Country of origin marking under 19 CFR 134: the 10 percent duty, the redelivery clock and the exceptions

What does US marking law require?

19 U.S.C. 1304(a) requires every article of foreign origin imported into the United States to be marked in a conspicuous place, as legibly, indelibly and permanently as its nature allows, with the English name of its country of origin, in a way that tells an ultimate purchaser in the United States where it was made. 19 CFR 134.11 restates the rule and adds that where the article itself is excepted, its container must be marked unless the container is excepted too.

Three definitions in 19 CFR 134.1 do most of the work:

• Country of origin is the country of manufacture, production or growth. Work done in a second country changes the origin only if it is a substantial transformation, except that for goods of Canada and Mexico the Part 102 rules decide (134.1(b)). That is why marking origin and the origin used for other duties can legitimately differ on one line, a split worked through on country of origin on past entries. This page takes the origin as decided and covers the marking itself.
• Ultimate purchaser is generally the last person in the United States who receives the article in the form in which it was imported; for USMCA goods, the last person who purchases it in that form (134.1(d)).
• Marking must survive normal distribution and store handling and be easy to find and read without strain (19 CFR 134.41(b)).

Some articles carry fixed methods. The statute itself lists pipe and pipe fittings (1304(c)), compressed gas cylinders (1304(d)) and certain castings such as manhole covers and grates (1304(e)) that must be marked by die stamping, cast-in-mold lettering, etching, engraving or a similarly permanent method, and none of them can use the ordinary exceptions. 19 CFR 134.43 adds hand tools, cutlery, surgical and scientific instruments, watches and clocks. Where a US place name, "USA" or another country's name appears on the article or its packaging in a way that could mislead, 134.46 requires the true origin, preceded by "Made in" or "Product of", close by and in comparable size.

What does the 10 percent marking duty cost on a line?

19 U.S.C. 1304(i) levies a duty of 10 percent ad valorem on an article that is not properly marked at importation, unless the article is exported, destroyed or marked after importation under CBP supervision before the entry liquidates. 19 CFR 134.2 applies it to the final appraised value, and to a missing English country name or a missing "Made in" phrase that the regulations require to prevent deception. (134.2 still cites the statute's old paragraph letter, 1304(f); the current text is 1304(i).)

The statute adds three properties that matter for an audit. The duty accrues at importation. It is levied in addition to every other duty and whether or not the goods are duty free. And it cannot be remitted or avoided for any cause once it has accrued. So the deadline that counts is liquidation.

A worked line, with illustrative figures: 1,000 cartons of kitchen tools, entered value $40,000, general rate 3.7 percent, found after release with origin stickers on the shipping cartons but none on the retail packs.

The marking duty is a fixed 10 points on top of whatever stack the line carries. On a line that is free of ordinary duty it is the only duty, and it is still due. The liquidated damages are a separate bond claim, described below, and are far larger. The duty calculator shows the rest of the stack for a code, origin and entry date.

What is CBP Form 4647, and what happens when goods are not legally marked?

The process in 19 CFR 134.3 and 134.51 to 134.54 runs in this order.

1. Before release. Under 19 U.S.C. 1304(j) and 19 CFR 134.3(a), goods held for examination are not delivered until they are marked or until the estimated marking duty, or security for it, is deposited.
2. After release, the demand. CBP may demand redelivery of released goods that are not legally marked. 19 CFR 134.3(b) and 141.113(a) put that demand no later than 30 days after the date of entry, where goods are examined at the docks or public stores, or 30 days after the date of examination, where they are examined at the importer's premises. The bond condition in 19 CFR 113.62(d) frames the limit as 30 days after release or after the end of the conditional release period, whichever is later. Read the dates on the notice against both.
3. The notice to mark or redeliver. The Center director notifies the importer on CBP Form 4647, or its electronic equivalent, to arrange proper marking or to return the released goods for marking, export or destruction (134.51(a)).
4. Marking under supervision, or a certificate. Marking, export or destruction is done under CBP supervision at the importer's expense, unless CBP accepts a certificate of marking backed by samples (134.51(c), 134.52). A false certificate can lead to seizure or a penalty under 19 U.S.C. 1592 (134.52(d)).
5. The 30-day clock on the notice. If within 30 days of the notice, or a longer period CBP allows for good cause, the importer has not marked or redelivered all the goods, CBP demands liquidated damages under the bond equal to the entered value of the articles not marked or redelivered (134.54(a)). The bond condition in 113.62(n)(1) sets the default at the value of the merchandise, or three times that value for restricted or prohibited goods.
6. Relief. A petition for relief goes to the Fines, Penalties and Forfeitures Officer under 19 CFR part 172 (134.54(b)). Relief from the full amount depends on depositing the marking duty and showing no bad faith, diligence and reasonable efforts to get the goods back (134.54(c)).

