MAR-2-05 CO:R:C:V 733888 GRV
Bruce N. Shulman, Esq.
Stein Shostak Shostak & O'Hara
1620 L Street, N.W., Suite 807
Washington, D.C. 20036-5605
RE: Country of origin marking of water heaters, that contain
multiple, variously marked labels, and their sealed contain-
ers, that are marked to indicate compliance with State cer-
tification requirements. Ultimate purchaser; 19 CFR
134.1(d)(3); conspicuousness; degree of visibility (print
size and type); typography; Words and Phrases; C.S.D. 91-
23; 19 CFR 134.41(b); 733736; container marking; 19 CFR
134.24(d)(2); C.S.D. 90-31; C.S.D. 80-119
Dear Mr. Shulman:
This is in response to your letter of October 24, 1990, on
behalf of Rheem Manufacturing Company, requesting a ruling
concerning the country of origin marking requirements applicable
to water heaters imported from Mexico in sealed containers.
Photographs and samples of the country of origin marking and
other labels were submitted for examination.
Information provided at a meeting at Customs Headquarters on
May 8, 1991, was also considered in this ruling.
FACTS:
Your client manufactures water heaters in Mexico for export
to the U.S. These water heaters have multiple labels glued onto
their sides denoting the name of the manufacturer and its U.S.
locations, the country of manufacture, and certain consumer
information concerning safe usage, duration of warranty, and
energy consumption. These labels are made of plastic and the
information is printed in different print types, sizes, and
colors. Based on the photographs submitted, we note that there
are approximately seven labels on a given water heater.
The label containing the country of origin marking is
actually two labels superimposed one on top another: a small,
"adhesive strip type" label, uniformly measuring 1 1/8 inches in
height by 5 inches in width, is contained within various sized
larger labels, measuring 6-3 inches in height by 5 inches in
width, that have a transparent window at the bottom to accommo-
date the smaller label; combined, the two labels appear as one.
The smaller label contains the country of origin marking
("MADE IN MEXICO") and the seal of the American Gas Association
(AGA). Both markings are printed on the right side of the label
in a one square inch space. The "MADE IN MEXICO" mark is printed
in black, light-face type letters measuring approximately 4-point
type (1/16" letters), located directly above the seal of the AGA,
which is printed in black, light-face type letters measuring
approximately 6-point type (1/12" letters). In the one square
inch of space where these two markings appear, the country of
origin marking is printed in a straight-line format, such that it
occupies only 1/16 of the space, whereas, the AGA seal in printed
over a twice encircled blue star insignia, which occupies 15/16
of the space.
The larger labels identify, inter alia, the manufacturer's
U.S. locations, which are printed in different--usually brighter
--colors than the above referenced marks--some are printed in
bold-face letters ranging in size from approximately 4-6-point
type (1/16-1/12 inch letters), and located above the country of
origin--and AGA seal--markings when the two labels are joined.
Other, consumer-oriented information on these labels is also
variously printed in print sizes and types ranging from 4-122-
point type and light-bold type face, and presented in different
--usually brighter--colors. In sum, the overall condition/
appearance of this composite label is that the country of origin
marking is denoted in the smallest print size and lightest print
type employed on the labels and located between U.S. references
that are presented in the same or larger print size.
The water heaters are packaged in sealed cardboard cartons
which are not marked to identify the country of origin of the
merchandise. However, the cartons are marked to indicate that
the merchandise complies with the certification requirements of
the State of California's energy standards, and other
information, e.g., the manufacturer's name, is presented on the
sealed cardboard box.
Customs import specialists at the port of entry suggested
that the country of origin marking on the water heater labels may
not be in accordance with 19 CFR 134.46 because the "MADE IN
MEXICO" marking is printed in smaller letters and different
colors than the markings which denote design compliance with the
American Gas Association and identify the U.S. locations of the
manufacturer.
You addressed these concerns within the context of complying
with the provisions of both 134.46 and 134.47, stating that
because the country of origin marking appears directly below the
manufacturer's U.S. locations in identical size type, these
circumstances meet the "close proximity" and "comparable size"
requirements of 134.46. Further, the inclusion of the American
Gas Association and California certification seals is only to
educate consumers to the fact that the water heaters meet the
design specifications of that organization and energy standards
of that state, and the marks are clearly of the type contemplated
by 19 CFR 134.47, which should be accepted, provided they are in
close proximity or in some other conspicuous location vis-a-vis
the country of origin marking. Also, you state that 134.46
does not require that all markings appear in the same color and,
since the contrast for the country of origin marking is at least
as noticeable as the manufacturer's U.S. locations marking, the
fact that different color inks have been used is irrelevant.
Another issue raised concerns whether the cartons have to be
marked to indicate the country of origin of the water heaters.
