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

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withdrawn from warehouse or consumption December 15, 1994.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to this petition entered for consumption or withdrawn from warehouse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

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