Port Has Wide Discretion in Marking Rules Enforcement, CBP Says

An importer of bearings from China must individually mark the country of origin onto the bearings, rather than the packaging, CBP said in a April 5 ruling (here). While the importer, Tex Star Bearings, asserted that individual marking "is neither legally required nor commercially feasible," CBP disagreed. The agency found that the company didn't sufficiently prove that the bearings fall within an exception to marking rules because of some question as to whether the goods would reach the ultimate purchaser unopened. CBP's ruling came in response to a request for internal advice from the Port of Houston.

Tex Star imported thrust bearings, ball bearings and needle roller bearings in 2014 through the Port of Houston, which issued a notice to the company that permanent country of origin marking was necessary. All of the bearings were packaged with country of origin marking on the outside of the packaging, CBP said. Tex Star replied with a "blanket repackaging certification" that said if "the articles were repackaged in retail containers (e.g., blister packs), they will comply with the marking requirements." The Port of Houston didn't accept the certification and "determined that the bearings needed to be marked by way of etching, die stamping, engraving, or a similar marking method," CBP said.

There is a marking exemption allowed for goods with country of origin information listed on the packaging container "if the article is imported in a properly marked container and Customs officials at the port of entry are satisfied that it will reach the ultimate purchaser in the original marked unopened container in which it was imported." Factors considered by the port officials determining whether the goods are likely "to remain in its original container include the chain of distribution, the type of container, and the nature of the article," CBP said. "The instant containers did not contain retail information or characteristics indicating that they could solely be used for the bearings."

The port has discretion in enforcing the marking laws and by rejecting the Tex Star repackaging certification, it's clear "your office was not certain that the bearings would be delivered to the ultimate purchaser in the marked containers," CBP said. The company argued that the individual markings would also not satisfy the "conspicuous" requirement because of a brown lubricant that covers the bearings and would obscure any marking. Even so, "CBP has determined that the lubricant appears clear and the part/item numbers could still be seen as permanent markings on the bearings," it said.

CBP also pushed back against the company's argument that such marking would be "economically prohibitive" and therefore excepted from the marking requirements. A 2002 Court of International Trade case found that sufficient proof is necessary to show that the exemption is applicable, CBP said. "Tex Star has not submitted any estimates or invoices to support its remarking cost figures, nor has Tex Star provided cost figures for the alternative marking methods proposed," CBP said. Therefore, that exemption "is also not warranted" and "the individual articles need to be individually marked."