Application of Producers' Good Versus Consumers' Good Test in Determining Country of Origin Marking

AGENCY:

U.S. Customs Service, Department of the Treasury.

ACTION:

Final interpretation; extension of delayed effective date.

SUMMARY:

On March 14, 2000, Customs published as T.D. 00-15 a notice setting forth a final interpretation stating that Customs would no longer rely on the distinction between producers' goods and consumers' goods in making country of origin marking determinations. The notice prescribed a delayed effective date of June 12, 2000, for the final interpretation. The effective date was applicable to pipe fittings and flanges produced in the United States from imported forgings except for those which were the subject of a ruling subject to the procedure specified in 19 U.S.C. 1625. This document advises the public that the delayed effective date period for pipe fittings and flanges is being extended by an additional 90 days.

DATES:

This extension is effective June 8, 2000. T.D. 00-15 is applicable to pipe fittings and flanges on or after September 11, 2000.

FOR FURTHER INFORMATION CONTACT:

Monika Brenner, Attorney, Special Classification and Marking Branch, Office of Regulations and Rulings (202-927-1254).

SUPPLEMENTARY INFORMATION:

Background

On March 14, 2000, Customs published in the Federal Register (65 FR 13827) T.D. 00-15 a notice setting forth a final interpretation that adopted a previously published proposal to the effect that Customs would no longer rely on the producers' good to consumers' good test of Midwood Industries Inc. v. United States, 313 F.Supp. 951 (Cust. Ct. 1970), in determining whether a substantial transformation of an imported good has occurred for purposes of making a country of origin determination under the Customs marking statute (section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304)).

The preamble portion of T.D. 00-15 contained a discussion of the public comments solicited in response to the published proposal, including comments on whether a delayed effective date for the final Customs interpretation should be employed, consistent with the principle set forth in National Juice Products Association v. United States, 628 F.Supp. 978 (CIT 1986). One commenter argued in favor of a one-year delayed effective date period on the basis that the change proposed by Customs would be drastic for pipe fitting and flange producers because it would require the purchase and installation of new machinery. In response, Customs first noted that when the marking rules were adopted, importations from NAFTA countries became subject to a marking requirement and those importers were able to make these changes in far less than a one-year period. Although Customs specifically rejected the suggested one-year delay as not being necessary based on prior experience with other changes in country of origin marking regimes, Customs nevertheless agreed that a delayed effective date period would be appropriate. Accordingly, Customs stated in T.D. 00-15 that although Customs would require that all pipe fittings and flanges produced in the United States from imported forgings be marked with the country of origin of the imported forging, Customs would make the change effective 90 days after publication of the notice in the Federal Register, except in the case of a ruling subject to the procedure specified in 19 U.S.C. 1625. The final interpretation set forth in T.D. 00-15 therefore was published with a delayed effective date of June 12, 2000.

Customs has received a request on behalf of several companies seeking a further delay in the effective date of the notice. The request claims that these companies would suffer irreparable harm if the June 12, 2000, effective date set forth in T.D. 00-15 were not extended, because they are unable to comply with the marking requirements by that date. Customs believes based on this representation that it would be reasonable in the case of pipe fittings and flanges to provide up to 6 months from the March 14, 2000, publication of the final interpretation for producers and importers to conform to the new standard. Accordingly, Customs is modifying the effective date set forth in T.D. 00-15 in order to extend the delayed effective date period by an additional 90 days.

Extension of Delayed Effective Date Period

Based on the above, in T.D. 00-15 published in the Federal Register on March 14, 2000, at 65 FR 13827, under the Effective Date caption the date “June 12, 2000” is revised to read “September 11, 2000”.