For goods in examination packages that cannot be marked where they sit, the importer can take them after depositing the estimated marking duty, and must mark, export or destroy them within a reasonable time of not more than 30 days, or they go to general order (134.53).

Which articles are excepted, and what still has to be marked?

There are two lists, and both usually leave a container to mark. Separately, the statute itself takes a few products out of the marking rules entirely, articles and containers alike: certain coffee and tea subheadings (1304(f)), a list of spices (1304(g)) and certain silk products (1304(h)), each by the HTS subheadings in force on the date the statute names.

General exceptions, 19 CFR 134.32, from 1304(a)(3). The ones that come up most on commercial entries:

The J-list, 19 CFR 134.33, from 1304(a)(3)(J): classes of articles that were imported in quantity without marking before 1937. It includes bolts, nuts and washers, screws, nails, spikes and staples, rivets, buttons, unstrung beads, ball bearings of 5/8 inch or less, wire except barbed, rope and cordage, metal bars, plates, sheets (except galvanized) and similar forms, parts for machines imported from the same country as the machine, sawed lumber, cut flowers and natural products in their natural state. The outermost container in which the article ordinarily reaches the ultimate purchaser must still be marked.

Repacking after release. Where J-list articles, or articles incapable of being marked, will be repacked for sale, 19 CFR 134.25 requires the importer to certify at entry summary that the new containers will be marked, or that it will tell the buyer or repacker in writing. Where marked articles will be repacked into retail packs such as blister packs, 134.26 requires a certificate that the new packs will not hide the mark, or will be marked themselves. A blanket certificate can cover a product for a period such as a calendar year. A missing certificate exposes the importer to the liquidated damages in 134.54(a) and to the marking duty (134.25(e), 134.26(e)).

Processing in the United States. Under 134.35, a US manufacturer that turns the imported article into a different article with a new name, character or use is itself the ultimate purchaser, so the imported article needs no mark, though its outermost containers do.

How does marking tie to what is declared on the Form 7501?

The entry summary declares origin in block 10, or in column 31 for each line on a "MULTI" entry. Marking puts the same fact on the goods. The two answers must agree whenever both use the same rule, and the audit should look for lines where they do not:

• A supplier mark that names the shipper's country. If block 10 says China and the retail pack says "Made in Vietnam", one of them is wrong, and either answer has duty consequences beyond marking.
• Goods of Canada and Mexico. Marking follows the Part 102 rules, while other measures may use substantial transformation, so a line marked "Made in Mexico" can correctly carry a different origin for another duty. Document which rule each answer used.
• "Assembled in" marks. 134.43(e) allows "Assembled in (country)" or "Assembled in (country) from components of (countries)" where final assembly decides origin. The block 10 country should be the country of final assembly in that case.

Marking duty is part of the duty liability CBP counts in a penalty case: Appendix B to 19 CFR part 171 lists marking alongside antidumping and countervailing duty when it describes materiality. A pattern of unmarked goods found in your own review is an underpayment that may call for a prior disclosure, and a pattern CBP finds first can lead to a pre-penalty notice.

How do you audit marking on past entries?

1. List the lines by product, origin and how the goods reach the buyer. For each product, note whether the article is marked, only the container, or neither, and which exception you rely on.
2. Check the J-list and exception claims. For each product treated as excepted, find the paragraph of 134.32 or the J-list entry, and confirm the outermost container is marked.
3. Check the repacking certificates. For products sold to repackers or repacked by you, confirm a certificate under 134.25 or 134.26 was filed at entry summary, or a blanket one covers the period.
4. Collect every Form 4647 and liquidated damages claim from the broker and the bond file, with the dates of entry, release, notice and response. A notice answered late is a liquidated damages exposure; a notice never answered is a bigger one.
5. Compare marks to block 10. Sample the packaging photographs or samples of your top products against the declared origin, line by line.
6. Act before liquidation. For unliquidated entries with unmarked goods still in your control, marking, export or destruction under CBP supervision avoids the 10 percent duty (1304(i)). Check each entry's status on how to check entry liquidation status. After liquidation, the duty can no longer be avoided.
7. Route underpayments. Unmarked goods already sold are a marking duty liability on entries that liquidate, and a possible disclosure. Confirm the route with a licensed customs broker or trade counsel; this page describes the rules and is not legal advice.

Where does TariffSense fit?

The audit steps above combine documents with entry data. TariffSense reads Form 7501s and broker entry exports in any layout, flags lines where declared origin and exporting country do not fit the supplier pattern on other entries, and recomputes each line's duty stack for its origin and entry date. The post-entry audit page shows what goes in and what comes back. The physical marks on the goods stay a check for your team and your suppliers.

What should you do next?

Pick the ten products with the highest import value and photograph the article, the retail pack and the shipping carton for each. Write next to each photo the origin in block 10 of the last entry and the marking exception you rely on, if any. Any product where the mark, the container and block 10 do not tell the same story is the first finding, and the post-entry audit pillar covers the rest of the line checks.