**HQ 560776**

**May 4, 1999**

**RR:CR:SM 560776 RSD**

**CATEGORY:** MARKING

James O'Kelly, Esq.

Christopher Pey, Esq.

Barnes, Richardson & Colburn

475 Park Avenue South

New York, N.Y. 10016

**RE:** Country of Origin Marking Requirements of Home Electronics and
Entertainment Systems

Accessories from Various Countries; Commingling; Economically
Prohibitive; Repacking;

19 CFR 134.46; 19 CFR 134.32(a); 19 CFR 134.32(c); 19 CFR 134.32(o)

Dear Messrs. O'Kelly and Pey:

This is in response to your letter dated December 4, 1997, on behalf of
Gemini Industries, Inc. (Gemini) concerning the country of origin
marking requirements for various accessories used for home electronics
and entertainment systems which are imported from different countries.
Accompanying your request were samples of the kinds of products that
Gemini imports. In addition, we have received three supplemental
submissions. The cost and price information contained in the submissions
will be accorded confidential treatment. A meeting was held at our
offices on September 15, 1998, to discuss this matter. We regret the
delay in responding to your inquiry.

**FACTS:**

Gemini is based in Clifton, New Jersey and imports various accessories
for home electronic and entertainment systems. In addition to importing
accessories, Gemini repackages, distributes, supplies, and/or sells
consumer electronic accessories for sale under a number of different
brand names in the United States, such as Gemini, Axiom, PC Accessories,
Magavox, Southwestern Bell, and AT&T Wireless Services. Currently,
Gemini sells over four thousand products in different accessory
categories used in the connection, installation, maintenance, storage,
and replacement of consumer electronic equipment.

You explain that of the over four thousand products distributed by
Gemini, approximately 30% are sourced domestically and need not be
marked with their country of origin. Approximately 10% of Gemini's
products are imported in their final packaging and are not the subject
of this ruling request. Another 30% are imported in bulk from a single
country and are repackaged in containers showing a single country of
origin. This ruling also does not concern these products which are
imported from only one country. This ruling covers only products
imported in bulk from multiple foreign countries and that are repackaged
in blister packs or other types of consumer packaging in the U.S.

Gemini obtains the vast majority of its imported products from nine
Asian countries (China, Taiwan, Hong Kong, Japan, Malaysia, India, South
Korea, Thailand, and the Philippines). The products are imported into
the U.S. in bulk and are repackaged for retail sale at Gemini's Clifton,
New Jersey facility. Gemini repackages the imported products in the U.S.
in order to perform quality control procedures and because of the
quality of the U.S. packaging materials. Many major U.S. retailers in
the U.S., such as Walmart, Kmart, Office Depot, Home Depot, and CompUSA
sell Gemini's imported products.

Gemini imports the same products from different countries for several
different reasons. In some instances, Gemini's supplier has plants in
more than one country, and the supplier selects the plant which will
produce each shipment. In other cases, Gemini obtains products from
several companies which may be located in different countries.
Frequently, Gemini is unaware when it places an order in which country a
product will be produced. The countries where the products are made may
change on a shipment-by-shipment basis. You claim that, except in cases
where the product is incapable of being marked, the individual items are
marked with their country of origin.

After importation, the products are stored in a Gemini warehouse. Each
shipment is quality tested in the U.S. before the orders are filled. The
products are then packaged using the appropriate blister card and other
packaging for the item. Because Gemini often sells the same product
under several different labels, it must keep a blister card stock
numbering in the thousands of different types of cards with often more
than one card applicable to a single product. Gemini checks the actual
countries of origin of its imported products on a regular basis, and
updates the country of origin listing on the blister card stock the next
time blister cards are ordered. It is stated that the repackaging
operation adds significantly to the cost of an average product.

Gemini has provided samples of products which are imported in bulk and
individually marked with their country of origin. These items will
usually be repackaged in a blister pack or other clear packaging for
retail sale. You claim that Gemini will certify to Customs that the
packaging will not obscure or conceal the country of origin marking on
the article. The package will include a list of possible countries of
origin for the product with a disjunctive statement such as "Made in
Taiwan, Philippines or China". In addition, on the line beneath the list
of countries the statement "Quality Assured & Packaged in USA" appears,
and below this statement the words "Clifton, NJ" are printed. You advise
that if Customs does not approve the disjunctive marking, Gemini has
agreed to put a statement on the packaging adjacent to any origin
reference which will advise the consumer to inspect the article to see
the actual country of origin on the product.