You argue that, as the water heaters are sold to either builders
and contractors for installation in buildings or to individual
consumers as replacement units, such that the shipping cartons
are not seen, marking of the carton is not necessary. You claim
that those consumers who buy or install their own water heaters
would see the country of origin marking on a display model in the
store.
ISSUES:
I. Is the country of origin marking on the water heaters
sufficient to meet the visibility requirements of 19 U.S.C.
1304 and 19 CFR 134.41?
II. Must the sealed shipping cartons also be marked to indicate
the origin of their contents, and does the presence of the
state energy standard certification marking trigger the
country of origin marking requirements of 19 CFR 134.46?
LAW AND ANALYSIS:
The marking statute, 304 of the 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 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.
The purpose of this provision is to permit the "ultimate
purchaser" in the U.S. to choose between domestic and foreign-
made products, or between the products of different foreign
countries. See, United States v. Friedlaender & Co., C.A.D. 104,
27 CCPA (1940); National Juice Products Association v. United
States, 10 CIT 48, 628 F.Supp. 978 (1986).
The "Ultimate Purchaser" Consideration
The "ultimate purchaser" is defined generally as the last
person in the U.S. who will receive the article in the form in
which it was imported. 19 CFR 134.1(d). If an article is to be
sold at retail in its imported form, the purchaser is the
"ultimate purchaser." 19 CFR 134.1(d)(3). The country of origin
marking is in compliance with the statute only if it is such
that, under normal conditions in the trade in which this
merchandise moves, it would reach substantially all ultimate
purchasers, not just some of them. U.S. Wolfson Bros. Corp. v.
United States, C.A.D. 2442, 52 CCPA 46, 50 (1965).
In this case, the water heaters will be purchased by two
distinct classes of ultimate purchasers in two different markets:
by novice, retail consumers seeking replacement heaters; and, by
experienced contractors-builders in construction markets for bulk
installation in building projects. Based on considerations
concerning the volume of merchandise purchased and the relative
experience of the class of ultimate purchaser in purchasing the
merchandise, we find that the marking needs of these two classes
are different. Whereas a small country of origin marking might
suffice to inform sophisticated, institutional classes of ulti-
mate purchasers--because they frequently buy water heaters in
multiple units, they are more versed in the markets of these
products and usually know where to look to find the country of
origin marking, a larger country of origin marking is required
were casual, one-time purchasers are present, because they do not
share this product/market familiarity and usually do not know
where to look to find the marking. Accordingly, where the size
of the country of origin marking is dependent on which class of
ultimate purchasers must be able to find and read it, to effect
the purpose of the marking laws, the greater needs of the less
sophisticated class outweigh the lesser needs of the more
sophisticated class. Accordingly, where necessary, a larger
country of origin marking must be employed, as the country of
origin marking must be accomplished with an eye towards informing
substantially all these ultimate purchasers, not just some of
them.
The Conspicuous Marking Requirement
The clear language of 1304 requires 'conspicuous' marking,
and to this end 134.41(b), Customs Regulations (19 CFR
134.41(b)), further provides, in part, that the ultimate
purchaser in the U.S. must be able to find the marking easily and
read it without strain. Whether words are considered
"conspicuous" or not is not determined by the size of type face
alone, but the location of disclosure, and manner in which it is
set off from other information are also determinative. See, 8A
Words and Phrases 366 (1951). Thus, "conspicuousness" is a
relative, i.e., context-dependent, concept. See, C.S.D. 91-23.
Where locations other than the country of origin of the mer-
chandise appear on an imported article, 134.46 imposes further
marking requirements on the imported article. It provides that:
[i]n any case in which the words "United States," or
"American," the letters "U.S.A.," any variation of such
words or letters, or the name of any city or locality in the
United States, or the name of any foreign country or
locality other than the country or locality in which the
article was manufactured or produced, appear on an imported
article or its container, 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.
The purpose of this regulation is to prevent the possibility of
misleading or deceiving the ultimate purchaser as to the origin
of the imported article. 19 CFR 134.36(b).
The country of origin marking requirements applicable to
imported containers are found at Subpart C of Part 134, Customs
Regulations (19 CFR Part 134, Subpart C), and distinguish between
containers designed for or capable of reuse and those that are
not designed for or capable of reuse (disposable containers).
There is no question in this case that the sealed cartons consti-
tute disposable containers, as cardboard boxes are the usual
ordinary types of containers used to package water heaters and
are ordinarily discarded after the contents have been consumed.
19 CFR 134.24(a). Section 134.24(d)(2) provides that:
[d]isposable containers or holders of imported merchandise,
which are sold without normally being opened by the ultimate
purchaser ..., shall be marked to indicate the country of
origin of their contents.
