HQ 735278

July 13, 1994

MAR-2-05 CO:R:C:S 735278 RSD

CATEGORY: MARKING

John S. Rode, Esq.

Rode & Qualey

295 Madison Avenue

New York, New York 10017

RE: Country of origin marking requirements for induction-welded

steel mechanical tubing with highly polished surfaces; pipes;

ornamental tubes; stickers or tags; tagging the bundles;

19 U.S.C. 1304(c); T.D. 86-15; T.D. 92-70; HRL 734806

Dear Mr. Rode:

This is in response to your letter of July 16, 1993, on behalf

of Delhi-Solac Inc., regarding the country of origin marking

requirements for induction-welded steel mechanical tubing with a

highly polished surface. Enclosed with your request are copies of

informational brochures on these products. We regret the delay in

responding to your request. In several telephone conversations

between you and a member of our staff, we indicated that you needed

evidence to support the claims made in your ruling request.

However, we have received no further submissions, and therefore

this ruling is based only on the information you have already

presented. If you want to submit additional evidence to support

your allegations, you may do so in a new ruling request and another

ruling based on that evidence will be issued.

FACTS:

Delhi-Solac Inc. produces electric induction-welded steel

mechanical tubing in plants in Canada. The merchandise will be

imported through the ports of Buffalo, Champlain, Detroit, and Port

Huron for delivery to customers in the United States. The tubing

is manufactured from cold-rolled steel strip, from

hot-rolled, pickled, and oiled steel strip; from galvanized steel

strip; and from Galvalume coated steel strip, with the choice of

starting material being dictated by the particular customer

specifications and the end-application. It has a wall thicknesses

ranging from Birmingham Wire Gauge 22 (nominally 0.028 inches)

through Birmingham Wire Gauge 13 (nominally 0.95 inches). The

finished tubes are available in round, square, and rectangular

shapes. Round tubing is produced with nominal outer diameters of

one half inch through three inches; square tube is produced in

sizes ranging from one-half inch by one-half inch through two and

one-half inches by two and one-half inches; the range of the

rectangular tubing is from one-half inch by one inch through one

inch by three inches.

Delhi-Solac\'s customers in the United States use its tubing

in the manufacture of finished products which are in turn sold to

the ultimate user. The articles produced in the United States from

the tubes that Delhi-Solac imports include exercise equipment,

furniture, conveyer rollers, swimming pool ladders, modular

scaffold components, greenhouse arches and frames, ornamental

fences, and awning support structures.

Delhi-Solac maintains that its customers require that the

exterior surface of the tubing must be of the highest standards of

finish, appearance, free from contamination of oil, grease, paint,

and any other foreign substance. These customers also require that

the product not bear any source imperfection or blemishes in the

form of dents, chips, cracks, or any other interruption of or

discontinuity in, the exterior surface.

All tubing produced by Delhi-Solac from cold-rolled steel

strip and imported into the United States is sold to customers

which apply a chromium plating upon the exterior of the tube in

the course of manufacture. It is claimed that the plating

operation has the effect of making any pre-existing surface blemish

even more visible, and it is extremely difficult to ensure a

satisfactory plate on tube which has been painted or bears residue

left after the removal of paint, ink, or self-adhesive labels

applied previously. Paint, ink, and adhesive residues are

extremely difficult to remove to the extent necessary to ensure

that chromium plating can be applied uniformly to the surface of

the tube, and that the plating will endure over the anticipated

life of the end product.

For tubing produced from hot-rolled, pickled and oiled steel

strip, Delhi-Solac contends that any surface imperfection in the

basic tube is likely to be magnified from a visual standpoint, by

a paint or other coating, and the presence of paint, or adhesive

residues on the tube is inconsistent with the application,

adhesion, and durability of the final finish. In the case of pipe

and tube produced from galvanized or Galvalume strip, most of

Delhi-Solac\'s customers do not apply any coating or finish to the

exterior of the tube portion of the products they produce. Delhi-

Solac further contends that their customers regard the presence of

paint marking, ink legends, labels, or adhesive residue as

significant flaws in the appearance of their products, which must

be removed at significant cost, prior to sale in the United States.

The removal of paint, ink, labels, and adhesive cannot be

accomplished without the employment of solvents and other chemicals

which, apart from requiring additional labor capital investment and

time; also impose significant regulatory compliance burdens because

of the environmental, health and safety consequences of using such

solvents and chemicals.