Gemini also imports a number of low cost items in bulk such as
electrical connectors, video connectors, video cable connectors,
cellular telephone antenna connectors, telephone coil cords, audio
speaker, wire etc. You claim that these items cannot be individually
marked because of their small size. You have presented two samples of
items that you claim are incapable of being marked: two packages of
Coaxial Cable "F" Connectors. Each of the blister packages of the "F"
connectors contains two connectors with instructions and the country of
origin marking printed on the back side of the package. The blister
package containing the Heavy Duty F connectors has the country of origin
marking "Made in Taiwan, or China", while the blister package for the
"Twist-on" F connectors specifies the countries of origin as "Made in
Taiwan, China or Malyasia". Some of these products are valued at less
than \[ \] per piece at the time of importation. After importation, the
products are commingled in an inventory with existing stock of similar
items produced in different countries. Because the items will originate
in a number of different countries, Gemini wishes to indicate the
country of origin of these articles by using a disjunctive statement,
which lists several possible countries on the blister packs.

You contend that it would be economically prohibitive to indicate a
single country of origin on each blister pack. There are about \[ \]
products imported unmarked in bulk from several different countries
which are repackaged using disjunctive country of origin statements.
Because the products are sold under several different brands, Gemini
estimates that the unmarked products require three blister cards each to
account for the several manufacturers under whose names they are sold.
Gemini also estimates that on average, there are three countries of
origin for each product.

You indicate that the minimum order for a blister card printing run is
\[ \] at a cost of approximately \[ \] a piece. Therefore, a single
blister card run will cost Gemini \[ \], assuming that Gemini always
orders the minimum number of cards. Because approximately \[ \] products
could be affected, requiring individual country of origin marking would
require that Gemini keep an inventory of approximately \[ \] blister
cards. At \[ \] per card, the cost of printing the blister cards would
be approximately \[ \] in the first year. Gemini estimates that it would
be required to purchase an additional \[ \] worth of blister cards per
year to replace its inventory, as well as to cover the ongoing changes
to the countries of origin for the various products. Keeping the \[ \]
million blister cards would require additional storage facilities which
would cost Gemini approximately \[ \]. No information was provided
regarding the additional inventory costs involved in segregating the
imported products according to their country of origin, but you claim
that showing a single country of origin on each blister card would cost
at least \[ \] in the first year and approximately \[ \] per year
thereafter.

In your submission dated July 13, 1998, you further point out that
assuming that each product, on average, comes from one of three
countries, and would be sold under three different brand names, Gemini
would be required to produce and store nine different blister cards per
individual product, at a cost of approximately \[ \] per piece \[ /cards
x countries of origin x brand names\], as opposed to the current cost of
approximately \[ \] per piece.

The individual landed unit price for the items in question ranges from
\[ \] to

\[ \], with a median price of \[ \]. Current packaging costs are in the
range of \[one\] to \[66 times\] Gemini's cost for buying the goods.
Requiring each package to be marked

with a single country of origin would increase the packaging costs to
approximately \[ \] imes to

\[ \] times the price that Gemini is paying for the goods, or a range of
more than twice the cost of the method of country of origin marking that
Gemini is presently using.

According to the information provided, in 1996 Gemini posted a \[ \]
profit (net income as a percentage of net sales). It is also contended
that in the electronic accessories industry, the profit margins are
razor thin. You claim that an increase in the cost of any item of the
magnitude which would be necessary to indicate a single country of
origin on the blister packs could drive Gemini out of that particular
line of business, if not out of business entirely.

**ISSUES:**

I. Whether Gemini's use of the disjunctive multiple country of origin
marking on the blister packages for the items that are imported in bulk
and individually marked with country of origin is acceptable pursuant to
19 U.S.C. 1304 and Part 134 Customs Regulations (19 CFR 134).

II\. Whether the requirements of 19 U.S.C. 1304 would be satisfied if
there is a statement on the blister card advising the ultimate purchaser
to inspect the actual article for its country of origin.

III\. Whether the marking requirements of 19 CFR 134.46 are triggered by
Gemini's U.S. address and the phrase "Quality Assured and Packaged in
the U.S."

