Application for Further Review of Protest 2002-90-000615 concerning the assessment of marking duties on imported tape products, removal of marking after importation; 19 U.S.C. 1304(f)

HQ 733957 December 23, 1993 MAR05 CO:R:C:V 733957 RSD CATEGORY: Marking District Director of Customs 423 Canal Street New Orleans, Louisiana 70130 Attention: Room 200 Protest Office RE: Application for Further Review of Protest 2002-90-000615 concerning the assessment of marking duties on imported tape products, removal of marking after importation; 19 U.S.C. 1304(f) Dear Sir: This is in response to your letter dated November 15, 1990, forwarding the application for further review of Protest # 2002- 90-000615 submitted by Ted Badurak, President of Tac Tape Company, Inc. in a letter dated April 26, 1990. FACTS: The record indicates that the importer, Tac Tape Company, Inc. made three entries for PVC Tape on October 3, 1989, under entry # 558-09101117-7, October 11, 1989, under entry # 558- 0997401-1 and November 27, 1989, under entry # 558-0911549-0. Although at the time of entry the tape was legally marked to indicate its country of origin, after release from Customs custody, the importer removed the country of origin markings from the merchandise, and in some cases placed a marking "Made in the U.S.A." on the goods. Customs agents conducted a full investigation and interviewed a number of the importer's employees, who admitted removing the markings from the tape. The importer eventually entered into an agreement with the U.S. Attorney's Office to plead guilty to one count of Section 542, Title 18, United States Code. Customs assessed an additional 10 percent marking duties on the entries involved. Subsequently, the importer filed a formal protest against the assessment of these duties. ISSUE: Can marking duties be assessed if goods are legally marked to indicate their country of origin at the time of importation but the marking is subsequently removed? 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. 19 U.S.C. 1304(f) provides that 10 percent marking duties shall be levied, collected and paid upon a finding that an imported good is not properly marked with the country of origin at the time of importation, and such article is not exported, destroyed or remarked in accordance with law. (emphasis added) In other words, marking duties equal to 10 percent of the value of the merchandise will be assessed if the merchandise is not legally marked at the time of importation, unless the imported merchandise is exported, destroyed, or remarked under Customs supervision prior to liquidation. However, if goods are legally marked at the time they are imported into the U.S., the importer is not liable for the payment of marking duties. In this case, the record indicates that although the merchandise was legally marked when it was entered into the U.S., the country of origin of marking was removed after the goods were released from Customs custody. The question that arises is what is meant by the phrase "at the time of importation." Goods are generally considered to be imported when they are brought within the jurisdictional limits of the U.S. with the intention to unlade. See The Sherwin-Williams Co. v. United States, 38 CCPA 13 (1950). When the goods were brought into the U.S. with the intention to unlade, Customs determined that they were legally marked. In other words, the goods were legally marked at the time of importation and it was not until after the goods were imported into the U.S. that the country of origin marking was removed. Therefore, we find that the importer is not liable for marking duties in this case. Congress enacted another provision, 19 U.S.C. 1304(h) to cover the situation where the country of origin markings are removed or altered, after importation. This provision subjects the person who intentionally removes the marking to criminal penalties. The appropriate remedy for the removal of the country of origin marking is prosecution under 19 U.S.C. 1304(h) and not the assessment of marking duties. HOLDING: Because the goods were legally marked at the time of importation, marking duties should not be assessed under 19 U.S.C. 1304(f) when the country of origin marking is removed after importation. The protest in regard to the assessment and collection of 10 percent marking duties should be granted A copy of this decision should be attached to Customs Form 19, Notice of Action, to be sent to the protestant. Sincerely, John Durant, Director,Commercial Rulings Division