MAR-05 RR:CR:SM 561179 KKV
Mr. Jim Wickstead
PBB International Trade Services
434 Delaware Avenue
Buffalo, NY 14202
RE: Tariff Classification and country of origin marking requirements applicable to printed material imported from Canada; Article 509; NAFTA Marking Rules; ultimate purchaser; 134.1(d); gift; giveaway; 134.32(d)
Dear Mr. Wickstead:
This is in response to your letter dated October 6, 1998 (which incorporates by reference previous correspondence dated May 26, 1998), on behalf of Harlequin Enterprises, Ltd., concerning the tariff classification and country of origin marking requirements applicable to printed material imported from Canada. Samples of the printed material were submitted for our consideration.
FACTS:
The goods at issue, described as “shelf talkers, coupons, catalogues, flyers and headers” are promotional articles designed to increase sales of published titles. We are informed that the material is imported into the U.S. by Harlequin Enterprises, Ltd. of Don Mill, Ontario, Canada and is purchased by a related company, Harlequin Sales Corporation, of Depew, New York, who will distribute the articles to bookstores and distributors free of charge.
Your letter states that “[a]ll of these products are manufactured and printed from NAFTA originating materials” and that the articles are “made in Canada.” The samples submitted are each individually marked with the phrase “Printed in Canada.” You indicate that the outermost carton in which the goods are imported will be marked “Printed in Canada” and inquire whether the individual marking on the articles may be removed.
ISSUE:
What is the tariff classification of the subject printed material and what country of origin marking requirements are applicable upon its importation from Canada?
LAW AND ANALYSIS:
I. Tariff Classification
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUS) is made in accordance with the General Rules of Interpretation (GRIs) 1 through 5. The systematic detail of the harmonized system is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relevant Section or Chapter Notes. Then, if GRI 1 fails to classify the goods, and if the headings and legal notes do not otherwise require, the remaining GRIs may be applied, taken in order.
Heading 4911, HTSUS, provides for other printed matter. The EN to heading 49.11, HTSUS, indicates that the heading covers all printed matter that is not more particularly covered by the preceding headings of the chapter and states, in particular, that “[t]he heading includes the following in addition to the more obvious products: (1) Advertising matter (including posters), year books and similar publications devoted essentially to advertising...” Based upon the samples submitted for our consideration, it is our opinion that the articles are described by this EN. Accordingly, all the articles are classifiable in subheading 4911.10.0080, HTSUS, which covers “Other printed matter, including printed pictures and photographs: Trade advertising material, commercial catalogs and the like: Other.” Goods classifiable in this provision are subject to a free rate of duty.
II. Country of Origin Marking Requirements
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 C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. As provided in section 134.41, Customs Regulations (19 CFR 134.41), the country of origin marking is considered to be conspicuous if the ultimate purchaser in the United States is able to find the marking easily and read it without strain. The degree of permanence of the marking should be at least sufficient to insure that in any reasonably foreseeable circumstance, the marking shall remain on the article until it reaches the ultimate purchaser unless it is deliberately removed. The marking must survive normal distribution and store handling.
Section 134.1(b), Customs Regulations (19 CFR 134.1(b), defines "country of origin" as:
The 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 this part; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
The country of origin marking requirements for a “good of a NAFTA country” are determined in accordance with Annex 311 of the North American Free Trade Agreement (NAFTA), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (December 8, 1993) and the Customs Regulations. Section 134.1(j), Customs Regulations (19 CFR 134.1(j), provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g), Customs Regulations (19 CFR 134.1(g)), defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules, set forth at 19 CFR Part 102.
Section 102.11, Customs Regulations (19 CFR 102.11), sets forth the required hierarchy for determining whether a good is a good of a NAFTA country for marking purposes. Accordingly, the country of origin of a good of a NAFTA country may be determined by sequential application of the rules set forth in 19 CFR 102.11(a), 102.11(b), 102.11(c) and 102.11(d).
Although the samples are printed with the phrase “Made in Canada,” no information has been submitted which would permit us to confirm this country of origin by application of the NAFTA Marking Rules set forth at 19 CFR 102.11. However, for purposes of this ruling, we assume that the imported materials are a product of Canada.
With regard country of origin marking, a prerequisite to determining the applicability of the requirements of 19 U.S.C. 1304 is ascertaining the identity of the ultimate purchaser of the imported articles. Section 134.1(d), Customs Regulations (19 CFR 134.1(d)), provides that the ultimate purchaser of a good of a NAFTA country is the last person in the United States who purchases the good in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. If the imported article is distributed as a gift, the recipient is the ultimate purchaser. However, if a NAFTA article is imported and distributed as a gift, the ultimate purchaser is not the recipient but the purchaser of the gift. See 19 CFR 134.1(d)(4).
We are informed that the printed material is imported by Harlequin Enterprises, purchased by a related company, Harlequin Sales Corporation, and distributed without charge to distributors and retailers of Harlequin books. Therefore, Customs determines that the material may be treated as gifts or giveaways. See Headquarters Ruling Letter (HRL) 735555, dated November 1, 1994 and HRL 558680, dated July 10, 1995. Assuming that the imported printed articles are a good of a Canada - a NAFTA country, as determined by the NAFTA Marking Rules set forth at 19 CFR 102.11, and the imported articles are distributed free of charge and are not intended to be sold in the United States, the ultimate purchaser of the imported articles is the last person who purchases the article in the United States in its imported condition and not the consumer who receives the imported article as a gift or giveaway. Accordingly, the ultimate purchaser of the imported printed material is the purchaser of the material - Harlequin Sales Corporation, who will distribute the articles in the United States free of charge.
Having determined that Harlequin Sales Corporation is the ultimate purchaser of the imported mailings, next we consider whether the printed material is excepted from the marking requirements. One exception is provided by 19 U.S.C. 1304 (a)(3)(D), implemented by 19 CFR 134.32(d), which exempts from individual marking those items for which the container will reasonably indicate the origin of such article. Accordingly, provided the outermost containers which reach Harlequin Sales Corporation are marked with the articles’ country of origin Canada the printed items themselves are excepted from country of origin marking.
HOLDING:
The printed material at issue is classifiable in subheading 4911.10.0080, HTSUS, which covers “Other printed matter, including printed pictures and photographs: Trade advertising material, commercial catalogs and the like: Other.” This provision carries a free rate of duty.
Assuming that the imported printed material is a product of Canada, as determined under 19 CFR 102.11, and the articles will be given away free of charge, the ultimate purchaser of the imported articles is the company who will distribute the materials to booksellers in the United States. Thus, provided the outermost containers are marked to indicate Canada as the country of origin, the imported printed articles will be exempt from individual marking, pursuant to 19 CFR 134.32(d).
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division