HQ 734218

January 21, 1992

MAR-2-05 CO:R:C:V 734218 NL

CATEGORY: Marking

District Director

U.S. Customs Service

Norfolk, VA 23510

RE: Further Review Protest No. 1401-91-100076; Country of Origin

Marking; Redelivery Notice; Agricultural Hand Tools (Forks

and Hooks); Substantial Transformation; Attachment of

Handles After Importation; Economically Prohibitive; 19

U.S.C. 1304(a)(3)(K); 19 CFR 134.32(o); Immediate Delivery;

HRL\'s 723857 & 734246.

Dear Sir:

This is in response to the request of the importer, True

Temper Hardware, for further review by Headquarters of the issues

raised in his protest against the issuance of a Notice of

Marking/Redelivery (CF 4647) for failure to mark certain

agricultural fork heads with their country of origin. We have

received a post-conference submission from counsel for the

importer dated December 27, 1991.

FACTS:

On February 26, 1991, entry was made at Norfolk for 32

crates of agricultural fork heads, manure hooks, and ensilage

forks, all products of Austria and having an entered value of

\$182,500. The entry documents included a request on Customs Form

3461 for entry/immediate delivery in which the ultimate consignee

was designated as True Temper. This request was approved by

Customs on March 5, 1991. Also on March 5, 1991, the Norfolk

District issued a Notice of Marking/Redelivery to True Temper

stating that the articles were to be marked with their country of

origin. This notice was transmitted the same day to True

Temper\'s Customs broker in Norfolk and Baltimore. True Temper

was advised the same day of the Notice, although the date on

which the Notice was received by it may have been later.

On March 29, 1991, counsel for the importer advised the

Norfolk District that the merchandise had been delivered directly

to True Temper\'s customer, Ames Lawn & Garden Tools, and that by

the time True Temper received the Notice and contacted Ames the

goods were no longer in Ames\' possession. Counsel advised that

accordingly, True Temper would be unable to comply with the

Notice of Marking/Redelivery.

Counsel submitted a second letter to the Norfolk District

dated April 10, 1991, elaborating on the previous letter and

requesting a waiver of the marking requirements in this case.

Counsel represented that: 1) The importer had taken immediate

action to assure that the Austrian manufacturer would not ship

unmarked merchandise; 2) Once it learned of the marking violation

it attempted to have the articles redelivered; 3) In six years of

shipments of these implements this was the first marking

violation; and 4) There were several grounds upon which to grant

an exception from marking.

Specifically, counsel claimed there was authority under

previous Customs rulings and court determinations for a finding

that the attachment of handles to the fork heads effects a

substantial transformation of the latter, such that the assembler

is the ultimate purchaser of the fork heads and they may be

excepted from country of origin marking pursuant to 19 CFR

134.32(h). The protest records do not indicate whether all the

fork heads were to have been sold with handles attached, but as

discussed below, this factor does not affect the ultimate

determination. Second, counsel contended that the practical

difficulties of retrieving the fork heads after they had been

distributed by Ames made them eligible for exception from marking

pursuant to 19 CFR 134.32(o) as \"articles which cannot be marked

after importation except at an expense that would be

economically prohibitive\".

The Norfolk District denied the importer\'s request for

exception from marking duties, stating that Ames was not the

ultimate purchaser of the fork heads. It issued a claim for

liquidated damages for failure to redeliver the forks on April

17, 1991, and the entry was liquidated with the addition of ten

percent marking duties on April 19, 1991. Pending resolution of

the instant protest against issuance of the CF 4647, action on

the claim for liquidated damages and a related protest against

liquidation of the marking duties have been held in abeyance.

ISSUE:

Is the protestant entitled to relief?

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.

Part 134, Customs Regulations (19 CFR Part 134), implements

the country of origin marking requirements and exceptions of 19

U.S.C. 1304.

Protestant has conceded that the agricultural fork heads

were not marked with their country of origin at the time of

importation, and that they had not been so marked at the time

they were sold in commerce after early release from Customs

custody. In protesting the issuance of the Notice of

Marking/Redelivery (CF 4647) the protestant asks that we consider

whether any exceptions from marking may have been applicable, and

to give weight to any equitable considerations thought relevant.

A presumption of correctness attaches generally to the

decisions of Customs officials. With respect to country of

origin marking, post-importation claims for exception are

disfavored. However, if the importer is unaware until it is

brought to his attention by Customs that, for example, his

foreign supplier has failed to satisfy U.S. requirements, it is

appropriate to consider such claims. We are unable in this case,

however, to agree that these articles were eligible to be

excepted. The CF 4647 was properly issued, and we find no basis

for its cancellation.

