Country of Origin Marking of Products From the West Bank and Gaza

DEPARTMENT OF THE TREASURY

[T.D. 95-25]

Country of Origin Marking of Products From the West Bank and Gaza

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

ACTION: Notice of Policy.

-----------------------------------------------------------------------

SUMMARY: This document notifies the public that, for country of origin

marking purposes, goods which are produced in the West Bank and Gaza

Strip shall be properly marked as ``West Bank,'' ``Gaza'' or ``Gaza

Strip'' and shall not contain the words ``Israel,'' ``Made in Israel,''

``Occupied Territories-Israel,'' or words of similar meaning.

EFFECTIVE DATE: For those persons whose ruling is revoked, the position

set forth in this document is effective for merchandise entered or

withdrawn from warehouse for consumption on or after June 19, 1995; for

all other persons, this document is effective on April 6, 1995.

FOR FURTHER INFORMATION CONTACT: Wende Schuster, Special Classification

and Marking Branch (202) 482-6980.

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 (or its

container) imported into the U.S. shall be marked in a conspicuous

place as legibly, indelibly, and permanently as the nature of the

article (or its 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. Failure to mark an article in accordance with

the requirements of 19 U.S.C. 1304 shall result in the levy of a duty

of ten percent ad valorem. Part 134, Customs Regulations (19 CFR Part

134), implements the country of origin marking requirements and

exceptions of 19 U.S.C. 1304.

Past Policy

In the past, Customs has taken the position that in order for the

country of origin marking of a good which is produced in the West Bank

or Gaza Strip to be considered acceptable, it must be marked with the

words ``Israel,'' ``Product of Israel,'' or ``Israeli-Occupied West

Bank (or Gaza),'' or words of similar meaning. In all such instances,

Customs required that the word ``Israel'' must appear in the marking

designation. For instance, in HRL 718329 dated December 21, 1981,

Customs held that it is acceptable to mark goods which were produced on

the West Bank of the Jordan River with the phrase ``Israeli-Occupied

West Bank,'' ``Made in Israel,'' or ``Israel'' and to indicate such

marking designation on the Certificate of Origin Form A for purposes of

the Generalized System of Preferences (GSP). In another case concerning

goods produced on the West Bank of the Jordan River (HRL 718125 dated

November 12, 1981), Customs held that these goods must be marked with

the designators ``Israeli-Occupied West Bank'', ``Made in Israel'', or

``Israel'' for purposes of indicating the country of origin of the

merchandise pursuant to 19 U.S.C. 1304. In addition, in HRL 730094

dated January 30, 1987, Customs held that the proper country of origin

marking designation for soap which is produced in the West Bank is

``Israeli-occupied West Bank'' or simply ``Israel''. Finally, in HRL

734609 dated May 26, 1992, which concerned the [[Page 17608]] proper

country of origin marking of fruits and vegetables imported into the

U.S. from the Gaza Strip, Customs held that the designation ``West

Bank'' is not an acceptable country of origin marking because the

United States does not recognize the West Bank territory as an

independent political entity. Consequently, Customs stated in HRL

734609 that as the Gaza Strip has a similar status as the West Bank,

the country of origin markings, ``Israel-Occupied Gaza,'' ``Made in

Israel,'' or ``Israel'' but not simply the word ``Gaza'' can be used on

goods which are produced in Gaza.

Recognition of West Bank and Gaza Strip

The Department of State has advised that in accordance with the

Israeli-PLO Declaration of Principles on Interim Self-Government

Arrangements (``the DOP''), which was signed in Washington, D.C. on

September 13, 1993, Israel has agreed to transfer certain powers and

responsibilities to the Palestinian Authority. Under this Agreement,

Israel has also consented to make a similar transfer to a superseding,

elected Palestinian Council, as part of interim self-governing

arrangements in the West Bank and Gaza Strip. As part of this

Agreement, the Palestinian Authority has agreed to administer its own

tariff revenue collection and other customs matters. The Palestinian

Authority also acceded to set its own tax policy under the terms of an

implementing agreement which was concluded in Cairo on May 4, 1994. In

view of these recent developments, the U.S. Department of the State has

advised the U.S. Department of the Treasury by letter dated October 24,

1994, that, in their view, the primary purpose of 19 U.S.C. 1304 would

be best served if goods which are produced in the West Bank and Gaza

Strip are permitted to be marked ``West Bank'' or ``Gaza Strip.'' The

Department of State believes that labeling goods as coming from the

``West Bank'' or ``Gaza'' will provide American purchasers with

important information indicating their origin, which is the primary

purpose of 19 U.S.C. 1304.

Reliance Upon Advice From State Department

Customs has previously relied upon advice received from the U.S.

Department of State in making determinations regarding the ``country of

origin'' of a good for marking purposes. In T.D. 49743 dated November

10, 1938, the question was whether products imported from German-

occupied territories were regarded as products of Germany for the

purposes of the marking provisions of the Tariff Act of 1930, and for

determining applicable rates of duty. Based upon instructions given by

the U.S. Department of State, Customs held that as a result of a change

in jurisdiction from Czechoslovak to German in the Sudeten areas which

were under German occupation, products which were manufactured in those

areas and were exported on or after the date of German occupation were

considered products of Germany for purposes of country of origin

marking.

