[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withdrawn from warehouse or consumption December 15, 1994.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to this petition entered for consumption or withdrawn from warehouse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