IV\. Whether it is economically prohibitive to indicate a single country
of origin on the blister packages for those articles which are imported
in bulk and are incapable of being 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 United States 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. The
purpose of the marking statute is outlined in [United States v.
Friedlaender & Co]{.underline}., 27 CCPA 297 at 302, C.A.D. 104 (1940),
where the court stated that: "Congress intended 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." Part 134, Customs Regulations (19 CFR Part 134), implements the
country of origin marking requirements and exceptions of 19 U.S.C.
§1304.

**I. [Articles Individually Marked with the Country of
Origin]{.underline}**

The first issue is whether the use of a disjunctive marking statement on
the blister cards, such as "Made in Taiwan, China or Malaysia", for
articles that are individually marked with their country of origin,
would satisfy the requirements of 19 U.S.C. 1304. Since the article will
be repackaged in clear plastic wrap, the country of origin marking on
the article will be visible at the time of purchase. It is generally
Customs' policy not to accept disjunctive country of origin marking such
as "Made in Taiwan, China or Malaysia" because it does not indicate the
actual country of origin as required by 19 U.S.C. 1304.
[See]{.underline} Headquarters Ruling Letter (HRL) 558647, November 30,
1994. Therefore, we find that labeling the blister card with the use of
a disjunctive marking without any additional labeling statement would
not satisfy the marking requirements.

**II. [Ultimate Purchaser Advised to Inspect Article]{.underline}**

You advise that if Customs finds the use of a disjunctive marking
statement does not satisfy the requirements of 19 U.S.C. 1304, Gemini
will put an additional statement on the blister card which instructs the
purchaser to inspect the actual article for its country of origin.
Customs previously has allowed importers to place a mark on the exterior
of a container instructing the ultimate purchaser to view the actual
article to determine its country of origin. In HRL 734491, April 13,
1992, Customs ruled that an importer of automobile parts may mark the
packaging "Contents Imported, See Article for Country of Origin". In HRL
734544, July 24, 1992, Customs allowed the importer to mark the cartons
not only with the possible countries of origin, but also with the
instruction to inspect the item itself for the actual country of origin.
In order to qualify for this type of marking, Customs held that the
carton must be unsealed allowing the purchaser to inspect the product
prior to purchase. [See also]{.underline} HRL 732099, November 3, 1989
("see bulb for country of origin" is acceptable on resale carton); HRL
732374, July 9, 1989 ("refer to neck label" acceptable on polybag
containing shirt). We believe that the situation in this case is similar
to HRL 734544 because the ultimate purchaser will have the opportunity
to see the country of origin marking prior to purchase because it will
be visible through the clear plastic wrap.

**III. [Section 134.46]{.underline}**

There is an additional concern of whether the requirements of 19 CFR
134.46 are triggered by the non-origin geographic references, "215 Entin
Road, Clifton, NJ 07014\" and "Quality Assured & Packaged in USA", on
the blister cards. Section 134.46 contains more rigorous marking
requirements designed to alleviate the possibility of misleading an
ultimate purchaser with regard to the country of origin of an imported
article. Section 134.46 provides that:

> 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 other than the 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 of origin preceded by "Made
> in," "Product of," or other words of similar meaning.

In Treasury Decision (T.D.) 97-72, published in the [Federal
Register]{.underline} on August 20, 1997, (62 FR 44211), Customs pointed
out that references to the U.S. made in the context of a statement
relating to any aspect of the production or distribution of the
products, such as "Designed in U.S.A.," "Made for XYZ Corp, California,
U.S.A." or "Distributed by ABC Inc., Colorado, U.S.A." are misleading to
the ultimate purchaser and would trigger the country of origin marking
requirements of 19 CFR 134.46. We believe that the same analysis would
apply to this case and that the non-origin references "Quality Assured &
Packaged in USA" and "Clifton NJ" appearing on the packaging, would
trigger the requirements of 19 CFR 134.46.

In prior rulings, Customs has determined that a marking similar to the
proposed marking that Gemini has agreed to put on the blister cards
satisfies 19 CFR 134.46. In HRL 734469, September 22, 1992, Customs
ruled that hang tags which were affixed to conspicuously marked
sunglasses and marked with the words "Country of Origin Indicated On
Sunglasses" in close proximity and in at least a comparable size to the
non‑origin geographical reference "Dallas, TX U.S.A." satisfied the
country of origin requirements of 19 CFR 134.46. In HRL 735024, April 7,
1994, Customs held that the same marking as occurred in HRL 734469,
[supra]{.underline}, also satisfied the requirements of 19 CFR 134.46.
Consequently, in this case if the ultimate purchaser is directed to see
the country of origin on the actual article, we find that the
requirements of 19 CFR 134.46 would be satisfied.