With regard to the claim that the articles are substantially

transformed after importation, such that Ames was the ultimate

purchaser of the articles, Customs has long since decided the

issue. In T.D. 55033(5)(January 14, 1960) it was held that

\"Tools such as ensilage forks, hay forks, manure forks, rakes,

hoes, trowels, shovels, spades and scoops imported without

handles affixed \... must be legibly and conspicuously marked

\'head made in (country of origin)\' or \'blade made in (country of

origin)\' as the case may be.\" Plainly, it is intended that the

marking remain on the implement after its handle has been

attached, such that the ultimate purchaser, the user of the

finished tool, may be apprised of the country of origin of its

essential component, its head, fork, or blade. See also HRL\'s

734246 (October 21, 1991); 732857 (December 1, 1988); 950005

(January 9, 1992) (attachment of wooden handles in the U.S. to

imported finished hammer heads is not a substantial

transformation).

In this case the fact that Ames Lawn and Garden Tools may

have been aware of the Austrian origin of the implements is of no

importance, since it was not, under prior Customs authority, the

ultimate purchaser of the articles under 19 CFR 134.32(h). We

are unable to agree that several Customs determinations cited by

the importer are on point. Specifically, we find that T.D. 67-

173 (July 24, 1967)(party who attaches domestic-origin handles to

imported fishing rods is the ultimate purchaser of the imported

articles) and various rulings on the assembly of golf club heads

and grips (ORR 824-70 (August 24 1970); HQ 732213 (July 3, 1985);

HQ 734136 (June 17, 1991); and HQ 724901 (April 9, 1984)) cannot

be regarded as compelling authority in light of a prior Treasury

Decision addressing the precise point.

We agree that the cost to the importer of retrieving the

articles from retail distributors for marking after importation

would have been high, and that retrieval likely was a practical

impossibility. We do not agree however, that an exception from

marking under 19 CFR 134.32(o) is warranted. The key factor

which made retrieval for marking impossible was that the

importer\'s broker applied, in accordance with Subpart C, Part

142, Customs Regulations (19 CFR 142.21 et seq.), for immediate

delivery of the articles at the time of importation. It

apparently suited the importer\'s convenience to secure immediate

delivery, but under the Basic Importation and Entry Bond

Conditions of 19 CFR 113.61 et seq. the importer had agreed to

pay duties, including marking duties, and specifically, to

redeliver merchandise which must be marked with its country of

origin. Customs issued its demand for redelivery within the 30-

day period specified at 19 CFR 113.62(d), and the importer was

obligated under the bond to hold the merchandise available for

redelivery and remarking during that period. We find here that

the risk that the articles were unmarked at importation, and that

their immediate delivery to their consignee would make redelivery

and marking a practical impossibility, was assumed by the

importer.

The applicable exception from marking, 19 U.S.C.

1304(a)(3)(K), which is found in the Customs Regulations at 19

CFR 134.32(o), provides that an article may be excepted from

marking if it cannot be marked after importation except at an

expense that would be economically prohibitive unless the

importer, producer, producer, seller, or shipper failed to mark

the goods before importation to avoid meeting the requirements of

the law (19 U.S.C. 1304). While we recognize that there was no

intent to avoid meeting the marking requirements, and appreciate

that the importer has taken steps to avoid a recurrence, in our

opinion this exception under the circumstances cannot be

approved. To do otherwise would provide an incentive for

importers to dispose of goods as quickly as possible, and then to

claim that redelivery and re-marking are economically prohibitive

within the meaning of 19 U.S.C. 1304(a)(3)(K) and 19 CFR

134.32(o). If Customs has timely issued a notice of redelivery,

the expense of securing redelivery of articles released under a

permit for immediate delivery may not be considered in

determining whether marking articles after importation is

economically prohibitive under this exception.

HOLDING:

You are directed to deny this protest. Neither the importer

or its customer is the ultimate purchaser of the imported

articles, and the fork heads and other implements were subject to

country of origin marking both at the time of importation and

after processing in the U.S. We cannot find that marking after

importation is economically prohibitive when the importer has

chosen to take immediate delivery and is then unable to redeliver

the articles for marking. The decision of Customs officials at

Norfolk to deny exceptions from marking and demand redelivery is

fully supported by the record and is in accordance with

applicable law and Customs Regulations.

A copy of this decision should be attached to the Customs

Form 19 and mailed to the protestant as part of the notice of

action on the protest.

Sincerely,

John Durant

Director, Commercial

Rulings Division