Marking matters

By Rodney C. Schonland -- Logistics Management, 10/1/2000

Country-of-origin markings on products would seem an unlikely area for the U.S. Customs Service to oversee. Does the consumer really care where the vegetables in the frozen entrée came from? The consumer may not care, but Customs does. And when Customs cares about something, importers should care as well.

A record of marking problems will result in extra inspections, delayed shipments, and possibly even seizure of the imported goods. These are the kinds of problems a just-in-time (JIT) operation cannot afford to confront and that the retail trade wants to avoid at this time of year. There is also the small point that the marking requirements are law. Yet a little bit of forethought can prevent most marking problems from happening.

The marking regulations basically state that most foreign-origin items must be marked with the country of origin so that the consumer can determine, at the time of purchase, where the goods came from. That sounds simple, but determining the correct marking is not always straightforward.

To illustrate, let's use the example of carrots in frozen beef stew. The carrots were grown in Mexico. All of the other components are of U.S. origin. The carrots are imported fresh, packed in cardboard boxes, and are trucked across the border at Laredo, Texas. The processing plant ("Harry's Frozen Entrées") is in Illinois.

The cartons in which the carrots were packaged in Mexico for export state "Product of Mexico" as required. Prior to importing the carrots, "Harry" filed a request for a marking waiver with U.S. Customs at Laredo. That document indicated that it was not feasible to mark the carrots individually, and that "Harry" intended to peel, cut, cook, and then combine the carrots with other food items in order to manufacture frozen entrées. A sample of the retail box also was included with the request for a waiver.

"Harry" also previously requested a binding ruling from Customs regarding whether or not the carrots would lose their individual identities or would otherwise undergo a substantial transformation, from raw carrots to a component of beef stew. Customs ruled that the carrots remained carrots in the stew, and therefore the carrots must be marked. It is not practical, however, to mark carrots individually with the country of origin. Customs therefore allowed "Harry" to simply mark the retail box with "Carrots Product of Mexico."

If, on the other hand, Customs had ruled that the carrots would lose their identity when they were included in the beef stew, there would have been no requirement for country-of-origin marking on the retail box. The agency would only have required "Harry" to mark the shipping cartons for the raw carrots with "Product of Mexico" and file the previously noted marking waiver.

Marking issues can be summed up this way: Foreign-origin goods generally must be marked so that the consumer, at the time of purchase, can tell where the goods were made or grown. Even if the importer is sure about every detail, it is still a good idea to check with Customs and get a written determination of the marking requirements.

Do so and you'll be all set. Fail to do that and risk finding that the imported carrots are unavailable when it is time to make the beef stew.

Rodney C. Schonland is a Boston-based attorney who specializes in international trade, transport, and U.S. Customs law. He also is a licensed customs broker. He may be reached at One Broadway, Suite 600, Cambridge, MA 02142. Phone: (617) 621-1560.