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HQ 560215





March 25, 1997

MAR-2-05 RR:TC:SM 560215 MLR

CATEGORY: MARKING

Marilyn-Joy Cerny, Esq.
Global Customs & Trade Specialists
427 Little Britain Road
New Windsor, NY 12553

RE: Country of origin marking for steak knives; container marking; samples; 19 CFR 134.32(d); 19 CFR 134.26

Dear Ms. Cerny:

This is in reference to your letter of November 26, 1996, requesting a ruling on behalf of Tramontina USA, Inc. ("Tramontina"), concerning the country of origin marking requirements for imported steak knives.

FACTS:

It is stated that Tramontina imports steak knives for its client, Seneca-Delco Corp. ("Seneca"). It is stated that Seneca sells flatware and chinaware expressly and exclusively to institutional buyers, such as restaurants, hotels, airlines, nursing homes, and hospitals. It is also stated that Seneca sells the imported knives either directly to institutional customers or to distributors, such as restaurant supply companies, who sell the merchandise exclusively to food service institutions.

It is stated that the knives are packaged overseas in immediate containers holding one dozen individual utensils of the same type. The immediate containers are then packaged overseas in master shipping cartons holding multiple dozens (usually 30-50 dozen) of the same type of knives. Both the immediate containers and master shipping cartons are marked with the country of origin. After importation, it is stated that Seneca ships the knives to its customers or distributors. In rare instances, Seneca opens the outermost shipping container to fulfill orders requiring less than a full container. However, it is stated that the immediate containers are never opened because Seneca does not sell its utensils in quantities of less than one dozen.

In addition, it is stated that Seneca shows some of the knives to prospective buyers for purposes of soliciting sales. It is stated that these articles will not be sold, distributed or given away to U.S. companies. Seneca received Headquarters Ruling Letter (HRL) 559398 dated October 25, 1995, and it is stated that HRL 559398 involved a similar pattern of importation except that in this instance Tramontina, rather than Seneca, is the importer.

ISSUE:

Whether the steak knives may be excepted from individual country of origin marking.

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 (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 in the U.S. 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.

Section 134.1(d), Customs Regulations, defines "ultimate purchaser" as generally the last person in the U.S. who will receive the article in the form in which it was imported. It is contended that the institutional buyers are the ultimate purchasers of the steak knives, and since this merchandise will be received by the institutional buyers in properly marked containers, the steak knives are not required to be individually marked.

Pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d), an exception from individual marking is applicable where the marking of a container of such article will reasonably indicate the origin of the article. This exception is normally applied in cases where the article is imported in a properly marked container and Customs officials at the port of entry are satisfied that the ultimate purchaser will receive it in the original unopened marked container. Relevant factors regarding whether an article is likely to remain in its original container include the chain of distribution, the type of container, and the nature of the article.

Special marking requirements for knives and forks are set forth at 19 CFR 134.43(a), which require them to be marked by means of die stamping, cast-in-mold lettering, etching, engraving, or by affixing metal plates to the article. However, these requirements have been construed to be subject to the general exception from individual country of origin marking provided at 19 U.S.C. 1304(a)(3)(D) -- if the marking of the container will reasonably indicate its country of origin. See Headquarters Ruling Letter (HRL) 734154 dated August 19, 1991.

The facts of this case are similar to HRL 559398, where Customs excepted flatware and chinaware imported by Seneca from individual country of origin marking because the articles were sold to hotels, restaurants, and institutions, and not at retail outlets. The utensils were also packed in immediate marked containers that held one dozen of the same type of utensil. The master shipping cartons holding 30-50 immediate containers were also marked. Customs held that since there were no retail purchasers and all of the imported flatware and chinaware were packed in properly marked bulk containers, the flatware and chinaware were excepted from individual country of origin marking provided the Customs officials at the port of entry were satisfied that the ultimate purchasers received the flatware and chinaware in the original unopened properly marked outer container. In those instances, where Seneca opened the outer boxes, it was determined that the requirements of 19 CFR 134.26 had to be satisfied.

HRL 559398 is incorporated herein by reference. In this case, however, Seneca is not the importer as in HRL 559398. The steak knives will still only be sold to institutional users either directly or through distributors who sell to institutional users. Therefore, since the institutional users are the ultimate purchasers of the steak knives, these articles may be excepted from individual country of origin marking pursuant to 19 CFR 134.32(d) as long as Customs officials at the port of entry are satisfied that the ultimate purchasers receive the steak knives in the original unopened properly marked outer container. Furthermore, if the outer boxes are opened, the requirements of 19 CFR 134.26 must be satisfied.

Section 134.26(a), Customs Regulations {19 CFR 134.26(a)}, provides in pertinent part that:

If an imported article subject to these requirements is intended to be repacked in retail containers (e.g. blister packs) after its release from Customs custody, or if the port director having custody of the article, has reason to believe that such article will be repacked after its release, the importer shall certify to the port director that: ... (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer shall notify such purchaser or transferee, in writing, at the time of sale or transfer, that any repacking of the article must conform to these requirements.

Paragraph (d) of that section specifies the notice that shall be given to the subsequent purchaser or repacker.

Accordingly, as it is evident that Tramontina sells the knives to Seneca, and Seneca may open the outer container in order to fulfill smaller orders, Tramontina, as the importer, shall file a certification with the port director as indicated in 19 CFR 134.26(a), and shall provide a notice to Seneca, as indicated in 19 CFR 134.26(d). Additionally, if Seneca sells the knives to institutional buyers through distributors, Seneca shall also provide the notice indicated in 19 CFR 134.26(d) to its distributors informing them of the marking requirements. If the Customs officials at the port of entry are satisfied that the ultimate purchasers (i.e., the institutional buyers) receive the knives in properly marked containers, the knives may be excepted from individual marking pursuant to 19 CFR 134.32(d).

In regard to the steak knives which Seneca intends to show to prospective buyers for the purposes of soliciting orders, and which will not be sold, distributed, or given away, in HRL 559398 it was determined that if the imported flatware and chinaware were only used by Seneca as samples to solicit orders from prospective buyers, the flatware and chinaware could be excepted from marking pursuant to 19 CFR 134.32(d) since Seneca was the ultimate purchaser, and, as the importer, Seneca received the flatware and chinaware in properly marked containers. In this case, Seneca is not the importer. Accordingly, the knives may only be excepted from individual marking pursuant to 19 CFR 134.32(d) if the Customs officials at the port of entry are satisfied that the ultimate purchaser (i.e., Seneca) receives the knives in properly marked containers. Since the outer bulk containers are marked and it is indicated that Tramontina does not repack the knives, it appears likely that an exception from individual marking under 19 CFR 134.32(d) may be allowed.

HOLDING:

Based on the facts presented, the institutional users are the ultimate purchasers of the imported steak knives. Therefore, the knives may be excepted from individual country of origin marking pursuant to 19 CFR 134.32(d) as long as Customs officials at the port of entry are satisfied that the ultimate purchasers receive the knives in properly marked containers. If Tramontina sells the knives to Seneca, who may open the outer boxes, the requirements of 19 CFR 134.26 must be satisfied. Additionally, the knives may also be excepted from marking pursuant to 19 CFR 134.32(d) if they are only used as samples to solicit orders from prospective buyers, and if the Customs officials at the port of entry are satisfied that the ultimate purchaser (i.e., Seneca) receives the knives in properly marked containers.

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

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