[Federal Register Volume 59, Number 219 (Tuesday, November 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28159]


[[Page Unknown]]

[Federal Register: November 15, 1994]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 175

[T.D. (94-88)]

 

Decision Following a Petition by Domestic Interested Parties 
Concerning the Location and Method of Country of Origin Marking for 
Imported Cast Iron Soil Pipes

AGENCY: U.S. Customs Service, Department of Treasury.

ACTION: Final interpretative rule.

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SUMMARY: This document gives notice that Customs has made a 
determination pursuant to a petition filed by domestic interested 
parties that cast iron soil pipes like the samples submitted to Customs 
and that are subject to the requirements of section 304(c), Tariff Act 
of 1930, as amended, are not legibly marked in a conspicuous location 
to indicate their country of origin by die stamping the letters covered 
by tar at the edge or lip of the pipe.

EFFECTIVE DATE: The marking requirements set forth in this decision for 
cast iron soil pipe shall become effective as to merchandise entered or 
withdrawn from warehouse or consumption December 15, 1994. After that 
date, cast iron soil pipe like the sample submitted to Customs pursuant 
to this petition entered for consumption or withdrawn from warehouse 
for consumption and not marked to indicate their country of origin 
consistent with this decision and other marking requirements of the 
Tariff Act and Customs Regulations shall be assessed marking duties.

FOR FURTHER INFORMATION CONTACT: Robert Dinerstein, Office of 
Regulations and Rulings, U.S. Customs Service, (202) 482-7010.

SUPPLEMENTARY INFORMATION:

Background

    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.
    Part 134, Customs Regulations (19 CFR Part 134), implements the 
country of origin marking requirements and exceptions of 19 U.S.C. 
1304. As provided in section 134.41, Customs Regulations (19 CFR 
134.41), the country of origin marking is considered to be conspicuous 
if the ultimate purchaser in the U.S. is able to find the marking 
easily and read it without strain.
    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). In 1986, Congress 
enacted Public Law 99-514 which amended 19 U.S.C. 1304(c) to authorize 
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. The amendment, codified at 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.''
    On December 8, 1993, as part of the North American Free Trade 
Agreement (``NAFTA'') Implementation Act, Congress again amended the 
country of origin marking provisions on pipe. Public Law No. 103-182. 
Section 207(a) of the Act revised the requirements for marking the 
country of origin for pipes of iron, steel, or stainless steel by 
adding a fifth acceptable statutory method of marking, continuous paint 
stenciling. In addition, 19 U.S.C. 1304(c)(2) was amended by 
eliminating the reference in the statute which indicated that paint 
stenciling was an example of an equally permanent method of marking 
that could be used if it was technically or commercially infeasible to 
mark by one of the other statutory methods.
    Counsel for the domestic petitioners, U.S. manufacturers of cast 
iron soil pipe, first raised the question of whether the country of 
origin marking on imported cast iron soil pipe was legible and/or in a 
conspicuous location in 1992. Petitioners submitted a sample and 
photographs of imported pipe manufactured in Venezuela. After reviewing 
the sample and considering the information submitted, Customs concluded 
that the country of origin marking on the sample satisfied 19 U.S.C. 
1304 because the pipe was marked by one of the mandated statutory 
methods for marking pipe, die stamping. We stated, in a letter dated 
March 31, 1993, that the marking on the end of the pipe was in a 
conspicuous location and was legible. We further advised that if the 
domestic producers did not agree with Customs position, they could file 
a domestic interested party petition in accordance with 19 U.S.C. 1516 
and 19 CFR Part 175.