**IV. [Economically Prohibitive]{.underline}**

The last issue in this case is whether requiring Gemini to put a single
country of origin marking on the packaging for the articles that are
incapable of being marked is economically prohibitive. The articles in
question are imported in bulk and repackaged into blister packages after
importation. Gemini wants to use a disjunctive origin statement on the
blister package such as "Made in China or Taiwan" because it contends
that it would be economically prohibitive to put the actual country of
origin of each article on its blister package. You have provided only
two samples of the products that you claim are incapable of being
marked. Accordingly, we can only rule on items for which you have
presented samples. However, for the purposes of this ruling, we will
assume that the samples that you claim cannot be marked are in fact
incapable of being marked, although no specific evidence has been
presented to show that these articles cannot be individually marked with
their country of origin.

Among the exceptions from the marking requirements is 19 U.S.C.
1304(a)(3)(C) and (K) as implemented by 19 CFR 134.32(c) and (o) for
articles which cannot be marked prior to, or after, importation except
at an expense that would be economically prohibitive. As previously
pointed out, Customs policy is that in most circumstances, it is not
acceptable for purposes of 19 U.S.C. 1304 to mark an article with the
legend "Made in [         ]{.underline}, or " because such disjunctive
marking does not indicate the actual country of origin as required by 19
U.S.C. 1304. [See]{.underline} HRL 559849, dated December 6, 1996. In
C.S.D. 89-111, Customs ruled that certain effervescent enzymatic cleaner
tablets, the product of either the U.S. or West Germany, were required
to be marked for retail sale with the actual country of origin. Although
Customs acknowledged that the seller could avoid expense by using only
one retail package with the disjunctive marking, "Tablets made in West
Germany or the United States" Customs was not satisfied that full
accurate marking would be an economic prohibition, and therefore
required the item to be marked with only the actual country of origin.

Although Customs normally requires that an article be marked with its
specific country of origin, in some cases we have determined that strict
compliance with this requirement would be economically prohibitive and
alternative methods have been approved. In C.S.D. 84‑50, regarding
fertilizer, and C.S.D. 84‑44, regarding honey, the products were blended
from multiple source countries, and Customs required all major source
countries to be indicated. In those cases Customs did not agree that it
was economically prohibitive to mark the articles with a substantial
degree of accuracy.

Customs discussed the commingling and marking of semiconductors in T.D.
75‑187 (July 22, 1975). In that case, Customs allowed the containers to
be marked to indicate that the semiconductors were made in one or more
of the countries if they were made in different countries and were
commingled for a bona fide reason. In C.S.D. 84‑56, Customs considered
the marking of industrial fasteners such as screws, nuts, bolts, and
washers which are on the J-list (19 CFR 134.33). That ruling permitted a
country of origin label only to list the major source countries from
which a repackager acquired his stock and in the order of the greatest
percentage of stock (by weight or piece) to the least percentage of
stock. Countries from which a repackager only obtained small quantities
of fasteners did not have to be listed. This marking was allowed to
"eliminate the economic prohibitions of strict compliance but preserved
the repackager\'s obligation to advise the ultimate purchaser of the
foreign origin of the repackaged fasteners." C.S.D. 84‑56. It was also
stated that 19 U.S.C. 1304(a)(3)(k) exceptions must be strictly
construed. [See also]{.underline} HRL 732382, November 20, 1989
(regarding how to mark the containers of fasteners when a company
commingles foreign and U.S. made fasteners). However, in HRL 735482,
April 4, 1995, Customs did not allow the marking "This carton contains
domestic fasteners and/or fasteners produced in Taiwan". In HRL 735482,
the fasteners from the U.S. and Taiwan were not commingled and the
containers had to be marked with the actual origin of the imported
fasteners. In HQ 734165, December 2, 1991, Customs ruled that where U.S.
and foreign-made LEGO toy building blocks were commingled together, the
container could be labeled "Made in Denmark, Switzerland, and U.S.A."
since it was highly probable that a LEGO set would contain some pieces
from all three countries.

