Country of Origin Marking of Aluminum Extrusions

HQ H244231 August 19, 2013 MAR OT:RR:CTF:VS H244231 RSD CATEGORY: MARKING Peter S. Herrick, Esq. 3520 Crystal View Court Miami, Florida 33133 RE: Country of Origin Marking of Aluminum Extrusions Dear Mr. Herrick: This is in response to your letter dated July 13, 2013, on behalf of PRP Trading Corporation, (PRP) requesting reconsideration of our memorandum, HQ H219219 dated June 12, 2012. In your letter of July 13, 2013, you have again enclosed a copy of your letter dated August 8, 2012, in which you had previously asked for reconsideration of HQ H219219. As the matter, at that time, was being contested in an exclusion and seizure case which had been transferred from the United States Court of International Trade to the U.S. District Court for the District of Columbia, we issued a letter to you on December 31, 2012, that due to the pending matter, we were not able to address your request for reconsideration. You now indicate that the U.S. District Court has dismissed the case, and so you again request that we reconsider HQ H219219. FACTS: The Area Port Director notes that the importer, PRP, is a high volume importer of aluminum extrusions through the Port of San Juan and that PRP does not manufacture any of the products at issue. Rather, it sells and distributes the imported aluminum extrusions after their release to various manufacturers, mainly aluminum door and window manufacturers. During a cargo examination of one of PRP’s shipments, the port determined that the imported merchandise was not legally marked with its correct country of origin. Subsequently, during the course of cargo examinations on several other shipments, the port also found that additional imported merchandise was not correctly marked. As a result of these discoveries, the Port of San Juan issued a Customs Form (CF) 4647, Notice to Mark, or Redeliver. In response to the Marking Notice, the port received a letter from PRP requesting a waiver from the country of origin marking requirements pursuant to 19 CFR 134.32(g). Under this marking exception, the imported articles must be processed by the importer or for his account. The port denied the waiver request because the importer was not processing the goods, but was reselling them in the same condition as imported. The port consulted with the National Import Specialist, who concurred that the imported aluminum extrusions must be marked to indicate their country of origin, and that it would be best if country of origin marking would be created at the time of manufacture, such as by die-sinking. You sent a letter to the port dated November 18, 2011, requesting that it seek advice from CBP headquarters. In our memorandum to the port, HQ H219219, we found that no reasons for an exception from marking pursuant to 19 CFR 134.32(g) were presented as PRP was not the processor of the aluminum extrusions. In your letter dated August 8, 2012, requesting reconsideration of HQ H219219, you explain that PRP imports aluminum extrusions in bundles which are packaged and marked with the country of foreign origin on the exterior of each bundle. After the bundles of aluminum extrusions are released by CBP and PRP is in possession of the articles, the aluminum extrusions are sold to builders and contractors. You claim, therefore, that the builders and contractors who purchase the aluminum and process them into windows are the last person in the U.S. to receive the articles in the form they are imported and that these parties are the ultimate purchasers of the imported articles. Therefore, you claim that the aluminum extrusions are exempt from marking pursuant to 19 U.S.C. 1304(a)(3)(H). ISSUE: Whether the aluminum extrusions are exempt from individual country of origin marking. 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 United States 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 United States the English name of the country of origin of the article. By enacting 19 U.S.C. § 1304, Congress intended to ensure "that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). The regulations implementing the requirements and exceptions to 19 U.S.C. § 1304 are set forth in Part 134 of the CBP Regulations (19 C.F.R. Part 134). Part 134, U.S. Customs and Border Protection (CBP) Regulations (19 C.F.R. § 134 (2011)) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b) defines “country of origin” as: [T]he country of manufacture, production, or growth of any article of foreign origin entering the United States. 