The Petition

    The instant petition was initiated by letter dated October 6, 1993, 
and filed with Customs under section 516, Tariff Act of 1930, as 
amended (19 U.S.C. 1516) and Part 175, Customs Regulations (19 CFR Part 
175). The petitioners are The American Brass and Iron Foundry and 
Charlotte Pipe and Foundry Company. The product at issue is cast iron 
soil pipe. As the name implies, it is pipe made of cast iron, and it is 
used primarily to convey waste water from sinks, showers, toilets, and 
other fixtures within buildings to municipal sewers. Both petitioners 
are U.S. companies which manufacture cast iron soil pipe like the 
imported product at issue.
    Submitted with the petition were other supporting materials 
including numerous photographs, diagrams, and other technical 
specifications regarding the pipe. In addition, accompanying the 
petition, were numerous letters from plumbing supply businesses, 
plumbing contractors, and general contractors.
    In explaining the merchandise, the petition points out that there 
are generally two different types of cast iron soil pipe: ``hub and 
spigot'' pipe and ``no hub'' (or ``hubless pipe''). The hub spigot pipe 
has a bell-shaped hub in which a straight spigot pipe is inserted. A 
rubber gasket is inserted between the two pipes to secure the juncture. 
No hub pipe has two straight ends. A stainless steel coupling and a 
rubber gasket are placed over the juncture where the two straight pipes 
ends meet.
    The cast iron pipe comes in a variety of standard sizes, with the 
pipe's inside diameter ranging from 1.5 to 15 inches. The pipe is 
generally produced in five- and 10-foot lengths. Plumbing 
subcontractors may cut the pipe to shorter lengths at a job site to 
make it fit to the needs of a particular building project. Besides the 
field cutting, the petitioners represent that there is no further 
processing done to the pipe. The pipe is sold to wholesalers of 
plumbing supplies who in turn, resell the pipe to plumbing 
subcontractors for installation in buildings under the auspices of 
general contractors. Sometimes the general contractor purchases pipe 
directly from the distributor and performs the installation with its 
own workforce.
    The petitioners contend that Customs should rule that the country 
of origin marking on the imported cast iron soil pipe is unacceptable 
because it is not conspicuous or legible. The pipe is marked, as shown 
by the samples, by die stamping on the end or lip of the pipe. Counsel 
for the petitioners maintains that this marking is difficult to find 
because of its location at the end of the pipe and hard to read due to 
the small surface area of the pipe end and the minimal thickness of the 
raised lettering. With respect to the size of the marking, the petition 
states that the marking on the imported pipe ranges from .183 inches on 
1.5 inch diameter pipe to a maximum of .73 inches on 15 inch diameter 
pipe and even on the largest pipes, the letters are less than one-inch 
high. It is also pointed out that the lettering is in a non-contrasting 
color and a tar coating will frequently cover the marking.
    All the letters accompanying the petition from plumbing supply 
companies, plumbing subcontractors, and general contractors declare 
that the way the imported cast iron soil pipe is presently being marked 
is inadequate. The contractors and suppliers indicate that they usually 
prefer to buy U.S.-made pipe because of its high quality. Furthermore, 
if there is a flaw in the product, the manufacturer can be located and 
it will either stand behind the product or be subject to the 
jurisdiction of the U.S. courts. In addition, a plumbing supply company 
points out that government construction jobs usually require American 
made goods. Moreover, frequently, even for non-government buildings, 
the engineering specifications call for U.S.-made pipe. Several 
suppliers also mention that if a building inspector discovers that 
unapproved foreign-made pipe has been used at a job site, the pipe must 
be replaced at substantial cost.
    Additionally, it is represented that sellers of foreign pipe can 
command a higher price if their customers are not aware of the pipe's 
origin. Since foreign-made pipe cost less, a considerable profit can be 
made if the origin is not adequately disclosed.
    The plumbing contractors and suppliers express the opinion that 
marking on the end of the imported pipe is not legible because of the 
small surface area which requires that the letters of the marking be 
small. The letters are also covered with a thick tar coating which 
obliterates any space between the letters and pipe surface.
    An additional point was made by a plumbing contractor who explained 
that the pipe is frequently stacked up with the hub face, with the 
country of origin marking on it, pressed against a wall. Because the 
pipe generally weighs between 45 and 85 pounds it is difficult to check 
every piece of pipe for country of origin marking. Often foreign pipe 
and domestic pipe is mixed together making it even harder to check the 
country of origin of all pieces of pipe. In addition, since the pipe 
must be moved away quickly so that other contractors can deliver their 
materials, there is often little time to check the country of origin 
marking at the end of the pipes.
    Another contractor explained that after the pipes are installed, 
the marking on the hub face becomes impossible to read because the ends 
of a hub and spigot pipe are covered by a compression gasket and the 
ends of the no-hub pipe are obscured by no-hub couplings. Furthermore, 
because the pipe may be cut in the field, the country of origin marking 
at the end of the pipe may be eliminated on the installed pipe, and 
thus it becomes impossible to check the pipe for its country of origin. 
This is of special concern to the general contractors because they must 
verify that the subcontractors they hired used the proper materials in 
accordance with a building's specifications.
    To avoid these problems, the contractors and plumbing supply 
companies request that Customs mandate that the country of origin of 
the pipe be paint stenciled on the barrel of the pipe.
    Because of the way cast iron soil pipes are made, the petitioners 
contend, under present technology, the only statutory method for 
marking pipe, listed in 19 U.S.C. 1304(c), which will produce a legible 
and conspicuous marking is paint stenciling. First, the petitioners 
state that cast iron pipe is very brittle and any attempt to die stamp 
a marking into the barrel of the pipe would cause the metal to shatter. 
Likewise, petitioners also maintain that it is also technically and 
commercially infeasible to mark by cast-in-mold letters on the pipe 
barrel due to the centrifugal casting process used in making the pipe. 
Under this process, iron is injected into a permanent metal mold. After 
the metal is cooled, a clamp-like device (known as a gripper or puller) 
is inserted into the hollow center of the pipe and the pressure of the 
gripper against the inside walls of pipe allows it to be extracted from 
the mold. If the marking were cast into the mold and transferred onto 
the pipe barrel, the pipe could not be extracted because the 
indentation from the lettering would destroy the smooth surface of the 
pipe and prevent it from being extracted.
    Finally, petitioners claim that etching or engraving the pipe would 
not produce a legible or conspicuous marking consistent with the 
requirements of 19 U.S.C. 1304. The letters of etched or engraved 
markings would be thin and would not have the bulk necessary to make 
them visible on a cast iron pipe. Moreover, the tar coating applied to 
the finished cast iron pipe would totally obscure any etched or 
engraved country of origin marking rendering the marking very difficult 
to read. However, no evidence or samples were submitted to support 
these claims.
    Accordingly, the petitioners urge Customs to require that the 
country of origin marking on cast iron soil pipe be done through paint 
stenciling following the standards developed by the American Society 
for Testing and Materials (``ASTM'') or the Cast Iron Soil Pipe 
Institute.