The Marking of the Water Heaters
Because the water heaters are not always sold to ultimate
purchasers in their containers, and may be displayed without
their containers, conspicuous marking of the water heaters is
required. Based on the photographs submitted and for the reasons
which follow, we find that the country of origin marking is not
easy to find and, therefore, not conspicuous within the meaning
of 19 U.S.C. 1304 and 19 CFR 134.41(b). First, there are no less
than seven labels affixed to each water heater conveying a
surfeit of information. Second, each label is printed in various
print sizes and types, which serves to draw the ultimate purchas-
ers' attention away from the country of origin marking, which is
presented in the lightest-face print type and smallest type size.
Third, the location of the country of origin marking--sandwiched
between references to U.S. locations--is not sufficiently set off
from other information, but, on the contrary, buried between
them. Fourth, because different classes of ultimate purchasers
in different markets will be purchasing the water heaters, the
country of origin marking should be presented in the format that
is more readily visible to the less sophisticated class, which is
unaccustomed to locating the mark, rather than a format designed
with the sophisticated, institutional class in mind. According-
ly, we suggest that the print size of the country of origin
marking be enlarged to at least a 5-point type and presented in a
format, e.g., bold-face, that is sufficiently prominent and
distinct, i.e., so that it is easy for the ultimate purchaser to
find and more fully meets the degree of visibility required by
134.41(b). See, Headquarter Ruling Letter (HRL) 733736 dated
June 19, 1991 (disparity between product description and country
of origin marking printing required latter marking be enlarged,
so that ultimate purchaser could more easily find the marking).
Regarding the import specialists' concerns that the country
of origin marking is printed in smaller letters and different
colors than the markings which denote design compliance with the
American Gas Association and identify the U.S. location of the
manufacturer for purposes of 134.46, we find that the country of
origin marking meets the requirements of this marking provision.
The difference in marking colors does not constitute a material
concern in this case.
Turning to address counsel's overall argument that because
the "MADE IN MEXICO" country of origin marking on the water
heaters satisfies the "close proximity" and "comparable size"
requirements of 134.46 and 134.47 it meets the overall "con-
spicuousness" marking requirements of 19 U.S.C. 1304, the
purposes of these marking provisions has been shown to embrace
different concerns. While we agree with counsel that the
country of origin marking in this case is "in close proximity"
and "comparable in size" to the location markings other than the
country of origin marking, and that the marking is easy to read
once it is located, the size and location of the country of
origin marking is not conspicuous enough so that the ultimate
purchaser can find it easily.
The Marking of the Sealed Shipping Cartons
As the water heaters will be imported in sealed, disposable
containers, and it appears likely that most ultimate purchasers
will buy them without normally opening the containers--a conclu-
sion based on the size of the merchandise (water heaters, by
their nature, are not the type of merchandise which are normally
opened by retail purchasers) and bolstered by the fact that the
California Energy Standards Certification is affixed to the con-
tainer and not the merchandise itself, the provisions of 19 CFR
134.24(d)(2) are applicable, which mandates that such containers
shall be marked to indicate the country of origin of their
contents.
Concerning the application of the provisions of 19 CFR
134.46 to the required country of origin marking because of the
U.S. locality reference on the California Energy Standards Cer-
tification, after viewing the photographs submitted and consid-
ering counsel's argument that the label is for informational
purposes only--and not to otherwise mislead ultimate purchasers,
it is our opinion that these marking requirements are not
triggered, as no possibility of misleading or deceiving ultimate
purchasers is apparent. In this regard, we follow our findings
in C.S.D.s 90-31 (the words "complies with 1979 California Energy
Standards" makes it unmistakable that the certification refers to
the consumer information and not to any articles contained in the
container) and 80-119 (the designation is placed only to alert
the consumer of compliance with state standards).
HOLDING:
The country of origin marking on the water heaters does not
meet the conspicuousness requirements of 19 U.S.C. 1304 and 19
CFR 134.46(b), in that the marking is not easy to find. As
various print sizes and types are employed to convey a surfeit of
information on multiple labels, the country of origin marking
must be enlarged and presented in a format which makes it more
readily apparent to the ultimate consumer. This could be accom-
plished by employing a more prominent print type and locating
the country of origin marking to a more visible place than
currently situated. However, the marking requirements of 19 CFR
134.46, requiring "close proximity" and "comparable size," are
met in the present case.
The disposable, sealed containers must be marked to indicate
the country of origin of their water heater contents, as required
by 19 CFR 134.24(d)(2), because water heaters constitute the type
of merchandise which are often sold without normally being opened
by the ultimate purchaser and ultimate purchasers will generally
purchase this merchandise without seeing the country of origin
marking on the article itself. The presence of the California
certification seal does not trigger the marking requirements of
19 CFR 134.46, as no possibility of misleading or deceiving
ultimate purchasers of the actual origin of the imported water
heaters is apparent.
Sincerely,
John Durant, Director
Commercial Rulings Division