MAR 2-05 CO:R:C:V 733981 LR
District Director of Customs
El Paso, Texas
RE: Internal Advice 69/90; Country of origin marking of
subassemblies imported from Mexico; Made in U.S.A. marking; 19 CFR
134.36(b)
Dear Sir:
This is in response to your memorandum dated October 23, 1990,
forwarding a request for internal advice (I/A 69/90) submitted by
R. Miles and Sons, Inc., Customshouse Brokers, on behalf of General
Electric Company-Appliance Division (GE) concerning the country of
origin marking requirements of imported subassemblies which contain
a switch bearing a "Made in USA" marking.
FACTS:
GE purchases various components (switches, relays, varistors,
electrical conductors, and plugs) which they consign to their
wholly owned subsidiary in Mexico, Electrocomponentes de Mexico,
who assembles these components into subassemblies for electric
ranges and dishwashers. (We assume that the subassemblies are
eligible for importation under subheading 9802.00.80, Harmonized
Tariff Schedule of the United States). Subsequent to importation,
most of the subassemblies will be incorporated by GE or GE's
subsidiary into electric ranges and dishwashers. A small number
will be distributed as replacement parts.
In the past, your office has excepted from marking those
subassemblies which will be incorporated by GE into appliances
under the provisions of section 134.35, Customs Regulations (19
CFR 134.35). No country of origin marking was indicated on any of
the subassembly components. However, one of the components in the
subassembly, a switch, is now marked "Made in USA." Your position
is that because of the "Made in USA" marking, no exception from
marking is applicable. You cite 19 CFR 134.36(b), and 19 CFR
134.46 in support of your position. GE contends that the
subassemblies are excepted from marking under the provisions of
section 134.32(h), Customs Regulations, which excepts articles for
which the ultimate purchaser must necessarily know the country of
origin by reason of the circumstances of their importation or by
reason of the character of the articles even though they are not
marking to indicate their origin. GE states that neither 19 CFR
134.36(b) nor 134.46 applies in the circumstances of this case.
ISSUE:
Whether 19 CFR 134.36(b) precludes the granting of an
exception from marking to a subassembly which is a product of
Mexico, but is marked "Made in USA" on one of its components.
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 (emphasis added). Part 134,
Customs Regulations (19 CFR Part 134), implements the country of
origin marking requirements and exceptions of 19 U.S.C. 1304.
For purposes of 19 U.S.C. 1304, assembled articles entitled
to an exemption from duty under subheading 9802.00.80, HTSUS, are
considered products of the country of assembly. 19 CFR 10.22.
Accordingly, in this case, the country of origin of the imported
sub-assemblies is Mexico.
However, imported articles which are to be used in manufacture
which results in an article having a name, character or use
different from that of the imported article are excepted from
individual marking under 19 CFR 134.35. In addition, articles for
which the ultimate purchaser must necessarily know the country of
origin by reason of the circumstances of their importation are
excepted from marking. 19 CFR 134.32(h). Previously, your office
has excepted the imported subassemblies which were to be used in
the manufacture of kitchen appliances 19 CFR 134.35. (For purposes
of this case it is not necessary to determine whether the sub-
assemblies may also be excepted under 19 CFR 134.32(h)).
The issue in this case is whether either or these exceptions
applies if one of the components comprising the subassembly bear
the marking "Made in USA". For the reasons indicated below, we
conclude that they do not apply.
19 CFR 134.46 sets forth special country of origin marking
requirements that apply when reference is made to a place name
other than the country of origin. In such case, the country of
origin preceded by the words such as "Made in" must appear in
comparable size letters and in close proximity to the place name.
19 CFR 134.36(b), states that an exception from marking shall not
apply to any article bearing any words described in section 134.46
or 134.47 which imply that an article was made or produced in a
country other than the actual country of origin (emphasis added).
Customs has determined that 19 CFR 134.36(b) is to be strictly
construed. Thus, in C.S.D. 79-412 dated May 18, 1979, Customs held
that valve bodies which were made in Canada and marked "Cleveland,
Ohio, U.S.A." could not be excepted from marking requirements even
though the importer/ultimate purchaser knew the true origin.