In order to use a normally unacceptable disjunctive marking statement in
this case we must resolve whether it is economically prohibitive to
require that the blister cards be marked with the single country of
origin of the article in question. With regard to the marking exception
in 19 CFR 134.32(o), we stated in HRL 733889, dated September 13, 1991:

> Although relatively little has been written in explaining exactly what
> the term economically prohibitive means, several factors have been
> considered to help determine when marking an item would be
> economically prohibitive. These include situations in which the
> requirement to mark the article to indicate its country of origin
> would force the producer to incur a cost that would require the item
> to be marked at a price at which: (1) the item could not be sold since
> an individual would not buy it; (2) no profit could have been made;
> (3) the profit that could have been obtained would not have been
> sufficient to induce the importer to handle the item. See
>
> Note, [Country of Origin Marking]{.underline}, 6 Law and Policy in
> Int\'l Business 485, 501‑502 (1974), citing Bur. Cust. Customs
> Information Exchange Ruling 114/51 (1951).

In this regard, the articles in question are imported in bulk and
commingled after importation before they are repackaged in blister
packages in the U.S. Thus, requiring the actual country of origin for
each article on the blister packs will result in greater inventory
costs. However, you have provided relatively little information
regarding these potentially greater inventory costs. Instead, much
information has been presented concerning the additional printing costs
that would be incurred if Gemini has to print separate blister cards to
indicate a single country of origin for the items they import. Although
you indicate that putting the actual country of origin on the blister
packages would greatly increase the costs involved in selling such
items, the information presented is not sufficient to justify an
economically prohibitive claim because there is no information regarding
how much Gemini charges when it resells the products to its customers
and whether these increased costs associated with marking the actual
country on each blister package would prevent Gemini from earning a
profit which is sufficient to allow it to handle the items in question.
It is also not clear if Gemini could absorb the increased costs and
still earn a profit or whether it could pass these increased costs onto
its customers. Along these lines, although Gemini indicates the total
profit it earned from all its operations (\[ \] in a recent year), there
is no information regarding the specific profit that it earns in
reselling the particular items that cannot be individually marked.

We are also of the opinion in considering the marking of the
semiconductors in T.D. 75-187 and fasteners in C.S.D. 84-56, that these
types of articles are normally commingled in sufficient quantity and to
such a degree that there is a good likelihood that a container of those
articles would be composed of the countries indicated. In this case one
sample of the coaxial connectors contains three different possible
countries of origin, but the blister package only contains two
connectors. Therefore, there will always be one country that is not
represented. Furthermore, in HRL 735482, where only two different
countries were involved, Customs decided that it would not be acceptable
to use a disjunctive marking. We recognize that in HRL 735482 there was
no commingling of the fasteners, however, under the circumstances
(especially since the second sample of the connectors only is marked
with two countries), we cannot conclude that Gemini has established a
permanent basis for determining that it is economically prohibitive to
put the actual country of origin on the blister packages in which the
items are sold. Accordingly, we do not find that an exception from
country origin marking is warranted pursuant to 19 CFR 134.32(c) or (o).
Therefore, using the disjunctive country of origin marking statement
with the word "or" on the blister packages such as shown on the sample
blister packages for the cable connectors does not satisfy the statutory
requirements of 19 U.S.C. 1304.

An alternative marking method which could be used, would be to list all
the various possible countries of origin on the blister package. When
the blister package is filled, the appropriate country of origin for the
individual product can be checked. This requires only one printed carton
for all the various countries of origin, and only minimal work to inform
the ultimate purchaser of the country of origin without requiring the
purchaser to open the carton and inspect the product. Using this method,
the importer still must meet the general Customs marking requirements of
19 U.S.C. 1304 and 19 CFR Part 134.

Additionally, we note that because all of the articles will be repacked
after importation, the certification procedures outlined in 19 CFR
134.26 must be followed.

**HOLDING:**

A statement on the electronic accessories' packaging which directs the
ultimate purchaser to see the country of origin on the article satisfies
the requirements of 19 U.S.C. 1304 provided that the article is properly
marked and the article is packaged in a clear plastic so that the
marking is visible to the ultimate purchaser prior to purchase. The
requirements of 19 CFR 134.46 are triggered by the non-origin geographic
reference "Quality Assured & Packaged in USA Clifton NJ", on the blister
card. However a statement on the packaging in close proximity to the
non-origin geographical reference directing the ultimate purchaser to
see the country of origin on the actual article would also satisfy the
requirements of 19 CFR 134.46. The evidence presented also does not
establish that it is economically prohibitive to indicate the actual
country of origin on the blister packages of the articles incapable of
being marked.

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