It is also alleged that marking by die stamping, etching or

engraving will require additional effort, time and expense in the

manufacture of the finished article. Supposedly it is difficult

to apply a uniform layer of chromium to any surface which has

concave indentations; the application of electrostatic primers,

paints, and other coatings to such depressions is also difficult

and is highly likely to yield a substantial number of rejects.

In the case of galvanized and Galvalume tubing, any surface scratch

or interruption of the exterior surface, including that which

necessarily results from die stamping, etching, or engraving, is

a potential threat to the integrity of the protective metal surface

and in turn, increases the likelihood of accelerated corrosion.

Delhi-Solac also points out that there could be confusion over

the origin of the finished products, if the tubes used to make the

finished products, bear a visual and permanent indication of their

Canadian origin.

Because the vast majority of tubes sold by Delhi Solac are

directly sold to the ultimate purchaser, and the difficulty of

marking such articles by paint stenciling, ink, or by application

of adhesive labels, they seek to mark the country of origin of the

tubes by tagging the bundles or containers. However, no evidence

is presented to support the claims that the tubes would be very

difficult to sell if they had to be marked by one of the methods

indicated in 19 U.S.C. 1304(c)(1).

ISSUE:

Do the tubes with a highly polished surface described above

have to be marked to indicate their Canadian origin by cast-in mold

lettering, die-stamping, etching, engraving or continuous paint

stenciling?

Is tagging the containers or bundles an acceptable method of

marking the above described tubes?

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. 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 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.\" United States v. Friedlaender

& Co., 27 C.C.P.A. 297 at 302 (1940). C.A.D. 104 (1940).

Section 207 of the Trade and Tariff Act of 1984, (Pub. L. 98-

573), amended 19 U.S.C. 1304 to require, without exception, that

all pipe, tube, and pipe fittings of iron or steel be marked to

indicate the proper country of origin by means of die stamping,

cast-in-mold lettering, etching or engraving. 19 U.S.C. 1304(c).

However, after the enactment of Section 207, it was brought to the

attention of Customs that certain pipe and pipe fittings of iron

or steel cannot be marked by any of the methods prescribed by the

section without rendering such articles unfit for the purpose for

which they were intended. Customs solicited comments on this

subject, and issued T.D. 86-15 published in the Federal Register

on February 5, 1986, 51 FR 24, setting forth certain categories of

articles which may be marked by alternative methods. For certain

categories of articles, paint stencilling was the requisite method.

For other categories, paint stencilling or tagging of the bundles

or the containers was permitted. These categories included thin-

walled pipes and fittings, small-diameter pipes and fittings, other

fittings, line pipe, coated pipes, and spun iron pipe. These

categories of articles are described in detail in T.D. 86-15. In

addition, for ornamental pipes, tube, and fittings of all types,

having a highly polished surface, T.D. 86-15 permitted marking by

means of a durable tag or sticker securely affixed or marking the

protective wrapper.

In 1986, Congress enacted Pub. L. 99-514 which amended 19

U.S.C. 1304(c) to authorize such alternative methods of marking

if, because of the nature of an article, it is technically or

commercially infeasible to mark by one of the four prescribed

methods. 19 U.S.C. 1304(c)(2) provided that in such case, \"the

article may be marked \"by an equally permanent method of marking

such as paint stenciling or in the case of small diameter pipe tube

and fittings, by tagging the containers or bundles.\"

In order to carry out Congressional intent, on July 22, 1992,

Customs published, in the Federal Register, T.D. 92-70, which

amended T.D. 86-15 by permitting the country of origin marking of

pipes, tubes, and fittings by tagging of bundles or containers only

with respect to small diameter pipes, tubes, and fittings. T.D.

92-70 specifically stated that pipe, tubes and fittings which could

not be marked by a prescribed method must be marked by \"paint

stenciling or an equally permanent method.\" The notice indicated

that Customs does not consider tagging the containers or bundles

an equally permanent marking method as paint stencilling.

Therefore, marking pipe, tube, and fittings by tagging the bundles

or containers is acceptable only for small diameter product. In

T.D. 86-15, Customs determined that small diameter product included

fittings that have a nominal diameter of one-fourth inch or less

and pipe with an inner diameter of 1.9 inches or less.