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 the meaning of [the marking regulations]… A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. M.B.I. Merchandise Industries, Inc. v. United States, 16 C.I.T. 495, 502 (1992) (citing United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267, 270 (C.A.D. 98) (1940)). The question of whether a substantial transformation occurs for marking purposes is a question of fact, to be determined on a case-by-case basis. National Hand Tool Corp. v. United States, 16 C.I.T. 308, 311 (1992) (quoting Uniroyal Inc. United States, 3 C.I.T. 220 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983)). You claim that pursuant to 19 U.S.C. §§ 1304(a)(3)(D) and 1304(a)(3)(H), the aluminum extrusions are exempt from the individual country of origin marking requirement because of their substantial transformation in the United States. Furthermore, as initially requested in response to the Notice to Mark issued by the port, you maintain that the merchandise should also be exempt from country of origin marking pursuant to 19 U.S.C. 1304(a)(3)(G). Subsection 1304(a)(3)(H) (19 U.S.C. § 1304(a)(3)(H)), authorizes an exception from marking if "an ultimate purchaser, by reason of the character of such article or by reason of the circumstances of its importation, must necessarily know the country of origin of such article even though it is not marked ..... " Subsection 1304(a)(3)(G) (19 U.S.C. § 1304(a)(3)(G)), provides an exception to the marking requirements when an "article is to be processed in the United States by the importer or for his account otherwise than for the purpose of concealing the origin of such article and in such manner that any mark contemplated by this section would necessarily be obliterated, destroyed, or permanently concealed." Pursuant to 19 U.S.C. 1304(b), neither an article nor its container is required to be marked if the exception provided in 19 U.S.C. 1304(a)(3)(g) and (H) is applicable. The special "circumstances of importation" for an exception from marking under this provision generally refers to a situation where the importer is the ultimate purchaser of the imported article and there is a direct contract with the foreign supplier in which the supplier insures that the order will be filled only with articles manufactured in a named country. See Headquarters Ruling (HQ) 561225 April 9, 1999. Informing customers either through advertising or personally, or both, of the country of origin of imported articles is not sufficient to satisfy the requirements of 19 CFR 134.32(h), See U.S. Wolfson Bros. Corp. v. United States, 52 Cust. Ct. 86, 91 (1964). You have not submitted any evidence to show how the bundles of aluminum extrusions were actually marked. We specifically note that no samples or pictures of the bundles of the aluminum extrusions were furnished for our review. You also previously claimed in response to the Notice to Mark that the aluminum extrusions were exempt from marking under 19 CFR 134.32(g). Nonetheless, you note that the bundles of aluminum extrusions were properly marked with their country of origin, Malaysia. A marking exception under 19 CFR 134.32(g) would also not require the containers or bundles to be marked. See 19 U.S.C. 1304(b). Therefore, if the bundles were in fact properly marked, a marking waiver request under 19 U.S.C. 1304(a)(3)(G) and (H) (and 19 CFR 134.32(g) and (h)) raises questions why such a request was made. In addition, no information was presented to describe the nature of the manufacturing process performed on the aluminum extrusions in the United States. Therefore, we find that the determination set forth in HQ H219219 issued to the Area Port Direction of San Juan, Puerto Rico was correct and that the extrusions may not be exempt from the country of origin marking requirements of 19 U.S.C. 1304. You further point out that because the merchandise was seized and petitions are still pending, no entries were filed; hence, entries still need to be liquidated and no protests can be filed. As indicated above, the Port of San Juan advised that they issued a Notice to Mark/Redeliver (CF 4647), for the merchandise at issue. Thus, the appropriate remedy to contest the port’s determination that merchandise was not legally marked would be through a protest against the assessment of marking duties imposed by the Marking Notice. As you are aware, in a protest, you are given an opportunity to present all your claims with supporting evidence to show that the imported merchandise was legally marked to indicate its country of origin. However, at this point you should review whether filing a protest against the assessment of marking duties would still be timely in accordance with 19 CFR 174.12(e). HOLDING: The determination set forth in HQ H219219 issued to the Area Port Direction of San Juan, Puerto Rico was correct and the extrusions may not be exempt from the country of origin marking requirements of 19 U.S.C. 1304. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division