In United States v. Friedlaender & Co., Inc., C.C.P.A. (February

26, 1940), the issue involved the proper country of origin marking of

imported merchandise which was wholly manufactured in Czechoslovakia,

except at the time the goods were exported, the territory in which the

goods were manufactured was under German occupation. Customs held that

marking the goods as products of Czechoslovakia was not acceptable,

based upon instructions set forth in T.D. 49743. The court agreed with

Customs and held that as the goods were exported at a time when that

part of Czechoslovakia in which the goods were manufactured was under

German occupation, the marking ``Czechoslovakia'' was not in compliance

with the requirements of the marking statute, and the goods should be

marked to indicate ``Germany'' as the country of origin. However, in a

later Treasury Decision (T.D. 51360 dated November 30, 1945), the

position taken by Customs in T.D. 49743 was rescinded. In T.D. 51360,

Customs stated that the U.S. Department of State advised that the

boundaries of Czechoslovakia had been reestablished as they existed

prior to the date of the occupation by Germany, and that the United

States recognized Czechoslovakia as an independent state. Based upon

this information, Customs reversed the position taken in T.D. 49743,

and concluded that articles which were manufactured or produced in

Czechoslovakia after May 8, 1945, should be regarded as products of

Czechoslovakia for purposes of the marking provisions of the Tariff Act

of 1930.

Accordingly, consistent with prior Customs decisions, Customs is

relying upon advice from the Department of State for purposes of

defining the term ``Country'' within the meaning of section 134.1(a),

Customs Regulations (19 CFR 134.1(a)).

Revocation of Prior Rulings

On November 23, 1994, Customs issued telex 6327071, which stated

that Customs was proposing to change its position regarding the country

of origin marking requirements for goods made in the West Bank and Gaza

Strip. In the telex, Customs stated that effective immediately

merchandise which is produced in the West Bank or Gaza Strip may be

properly marked with the words ``West Bank,'' ``Gaza,'' or ``Gaza

Strip,'' without the words ``Israel,'' ``Product of Israel,'' or

``Israeli-Occupied West Bank,'' or words of similar meaning, also

appearing in the marking designation. The telex further stated that

Customs would publish a notice in the Customs Bulletin requesting

public comment on the modification or revocation of prior rulings

concerning this matter. However, it was further noted in the telex that

until such modification or revocation is effected, the prior rulings

concerning the proper marking of goods made in the West Bank or Gaza

Strip would remain valid and goods may continue to be marked in

accordance with them.

On February 8, 1995, Customs published a notice in the Customs

Bulletin (Volume 29, Number 6), proposing to revoke Headquarters Ruling

Letters (HRLs) 718329, 718125, 730094, and 734609, to reflect the

position that goods which are produced in the West Bank or Gaza Strip

shall be regarded as a product of the West Bank or Gaza Strip in

accordance with the requirements of 19 U.S.C. 1304 and 19 CFR Part 134,

and shall be marked as ``West Bank,'' ``Gaza'' or ``Gaza Strip,'' and

shall not contain the words ``Israel,'' ``Made in Israel,'' ``Occupied

Territories-Israel,'' or words of similar meaning.

Two comments received in response to the February 8, 1995, Customs

Bulletin notice both of which were favorable to the Customs proposal.

One commenter, however, suggested that Customs expand the proposed

position by allowing goods which are produced in the West Bank or Gaza

Strip to be marked as ``West Bank,'' ``Gaza,'' ``Palestine,'' ``West

Bank, Palestine,'' or ``Gaza, Palestine.'' The U.S. Department of State

has not identified the area within the West Bank or Gaza Strip as one

that should be recognized as ``Palestine.'' Therefore, articles which

are produced in the West Bank or Gaza Strip may not be marked as

products of ``Palestine.''

New Position

This document notifies the public that unless excepted from

marking, goods [[Page 17609]] which are produced in the territorial

areas known as the West Bank or Gaza Strip shall be marked as ``West

Bank,'' ``Gaza,'' or ``Gaza Strip'' in accordance with the requirements

of 19 U.S.C. 1304 and 19 CFR Part 134, and shall not contain the words

``Israel,'' ``Made in Israel,'' ``Occupied Territories-Israel,'' or

words of similar meaning. This document also revokes prior ruling

letters (HRL's 718329, 718125, 730094, and 734609) regarding the

country of origin marking requirements for goods which are produced in

the West Bank and Gaza Strip. For those persons whose ruling is

revoked, the position stated in this document is effective for

merchandise which is entered or withdrawn from warehouse for

consumption on or after 60 days from the date this document is

published in the Customs Bulletin; for all other persons, this document

is effective on the date of publication in the Federal Register.

Dated: April 3, 1995.

Stuart P. Seidel,

Assistant Commissioner, Office of Regulations and Rulings.

[FR Doc. 95-8454 Filed 4-5-95; 8:45 am]

BILLING CODE 4820-02-P