Country of Origin Marking Internal Advice; Imported Condoms Marked with Domestic Address

HQ W968053 April 4, 2008 CLA-2 OT:RR:CTF:TCM W968053 BAS CATEGORY: Marking Lyman Davidson Acting Port Director U.S. Customs and Border Protection Port of Savannah One East Bay Street Savannah, Georgia 31401 RE: Country of Origin Marking Internal Advice; Imported Condoms Marked with Domestic Address Dear Mr. Davidson: This is in response to a memorandum from your Port, dated December 16, 2005, in which internal advice concerning the country of origin marking for imported condoms was requested. The submission at issue was filed on November 15, 2005 by Miller & Company, P.C. on behalf of their client, Ansell Healthcare Products, LLC. (Ansell). Your memorandum, counsel’s submission on the matter and a sample were forwarded to this office for our response. FACTS: The merchandise at issue is Lifestyles® condoms. The condom package indicates a domestic address with no reference to the country of origin. Specifically the individual condom package has the following address printed on it on one side in four locations: Ansell Healthcare Products LLC Dothan, Alabama 36303 USA The Lifestyles® condoms will enter the country in large boxes marked with the following information: “Product of Thailand,” “Manufactured For Ansell Healthcare Inc. Dothan, Alabama 36303, “Caution: For Manufacturing, Processing or Repacking” “For Re-Export Only.” The condoms are individually wrapped within the boxes. Ansell maintains that they are the ultimate purchaser of the imported articles since they intend to repackage the condoms and export them to Canada. They claim that they are the last in the United States to receive the goods in the condition as imported. Since Ansell knows the country of origin of the condoms, they assert that there is no need to mark the condoms with the country of origin and 19 CFR Part 134 does not apply. ISSUE: What are the country of origin marking requirements for the subject condoms? 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. The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, 12 CIT 1120 (Ct. Int’l Trade 1988), that: "In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297, 302 C.A.D. 104 (1940), where the court stated that: Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is 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. Section 304(a)(3)(D) of the Tariff Act of 1930, as amended (19 U.S.C. 1304(a)(3)(D)), excepts from individual marking requirements any article for which the marking of the container will reasonably indicate the origin of the article. Part 134, Customs and Border Protection (CBP) Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.Section 134.32(d), CBP Regulations (19 CFR 134.32(d)), reiterates the exception contained in 19 U.S.C. 1304(a)(3)(D) and applies in cases where the article is imported in a properly marked container and CBP officials at the port of entry are satisfied that the ultimate purchaser will receive it in its original unopened marked container. See HQ 731768 (December 8, 1988). The ultimate purchaser is defined in section 134.1(d), CBP Regulations (19 CFR 134.1(d)), as the last person in the U.S. to receive the article in the form in which it was imported. In HQ 732851, dated January 26, 1990, we addressed the issue of screw driver bits and sockets made in Taiwan, imported in bulk containers marked with the country of origin, combined after importation with U.S. made hand tools and then repackaged into a container that was not marked with the country of origin of the components. We ruled that if the importer certified to Customs (now CBP) that all the imported screw driver bits and sockets would be exported, then marking the country of origin on the original unopened container in which the U.S. manufacturer received the imported screwdriver bits and sockets would satisfy the country of origin marking requirements of 19 U.S.C. 1304. In HQ 559872, dated February 20, 1997, smoke alarms produced in Mexico and entered into the U.S. for storage and subsequent exportation to Australia were excepted from the marking requirements of 19 U.S.C. 1304 because the importer was the last person in the U.S. receiving the goods in the condition as imported and he was aware of the country of origin. In HQ 559872, we required the importer to file an appropriate certification with the port director at the time of importation stating that the smoke alarms were for export only and would not be sold in the United States. In HQ 731307, dated February 23, 1990, we held that imported castings known as follower rings which are used with other U.S. components in the manufacture of gate valves, butterfly valves and fire hydrants are excepted from individual marking requirements provided that 1) the containers in which the castings are imported are properly marked to indicate the country of origin of the castings; (2) CBP officers at the port of entry are satisfied that these castings will reach the valve or fire hydrant manufacturer in the original marked containers in which the castings are imported; and, (3) the castings will only be used in the manufacture of gate valves, butterfly valves and fire hydrants, as described in the ruling and not otherwise sold. Statements to this effect must be submitted for each entry for which this exception applies. In HQ 735443, dated October 27, 1994, CBP considered the country of origin marking requirements for bottles warehoused in a bonded facility. The importer had no intention of entering the bottles into the commerce of the United States, and the sole purpose in transporting the goods from Mexico to the United States was to allow the importer access to the more frequent shipping schedule available in the United States. We ruled that pursuant to the exception from marking provided for in 19 CFR 134.32(j), the goods and their outermost packing containers were not subject to the marking requirements of Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304). See also HQ 563021, dated July 7, 2004. Our decision was based in large part on a court opinion in East Asiatic Co., Inc. v. United States, 27 C.C.P.A. 364, C.A.D. 112 (1940), which held that imported articles and their containers that were placed in a bonded warehouse to await transportation and exportation and were not destined for consumption or use in the United States were excepted from the marking requirements of Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304).      