Discussion of Comments and Issues

    After receipt of the petition, in accordance with the procedures 
described in 19 U.S.C. 1516 and 19 CFR Part 175, a notice was published 
in the Federal Register on March 8, 1994 (59 FR 10764), stating that 
Customs had received a domestic interested party petition concerning 
the country of origin marking for imported cast iron soil pipe. The 
public was invited to comment as to whether the marking by die stamping 
on the end of imported cast iron soil pipe was sufficiently legible and 
conspicuous to satisfy the requirements of 19 U.S.C. 1304 or if paint 
stenciling had to be used to achieve a proper marking under 19 U.S.C. 
1304(c). In response to the notice, only one comment was received and 
it was from the petitioners. In this comment, petitioners point out 
that as part of the NAFTA Implementation Act, Public Law 103-182, 107 
Stat. 2057, 19 U.S.C. 1304(c) was amended by identifying continuous 
paint stenciling as one of five statutory methods by which iron, steel, 
or stainless steel pipe could be marked with the country of origin. 
According to the petitioners, this amendment to the statute supports 
their position because it is now not necessary to establish that it is 
technically or commercially infeasible for the article to be marked by 
die stamping, cast-in-mold lettering, etching, or engraving before 
paint stenciling can be permitted. They also point out that the amended 
statute requires a particular kind of paint stenciling, ``continuous'' 
paint stenciling. The comment stated that continuous paint stenciling 
means that the marking information must be repeated over the length of 
pipe barrel. It is their position that continuous paint stenciling will 
ensure that the country of origin marking will be conspicuous and that 
it will not be eliminated when the pipe is cut to length.

