S. who will receive the article in the form in which it is imported. 19 CFR 134.1(d). In this case, protestant claims that its customer would mark the game box to indicate the country of origin of the game pieces. Therefore, in this case it is assumed that the ultimate purchaser will be those persons who purchase the goods from the protestant's customers. Unless otherwise excepted, the goods must be marked to indicate the country of origin to these purchasers. Articles for which the containers will reasonably indicate the country of origin are excepted from marking under 19 U.S.C. 1304(a)(3)(D). For an exception to be granted under 19 U.S.C. 1304(a)(3)(D), the article must generally be imported in the container and that container must generally reach the ultimate purchaser unopened. See also 19 CFR 134.32(d). Pursuant to 19 CFR 134.34(a), however, an exception may be authorized in the discretion of the port director under 19 CFR 134.32(d) for imported articles which are to be repacked after release from Customs custody under the following conditions: (1) The containers in which the articles are repacked will indicate the country of origin of the articles to an ultimate purchaser in the U.S. (2) The importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense or secures such verification, as may be necessary, by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry. Section 134.26 of the Customs Regulations (19 CFR 134.26), provides, in pertinent part: Certification requirements. If an article subject to these requirements is intended to be repacked in retail containers (e.g., blister packs) after its release from Customs custody, or if the district director having custody of the article, has reason to believe such article will be repacked after its release, the importer shall certify to the district director that: … (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer shall notify such purchaser or transferee, in writing, at the time of sale or transfer, that any repacking of the article must conform to these requirements. It is important to note that the procedures set forth at 19 CFR 134.26 apply only to articles which are legally marked at the time of importation. If the articles are not legally marked at the time of importation, the presentation to Customs of the certification and notice to subsequent purchasers or repackers specified in 19 CFR 134.26 will not serve to satisfy the importer's obligations under 19 U.S.C. 1304 and Part 134, Customs Regulations (19 CFR Part 134). In determining whether the imported articles are legally marked, however, we point out that an article otherwise subject to individual marking may be excepted from this requirement where its container will reasonably indicate the country of origin, pursuant to 19 CFR 134.32(d). Therefore, where the outermost container of the game pieces to be repacked in the U.S. is correctly marked with the country of origin of the articles contained within, the certification procedures of 19 CFR 134.26 may be utilized, provided that the containers in which the repackaged spare parts will reach the retail purchaser will be marked in accordance with the requirements of 19 U.S.C. 1304 and 19 CFR Part 134. However, individually unmarked articles whose outermost container is also unmarked are not included within the scope of 19 CFR 134.26. In such instances, the separate procedures of 19 CFR 134.34 may be available. Under this provision, an exception from individual country of origin marking may be authorized in the discretion of the port director pursuant to 19 CFR 134.32(d), provided that the articles are repacked after importation under the supervision of the port director such that the marking on the new containers will indicate the country of origin of the articles to their ultimate purchasers. Thus, although the requirements for exception from marking are not satisfied at importation, they are met after repacking under Customs supervision in the United States. The port director retains broad discretion concerning whether the exception should be granted, and, if so, the type of supervision required, which may include direct inspection, the submission of verifications or samples, or such other demonstration of compliance as the port director may require. It is noted that the port director may, under the authority of 19 CFR 134.34, require an importer to provide certification that new containers will be marked in accordance with Part 134; such certification may contain the same language as that set forth at 19 CFR 134.25 and 19 CFR 134.26. In cases in which the importer is not the repacker, the port director may require such assurances as he/she deems necessary to assure that others will repack the articles in such a manner as to satisfy all the requirements of 19 U.S.C. 1304 and Part 134, Customs Regulations. In Headquarters Ruling Letter (HRL) 561225 dated April 9, 1999, Customs held that where parts are repacked after release from Customs custody, and neither the parts nor the container in which they are imported are properly marked, 19 CFR 134.32(d) will be applicable provided the containers in which they are repacked are properly marked and the exception is authorized by the port director pursuant to 19 CFR 134.34(a). If the article or its container is properly marked upon importation and the goods are repacked, the importer must comply with the certification requirements of 19 CFR 134.26. See also HRL 560399 dated March 14, 1998 (since domestic processing would obliterate any country of origin marking on the castings at the time of importation, it was held that where the outermost container in which the castings were imported into the U.S. was marked with the country of origin of the castings, the imported castings could be excepted from individual marking at the time of importation, provided that the certification set forth in section 134.26 was executed and the containers in which the finished pump parts reach the ultimate purchaser were marked); and HRL 561269 dated February 29, 2000 (the procedures of section 134.26 apply only to articles which are legally marked at the time of importation. If the articles are not legally marked at the time of importation, the presentation to Customs of the certification and notice to subsequent purchasers or repackers in section 134.26 will not serve to satisfy the marking statute requirements. In determining whether imported articles are legally marked, an article otherwise subject to individual marking may be excepted from this requirement where its container will reasonably indicate the country of origin, pursuant to 19 CFR 134.32(d). Therefore, where the outermost container of the parts to be repacked in the U.S. is correctly marked with the country of origin of the articles container therein, the certification procedures of 19 CFR 134.26 may be utilized, provided that the containers in which the repacked spare parts will reach the retail purchaser will be marked in accordance with the marking statute). In this case, the broker sent a letter to Customs on May 12, 2000, after the issuance of the Notice of Mark and Redeliver on May 10, 2000, requesting a “waiver of marking under section 134.34” since the games pieces would be repacked into a specialized chess checker game, the pieces would only be sold to one customer, and the game box would indicate the origin of the game pieces. A statement dated May 11, 2000, was attached to the broker’s request, with a certification signed by the importer of the articles, and the purchaser and subsequent repacker of the articles that the “new container that will package the imported articles, (chess game pieces and checker game pieces), along with additional articles, will be marked showing the game pieces country of origin, “Made in Taiwan.” At the time of importation, your office indicates that an inspector’s examination of the game pieces revealed that the shipping cartons were marked “Made in Taiwan.” Accordingly, it appears that the container of the game pieces was properly marked at the time of importation. Therefore, since the containers were marked with the country of origin at the time of importation, the procedures of 19 CFR 134.26 could have been followed. Your office states that the certification of section 134.26 was not provided. We disagree. The Notice to Mark and or Redeliver requires that the merchandise be brought into compliance within 30 days of the notice. The notice was issued on May 10, 2000. The letter from the broker with the attached certification indicating that the games pieces would be marked in properly marked containers was provided to your office on May 12, 2000. Your office indicates that the company name and address of the purchaser/repacker of the game pieces was not provided. We note that this is not necessarily a requirement under section 134.26; only that the importer provide a notice of the marking requirements to the subsequent purchaser/repacker. While we note that the port director may get assurances that the ultimate purchaser will receive the game pieces in properly marked containers, the name and address of each customer of the importer (that is, if there are many), is not a prerequisite to the use of the repacking procedures of section 134.26. Nonetheless, in this case, there is only one customer, and that customer provided a notice that the origin of the game pieces will be indicated. Accordingly, it is our opinion that the procedures of section 134.26 may be used. Based on the May 12, 2000 letter from the broker, and attached certification signed by the importer and purchaser, it appears that the marking notice issued on May 10, 2000, was satisfied. Accordingly, it is our opinion that the protest should be granted. HOLDING: Based on the information submitted, we find that the marking notice was satisified since the certification of 19 CFR 134.26 was submitted. The protest should be ALLOWED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, John Durant, Director Commercial Rulings Division