Similarly, in HQ 968057, dated March 16, 2006, we held that dental and medical instruments that are imported into the United States and put into a warehouse for inspection before being exported are excepted from the country of origin marking requirements of 19 U.S.C. 1304. In HQ 968057, we reasoned that Section 134.32, CBP Regulations (19 CFR 134.32) sets forth some of the general exceptions to the marking requirements of 19 U.S.C. 1304. In particular, section 134.32(j), CBP Regulations (19 CFR 134.32(j)), provides that articles entered or withdrawn from a warehouse for immediate exportation or for transportation and exportation are excepted from the country of origin marking requirements of 19 U.S.C. 1304. This regulation applies to situations where merchandise enters the United States or is withdrawn from a warehouse, solely for exportation or transportation and exportation to another country and is never consumed or used in the United States. [emphasis added] However, 19 CFR 134.32(j) does not exempt articles entered into the United States which are intended for distribution and consumption domestically. We found that pursuant to 19 CFR 134.32(j), the imported dental and medical instruments were not subject to the marking requirements of Section 304 of the Tariff Act of 1930, as amended, (19 U.S.C. 1304) so long as the products are entered and withdrawn from a warehouse for immediate exportation or for transportation and exportation. This means neither the imported articles nor their containers are required to be marked to indicate their country of origin. However, this exception is not applicable if the goods are entered for consumption, whether or not they are subsequently exported. See also HQ 734475, dated March 18, 1992, wherein we held that non-recorded audio cassette tapes and their outermost packing containers, originating in Mexico and entered through Laredo for immediate exportation or transportation and exportation to Panama, were excepted from the marking requirements of Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provided the goods were not entered into the commerce of the United States. In HQ 734475, we reiterated that the exception provided for in 19 CFR 134.32(j) is not applicable if the importer enters the goods for consumption and subsequently exports them. The instant case is significantly distinguishable from the aforementioned cases. Specifically in HQ 735443, dated October 27, 1994 the imported bottles were warehoused in a bonded facility and in HQ 968057, dated March 16, 2006, the dental and medical instruments were stored in a bonded warehouse for immediate exportation. Accordingly the merchandise was excepted from the marking requirements of 19 CFR Part 134. While the boxes in which the individually wrapped condoms are imported do bear the words, “for Re-Export Only,” Ansell has filed a “type 01 consumption entry” which means there is no temporary import bond or other enforceable guarantee that the goods will be exported. Accordingly, there is a much stronger possibility that the goods could be diverted to the U.S. market The condoms as imported are not excepted from the marking requirements of 19 U.S.C. 1304. Therefore, we must determine what additional country of origin marking is required, if any. In cases where the name of a location in the U.S. or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced appears on an imported article or its container, 19 CFR 134.46 provides that there shall appear, legibly and permanently, in close proximity to such words, letters, or name, and in at least a comparable size, the name of the country of origin preceded by "Made in", "Product of", or other words of similar meaning. CBP has ruled that in order to satisfy the close proximity requirement, the country of origin marking must appear on the same side(s) or surface(s) in which the name of the locality other than the country of origin appears. Thus since the condoms have an Alabama address marked in several places on the wrapper, there must also be in close proximity to such words in at least comparable size the words “Made in Thailand” or “Product of Thailand.” Notably, if the Port Director were to receive proper certification that no one else in the U.S. would receive the Lifestyle® condoms and that Ansell Healthcare would be the ultimate purchaser, clearly marking the original unopened container in which the imported condoms will be received by the U.S. manufacturer would allow the ultimate purchaser to make an informed buying choice and would satisfy the country of origin marking requirements. HOLDING: We find that since there is no guarantee that the Lifestyle® condoms will not enter the U.S. stream of commerce, the country of origin marking requirements of 19 U.S.C. 1304 have not been met. To meet the requirements of 19 U.S.C. 1304, the name of the country in which the condoms were produced, Thailand, preceded by “Made in” or “Product of” must appear on the same side of each individual condom wrapper as the domestic address. If the importer certifies to CBP that all the imported condoms will be exported, marking the country of origin on the container in which Ansell Healthcare will receive the condoms would satisfy the country of origin marking requirements of 19 U.S.C. 1304. In the cases mentioned above, the CBP officers at the port of entry were satisfied that the products would not enter the U.S. stream of commerce. Appropriate certification to that effect was required. Sincerely, Gail A. Hamill, Chief Tariff Classification and Marking Branch