Customs recognized in T.D. 92-70 that there might be some

cases where paint stenciling or an equally permanent method of

marking could damage the product and render it unfit for the

purpose it was intended. Customs indicated that in such instances

it would consider alternative methods of marking on a case by case

basis.

In section 207 of the NAFTA implementing legislation, (P.L.

103-182, December 8, 1993), Congress again amended section 19

U.S.C. 1304(c) by designating \"continuous paint stenciling\" as one

of the specified methods of marking pipe, tube and pipe fitting of

iron or steel. In other words, Congress added an additional method

by which imported pipes and tubes of iron and steel could be marked

with their country of origin, \"continuous paint stenciling\". In

order to mark by paint stenciling, it was no longer necessary to

show that it was commercially or technically infeasible to mark

pipe or tube by the other methods listed in 19 U.S.C. 1304(c). By

enacting this amendment to 19 U.S.C. 1304(c), Congress reaffirmed

its decision that pipes must be permanently marked by only certain

methods. Only in cases where it is technically or commercially

infeasible to mark by one of the mentioned methods can an

alternative be considered and that alternative must be equally as

permanent.

In HRL 734806 (April 22, 1993), the importer presented

evidence that demonstrated that paint stenciling of highly polished

ornamental mechanical tube would seriously mar the product, make

it unusable for the purpose for which it was intended and thus make

the products unsalable. Customs, therefore, authorized alternative

methods of marking. We pointed out that in T.D. 86-15, the

prescribed alternative methods of marking for ornamental pipes,

tubes and fittings of all types having highly polished surfaces,

were to have each piece separately marked with a durable tag or

sticker securely affixed to the surface of the article, or

separately wrapped in a protective wrapping which clearly indicates

the country of origin. We found that these methods would be the

most permanent method of marking possible that would not cause

damage to the products and were the best methods for marking the

products.

Delhi-Solac has made representations through its attorney

that in order to be commercially viable the exterior surface of

the mechanical tubes in question must be smooth and free of chips,

cracks or other imperfections. However, unlike the importer in HRL

734806, Delhi-Solac presented no evidence to substantiate its

claims. In order for Customs to find that it is commercially

infeasible to mark by all of the five specified methods mentioned

19 U.S.C. 1304(c), including continuous paint stenciling and that

alternative methods of marking should be permitted, we must

determine that marking the tubes by the methods specified in 19

U.S.C. 1304(c)(1) would seriously impair their exterior surface and

their outer appearance and thus make them very difficult sell.

Because evidence regarding whether it is commercially infeasible

to mark the tube in accordance 19 U.S.C. 1304(c) has not been

presented, the methods specified in T.D. 86-15, and again

authorized in HRL 734806, for ornamental tubing which required

unblemished exterior surfaces, will not be permitted in this case.

On the other hand, an exception can be made for the small

diameter tube, that is tube with a nominal inner diameter of 1.9

inches or less, because 19 U.S.C. 1304(c)(2) specifically indicates

that tagging of the containers or bundles is an acceptable

alternative method of marking. However, in accordance with 19

U.S.C. 1304(c)(2) and T.D. 92-70, for larger size tubes, we find

that the tagging of the bundles or containers is not equally as

permanent and not an acceptable method of marking. Therefore, the

larger tubes that Delhi-Solac\'s wants to import must be marked to

indicate their country of origin by one of the five methods

specified in 19 U.S.C. 1304(c). If Delhi-Solac eventually does

present evidence which will establish that it would be commercially

infeasible to mark by any of the five methods specified in 19

U.S.C. 1304(c), Customs will consider authorizing alternative

methods of marking the tubes, such as those permitted in T.D. 86-

15 and HRL 734806. In order to receive such consideration however,

a new ruling request should be made.

HOLDING:

Delhi-Solac has not established that it is commercially

infeasible to mark the mechanical tubing that it imports by all

five methods specified 19 U.S.C. 1304(c)(1), and therefore the

tubes must be marked by one of these five methods. However for

tubes with a nominal inner diameter of less than 1.9 inches, marking by
tagging the bundles or containers is acceptable. For

tubes of a larger size marking by tagging the containers or bundles

is unacceptable.

Sincerely,

John Durant, Director