MAR-2-05 CO:R:C:S 558018 MLR
Mr. Alex Romero, Jr.
A.F. Romero & Co., Inc.
P.O. Box 989
Calexico, CA 92231
RE: Country of origin marking of imported videos; advertising;
distributed free of charge; Article 509; NAFTA Marking
Rules; ultimate purchaser; section 134.1(d), interim
regulations; 19 CFR 134.32(d)
Dear Mr. Romero:
This is in reference to your letter of July 19, 1994,
requesting a ruling on behalf of Central Video S.A., regarding
the country of origin marking requirements of certain videos
distributed free of charge.
FACTS:
Central Video is a video duplicating facility in Mexicali
B.Calif, Mexico. Central Video duplicates videos and either bulk
mails them to the U.S. postal system or to U.S. companies, where
they are distributed to U.S. consumers free of charge.
The videos are used by companies as advertising to
demonstrate a particular good or service to a prospective
customer, or as training material for their clients who have
purchased their goods or services; by charities who solicit
donations; or by magazine companies who use the videos as bonuses
for new subscribers of their magazine. In all scenarios, the
videos will be distributed free of charge and the recipient has
no obligation to purchase any item.
ISSUE:
What are the country of origin marking requirements for
imported videos distributed in the U.S. free of charge?
LAW AND ANALYSIS:
The marking statute, section 304, 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.
Congressional intent in enacting 19 U.S.C. 1304 was "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." United States v.
Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements the
country of origin marking requirements and the exceptions of 19
U.S.C. 1304.
The country of origin marking for a "good of a NAFTA
country" are also 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), the interim amendments to the Customs Regulations,
published as T.D. 94-4, 59 Fed. Reg. 109 (January 3, 1994) with
corrections published at 59 Fed. Reg. 5082 (February 3, 1994),
and T.D. 94-1 published at 59 Fed. Reg. 69460 (December 30,
1993). These interim amendments took effect on January 1, 1994,
to coincide with the effective date of the NAFTA. The marking
rules used for determining whether a good is a good of a NAFTA
country are contained in T.D. 94-4 (adding a new Part 102,
Customs Regulations). The marking requirements of these goods
are set forth in T.D. 94-1 (interim amendments to various
provisions of Part 134, Customs Regulations).
Section 134.1(g) of the interim regulations, defines a "good
of a NAFTA country" as an article for which the country of origin
is Canada, Mexico, or the U.S. as determined under the NAFTA
Marking Rules. Since the videos are duplicated in Mexico, we
will assume for purposes of this ruling that the country of
origin of the imported articles is Mexico. Thus, the NAFTA
marking rules must be applied in determining the appropriate
marking requirements of the imported articles.
In determining the country of origin marking for the
imported videos, the first inquiry concerns the identity of the
ultimate purchaser in the U.S. of the imported articles. Section
134.1(d) of the interim regulations, provides that the ultimate
purchaser of a good of a NAFTA country is the last person in the
U.S. 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 the purchaser of
the gift rather than the recipient. See Section 134.1(d)(4) of
the interim regulations.
Since the videos at issue are imported into the U.S. from
Mexico, a NAFTA country (assuming the imported article is a good
of Mexico) as gifts or giveaways which are not intended to be
sold in the U.S., the ultimate purchaser of the imported article
is the last person who purchases the article in the U.S. in its
imported condition and not the consumer who receives the imported
article as a gift or giveaway. Accordingly, the ultimate
purchasers of the imported videos are the U.S. companies which
pay for the duplication of the videos which are to be distributed
in the U.S. free of charge.
The last issue to be determined is whether the imported
videos are excepted from country of origin marking. An article
is excepted from marking under 19 U.S.C. 1304(a)(3)(D) and 19 CFR
134.32(d), if the marking of a container of such article will
reasonably indicate the origin of such article. Accordingly,
provided the outermost container is marked with the article's
origin, the videos themselves will be excepted from country of
origin marking.
HOLDING:
On the basis of the information submitted, assuming the
imported videos are goods of Mexico, a NAFTA country, and are to
be imported into the U.S. in the manner described above, the
ultimate purchasers of the imported videos are the companies
which pay for the duplication of the videos and not those who
receive the imported videos free of charge through the mail or
from the company itself. Thus, provided the outermost containers
are marked to indicate "Mexico" as the origin of the imported
videos, pursuant to a 19 CFR 134.32(d) marking exception, the
imported videos themselves are excepted from country of origin
marking.
A copy of this ruling letter should be attached to the entry
documents filed at the time the goods are 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