Customs Decision on the Petition

    After review of the petition, all the accompanying supporting 
statements and the comment, and upon consideration of the legal and 
policy factors, Customs has determined that the arguments presented in 
the petition have merit. We believe that the correct administration of 
the country of origin marking statute and regulations with cast iron 
soil pipe requires a reversal of the previous Customs position.
    In 19 U.S.C. 1304(c), Congress mandated that pipes, tubes, and 
fittings made of iron or steel must be marked by one of five statutory 
methods. However, there is no indication that Congress intended that 
marking by one of the statutory methods mentioned in 19 U.S.C. 1304(c) 
would eliminate the requirements under 19 U.S.C. 1304(a) that the 
marking also be legible and in a conspicuous location as the nature of 
the article will permit. Consequently, although cast iron soil pipes 
are marked by one of the methods specified in 19 U.S.C. 1304(c), die 
stamping, in order to satisfy 19 U.S.C. 1304(a), the marking must also 
be legible and be in conspicuous location. 19 U.S.C. 1304 requires that 
Customs not permit the importation of cast iron soil pipes into the 
United States unless they are legibly marked in a conspicuous location 
with their country of origin.
    As guidance, Customs has previously set forth some factors to 
consider in determining whether the country of origin marking on an 
imported article is legible and conspicuous within the meaning of 19 
CFR 134.41 and 19 U.S.C. 1304. Section 134.41, Customs Regulations (19 
CFR 134.41), requires that the ultimate purchaser in the U.S. must be 
able to find the marking easily and read it without strain. Customs has 
stated that among these factors are the size of the marking, the 
location of the marking, whether the marking stands out, and the 
legibility of the marking.
    The size of the marking should be large enough so that the ultimate 
purchaser can easily see the marking without strain. In other words, a 
marking which is too small to be read easily is not legible within the 
meaning of 19 U.S.C. 1304.
    Whether the marking stands out is dependent on where it appears in 
relationship to the other print on the article and whether it is in 
contrasting letters to the background. If the marking cannot be 
discerned from the background on which it is set against, it will not 
be an acceptable marking. The letters in the marking should be clear 
enough so that the ultimate purchaser is able to read them without 
strain. No single factor is considered conclusive in determining 
whether a marking meets the legibility and conspicuousness requirements 
of 19 CFR 134.41 and 19 U.S.C. 1304. Instead, it is the combination of 
these factors which will determine whether the marking on an article is 
acceptable.
    In addition, the location of the marking should be in a place on 
the article where the ultimate purchaser could expect to find the 
marking or where he/she could easily notice it from a casual inspection 
of the article. The ultimate purchaser should not have to hunt or 
carefully search for the marking.
    After reviewing the sample pipe and petition with its accompanying 
letters, we find that the marking on the sample cast iron soil pipe on 
the end or lip of the pipe by die stamped lettering, does not meet 
these criteria discussed above for a legible marking in a conspicuous 
place. Therefore, the sample pipe is not marked with its country of 
origin in accordance with 19 U.S.C 1304 and implementing regulations at 
19 CFR 134.41. We give great weight to the statements from plumbing 
subcontractors and general contractors that they are not able to 
ascertain the country of origin of foreign pipe from the present 
marking on the edge of the pipe. These pipes are generally sold in 
lengths of 5 to 10 feet so that a marking on the end of the pipe is not 
easily noticed. The pipes can weigh up to 85 pounds, making it 
difficult to lift the pipe to find the marking. In addition, the pipes 
are usually sold and delivered in large stacks. The marking is also 
frequently not visible because the end of the pipes with the marking is 
often pressed up against a wall.
    The location of the marking on the end of the pipe is also a 
problem because when the pipes are cut so that they can be installed at 
a particular job site, the end of the pipe with the country of origin 
may be cut off. Therefore, the country of origin marking may not be 
present on the pipe that is prepared for installation. Accordingly, we 
conclude that the edge or end of the sample cast iron soil pipe is not 
a conspicuous location for the country origin marking because the 
marking is not easily noticed from a casual inspection.
    Although the country of origin marking on the sample pipe, 
``Venezuela'', can be read, it is by no means a clear marking. We 
believe that when the marking is covered with tar, it will not be 
readily noticeable and it will be virtually impossible to read. 
Therefore, we find that the marking on sample pipe is not legible.
    With respect to the method of marking, the petitioners contend that 
4 out of the 5 methods of statutory marking are technically infeasible 
or will not produce a satisfactory marking. It is claimed that only 
continuous paint stenciling will produce markings on the pipe which are 
legible and conspicuous. Despite publishing a notice in the Federal 
Register, we have received no comments to dispute the petitioner's 
claim that out of the 5 statutory methods of marking, only paint 
stenciling can produce a legible and conspicuous marking. Nevertheless 
we cannot conclude that the absence of such comments in itself is a 
sufficient basis for Customs to prescribe this marking to the exclusion 
of the four other types of marking specifically allowed under the 
statute.
    The petitioners point out that Customs has previously mandated 
paint stenciling when the statutory methods of marking would produce an 
illegible marking. For example in T.D. 86-15, (51 FR 4559 (1986)), 
carbon and low alloy steel tubing was required to be marked by paint 
stenciling ``because the statutory methods of marking would be 
illegible on the relatively rough surfaces of articles.''
    However, we believe that the circumstances presented at the time 
T.D. 86-15 was issued were different from the current situation. At 
that time, 19 U.S.C. 1304(c) permitted no alternative methods for 
marking pipes, whereas the statute as amended by Public Law 99-514 in 
1986 now allows alternative methods for marking of pipe when it is 
commercially or technically infeasible to mark by the prescribed 
statutory methods if the alternative methods are equally as permanent. 
Therefore, Customs will permit the use of any statutory prescribed 
method of marking so long as the marking as applied to a given article 
is sufficiently legible, permanent and in a conspicuous place. However, 
if the other statutory methods of marking will not result in the pipes 
being legibly marked in a conspicuous location so that the ultimate 
purchaser will be informed about their country of origin, the marking 
of cast iron soil pipe must be done by the fifth statutory method of 
marking, continuous paint stenciling.