Customs found that the final consumer of the automatic pressure
relief valve, of which the value body is a component, might
incorrectly conclude by seeing the valve body marked "Cleveland"
that the automatic pressure relief valve was made entirely in the
U.S. See also HRL 730069 (December 23, 1986 imported jacks
components with U.S. address not excepted from marking even though
the ultimate purchaser knows the country of origin).
In the cases cited above the imported article contained only
a reference to a place name other than the country of origin (e.g.,
Cleveland, Ohio, U.S.A.). In this case, not only does a place name
other than the country of origin of the subassembly appear thereon
(USA), it is preceded by the words "Made in". The "Made in USA"
marking is the only marking that appears anywhere on the
subassembly. Clearly, this marking erroneously implies that the
entire subassembly was made or produced in a country other than the
actual country of origin, which in this case is Mexico. We cannot
permit the subassembly to enter the commerce marked in this manner.
GE states that such marking is permissible because it is the
ultimate purchaser and it knows that the subassemblies are products
of Mexico. GE further states that the marking is permissible
because the final consumer (the purchaser of the GE appliance) will
not be misled by such marking because the switch on which the
marking appears was in fact made in the U.S. and the entire
appliance is a product of the U.S.
We are not persuaded. First, whether or not anyone is
actually misled by the "Made in USA" marking is not determinative.
19 CFR 134.36(b) applies whenever an articles bears a marking which
implies that it was made in a country other than the actual country
of origin. We are of the opinion that the potential for confusion
is great when an article of Mexican origin is imported into the
U.S. bearing only a "Made in USA" marking. Second, we note that
a small percentage of the imported subassemblies are not used by
GE in the manufacture of appliances but are sold as replacement
parts. Although ordinarily this fact will not disqualify those
subassemblies which are used in the manufacture of original
equipment from a marking exception (assuming that they can be
adequately segregated from those to be used as replacement parts),
when the imported subassemblies are affirmatively marked "Made in
USA", a denial of the exception for all imported subassemblies with
this marking is justified. The possibility exists that some of the
subassemblies that are originally planned for use by GE will be
sold as replacement parts with the "Made in USA" marking.
Finally, even if this possibility is eliminated, we believe
that the "final consumer" could be misled by the "Made in USA"
marking on the switch. It is impossible to determine what the
final consumer would conclude from seeing a "Made in USA" marking
on the Mexican subassembly. One conclusion would be that the
subassembly was made in the U.S. Another is that the finished
appliance was made in the U.S. Whether or not the finished
appliance could be marked "Made in USA" is beyond the scope of this
ruling; this is a determination for the Federal Trade Commission.
However, it is our understanding that this marking is permitted
only when the article is made entirely of U.S. components, which
is not the case here.
We conclude that under the provisions of 19 CFR 134.36(b),
the imported subassemblies bearing a "Made in USA" marking may not
be excepted from marking under 19 CFR 134.35 or 19 CFR 134.32(h).
In addition, in order to comply with the requirements of 19 U.S.C.
1304, the switches must be marked in a manner which clearly
indicates that the country of origin is Mexico and that only the
switch is of U.S. origin (e.g. "Assembled In Mexico"; "Switch Made
in USA"). Because of the USA reference on the subassemblies, the
close proximity and comparable size requirements of 19 CFR 134.46
also apply.
HOLDING:
Assuming you are satisfied that the imported subassemblies
will be used by OEM's in the manufacture of dishwashers and
electric ranges, they may be excepted from individual marking under
19 CFR 134.35 provided the "Made in USA" marking is removed.
Alternatively, the switches may be marked in a manner which clearly
indicates that only the switches are of U.S. origin (e.g. "Switch
Made in U.S.") so long as the subassembly is also marked to
indicate its country of origin in accordance with the requirements
of 19 U.S.C. 1304 and 19 CFR 134.46.
Sincerely,
John Durant, Director