MAR-05 RR:TC:SM 561032 BLS
Port Director
526 Water Street
Port Huron, Michigan 48060
RE: Country of origin marking of cigarettes; 19 CFR 134.32(c) and
134.32(o)
Dear Sir:
This is in reference to a letter dated June 4, 1998, from
Imperial Tobacco Limited ("Imperial"), requesting that we review
its proposed country of origin marking on packaged cigarettes to
determine whether the marking is in compliance with section 304,
Tariff Act of 1930, as amended (19 U.S.C. 1304) and the
regulations thereunder. Imperial also asks for an exception to
these requirements for a shipment that has been denied entry as a
result of improper marking.
FACTS:
A marking notice was issued on May 27, 1998, to the importer
of record
for the reason that packaged cigarettes imported from Canada were
not properly marked. The marking on the individual packages and
cartons of cigarettes reads as follows:
Mercer 100's, by Imperial Tobacco, Montreal,
Canada
Quality tobacco products since
1912
Distributed under license by: ITL (USA)
Limited
Boston, Massachusetts
02116
1-888-8-MERCER
The cigarettes were denied entry into the commerce of the
U.S. as marked and were returned to Canada.
Imperial requests that we rule on the sufficiency of the
marking proposed for future shipments. A sample of the cigarette
package and the proposed marking has been submitted. This
marking will appear on the carton and on the individual package
side panel. (It is noted that the product is sold either by the
pack or by the case.) Imperial
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also requests an exception to the marking requirements for the
339 cases of cigarettes comprising this shipment, based on
economic prohibitiveness to mark.
ISSUES:
(1) Whether the proposed marking on the cigarette packs
complies with the requirements of 19 CFR 134.46.
(2) Whether a marking exception may be granted for the 339
cases of cigarettes found to be improperly marked.
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 its 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 article 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., 27 CCPA 297 at 302; C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134) implements the
requirements of section 304.
Section 134.46, Customs Regulations (19 CFR 134.46) provides
as follows:
In 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
location in the United States, or the name of any
foreign country or locality in which the article
was manufactured or produced appear on an imported
article or its container and those words, letters
or names may mislead or deceive the ultimate
purchaser as to the actual country of origin of the
article, 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 or origin preceded by "Made in," "Product
of," or other words of similar meaning.
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In the instant case, 19 CFR 134.46 was triggered by the
appearance of a U.S. location for the cigarette distributor, as
an ultimate purchaser may be misled as to the actual country of
origin of the cigarettes. The marking "Mercer 100's, by Imperial
Tobacco, Montreal, Canada," is not equivalent to "Made in" or
"Produced in," and thus does not satisfy the special marking
requirements of this regulation. Therefore, the marking notice
was properly issued.
Proposed Marking
The proposed marking reads as follows:
Mercer 100's, by Imperial Tobacco, Montreal,
Canada
Made in Canada
Distributed under license by: ITL (USA)
Limited
Boston, Massachusetts, 02116
1-888-8-MERCER
This marking on the cigarette packages is located on one
side of the cigarette pack, on gold lettering against a red
background for the "regular" cigarettes, and in a dark blue
lettering against a gold background for the "lights." We find
that this marking is sufficiently legible and conspicuous and
will otherwise satisfy the requirements of 19 U.S.C. 1304.
Further, the marking satisfies the requirements of 19 CFR 134.46,
as the name of the country of origin is preceded by the words
"made in" and it appears in close proximity to, and in the same
size lettering as the U.S. address. As a sample carton was not
submitted with the request, we cannot rule on its compliance with
section 134.46. However, Imperial has orally advised that it
will request a ruling as to the sufficiency of the proposed
marking on the carton at a later date, and submit a sample at
that time. Accordingly, our determination in this case covers
the individual packages of cigarettes only.
Marking Exception Requested
With regard to the shipment that was the subject of the May
28, 1998 marking notice, Imperial believes that removal of the
seal from each individual pack in order to apply a country of
origin sticker will result in moisture loss and thus alter the
taste of the product. In any event, Imperial estimates the cost
of this task and resealing each pack (96,000 packages) at $.36
per pack or $35,000. The cost of labeling the packs over the
cellophane (assuming permanence of the label and compliance with
19 U.S.C. 1304) is estimated at $.29 per pack, or approximately
$29,000. Imperial also estimates the cost of writing off the 339
cases and re-manufacturing with new packaging
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materials at $150,000. The concerned Customs officer has advised
that the appraised value of the shipment is approximately
$90,000.
Section 134.32(c), Customs Regulations (19 CFR 134.32(c))
provides an exception from the marking requirements for articles
that cannot be marked prior to shipment to the U.S., except at an
economically prohibitive expense.
In this regard, we note that it is Customs policy not to
allow a permanent marking
exception based upon this prohibitive economic expense provision.
See Headquarters
Ruling Letter (HRL) 559453 dated July 16, 1996. Based on the
facts in this case, we find that pursuant to 19 CFR 134.32(c), a
temporary exception to the marking requirements is warranted
under 19 CFR 134.32(c) for the 339 cases of cigarettes that were
denied entry due to failure to comply with the requirements of 19
CFR 134.46. Subsequent shipments of the product must be marked
in accordance with the proposed marking and must otherwise
satisfy the requirements of 19 U.S.C. 1304 and the special
marking requirements of 19 CFR 134.46.
HOLDING:
1) The proposed marking "Made in Canada," on packages of
cigarettes, which appears in close proximity to the marking
indicating the U.S. location of the manufacturer's distributor,
satisfies the requirements of 19 U.S.C. 1304 and the special
marking requirements of 19 CFR 134.46.
2) Pursuant to 19 CFR 134.32(c), a temporary exception to the
marking requirements is granted for the 339 cases of cigarettes
for which a marking notice was issued. The exception covers only
this shipment. Subsequent shipments of cigarettes must be marked
conspicuously, legibly and permanently with the country of origin
of their contents.
Please provide a copy of this decision to Imperial Tobacco
Limited, 3810, rue St. Antoine Street, Montreal, P.Q. H4C 1B5.
Sincerely,
John
Durant, Director
Commercial Rulings Division