Conclusion and Delayed Effective Date

    The marking on the sample cast iron soil pipes by die stamping at 
the end of the pipe is not in a conspicuous place and is not legible, 
and therefore is not acceptable. In order to ensure that ultimate 
purchasers of these articles are informed about the articles' country 
of origin, the marking must be legible and be in a conspicuous 
location.
    An article will be considered cast iron soil pipe, like the sample 
pipe, and will be covered by this determination if the pipe is made of 
cast iron and is generally used for drain, waste, or vent purposes. The 
pipe may be either ``hub & Spigot'' or ``no hub'' with or without a 
bituminous coating.
    19 U.S.C. 1516(b) and the implementing regulation at 19 CFR 
175.22(a), provide that merchandise entered for consumption or 
withdrawn from warehouse for consumption thirty days after the date of 
publication of such notice to the petitioner is published in the weekly 
Customs Bulletin shall be appraised, classified, or assessed as to the 
rate of duty in accordance with the published decision. Therefore, the 
effective date of this decision will be delayed for 30 days from the 
date that this determination is published in the Customs Bulletin. 
After that date, cast iron soil pipe, like the sample submitted to 
Customs in connection with this petition, entered for consumption or 
withdrawn from warehouse for consumption and not marked to indicate the 
country of origin consistent with this decision and other marking 
requirements of the Tariff Act and Customs Regulations shall be 
considered not legally marked and will not be permitted to be imported 
in the United States. Marking duties will be assessed on any cast iron 
soil pipes, that are not properly marked prior to the liquidation of 
the entries.

Authority

    This notice is published in accordance with section 175.22(a), 
Customs Regulation (19 CFR 175.22(a)).

Drafting Information

    The principal drafter of this document was Robert Dinerstein, 
Office of Regulations and Rulings, U.S. Customs Service. Personnel from 
other Customs offices participated in its development.
George J. Weise,
Commissioner of Customs.
    Approved: October 24, 1994.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 94-28159 Filed 11-14-94; 8:45 am]
BILLING CODE 4820-02-P