MAR-05 RR:CR:SM 560498 KKV
Mr. Nick Mesich
Golden West Bakery Ltd.
1111 Derwent Way
Annacis Island
Delta, British Columbia
CANADA
V3M 5R4
SUBJECT: Country of origin marking requirements
applicable to English muffins imported in bulk
and sold to restaurant operator for use in
food products; ultimate purchaser; purchase of
a service; food preparation; marking of
outermost container; 19 CFR 134.32(d)
Dear Mr. Mesich:
This is in response to your letter dated May 27, 1997,
which requests information regarding the country of origin
marking requirements applicable to English muffins imported
for sale to restaurants for use in food products.
FACTS:
You indicate that your firm, which is located in
Canada, supplies English muffins to McDonald's Restaurants,
exclusively for commercial/industrial purposes for use in
their restaurants in Washington State, Oregon, Montana,
Idaho and Alaska. In order to standardize operations, you
wish to remove labeling from the product's packaging. You
indicate that required information such as "Ingredient
Legend, Product Description, Weight, Country of Origin,
Manufacturer etc" would be continued to be provided on entry
documentation for the examination of the inspecting
officers.
ISSUE:
What are the country of origin marking requirements
applicable to English muffins imported for commercial use by
a restaurant operator?
LAW AND ANALYSIS:
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 United States 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 United States 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. The evident purpose is to mark the goods so that
at the time of purchase the ultimate purchaser may, by
knowing where the goods were produced, be able to buy or
refuse to buy them, if such marking should influence his
will." United States v. Friedlaender & Co., 27 C.C.P.A. 297
at 302; C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134),
implements the country of origin marking requirements and
the exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs
Regulations (19 CFR 134.1(b)), defines "country of origin"
as:
The country of manufacture, production,
or growth of any article of foreign
origin entering the United States.
Further work or material added to an
article in another country must effect a
substantial transformation in order to
render such other country the "country of
origin" within the meaning of this part;
however for a good of a NAFTA country,
the NAFTA Marking Rules will determine
the country of origin.
Section 134.1(j), Customs Regulations (19 CFR 134.1(j)
provides that the "NAFTA Marking Rules" are the rules
promulgated for purposes of determining whether a good is a
good of a NAFTA country. Section 134.1(g), Customs
Regulations (19 CFR 134.1(g)), defines a "good of a NAFTA
country" as an article for which the country of origin is
Canada, Mexico or the United States, as determined under the
NAFTA Marking Rules, set forth at 19 CFR 102.
In determining the country of origin marking
requirements for the imported muffins, the identity of the
"ultimate purchaser" must first be ascertained. Section
134.1(d), Customs Regulations (19 CFR 134.1(d)), provides
that:
The "ultimate purchaser'' is generally
the last person in the United States who
will receive the article in the form in
which it was imported; however, for a
good of a NAFTA country,
the "ultimate purchaser'' is the last
person in the United States who purchases
the good in the form in which it was
imported.
However, where an article is sold at retail in its imported
firm, the purchaser at retail is the ultimate purchaser (See
19 CFR 134.(1)(d)(3)).
In the case before us, a restaurant chain imports bulk
quantities of English muffins not for resale in their
imported form, i.e., bulk foodstuffs, but for use in making
food products. Although the imported articles are
eventually purchased in the U.S. by retail consumers after
having been incorporated into prepared food items, these
purchasers are essentially purchasing a service - food
preparation.
Customs has previously discussed the country of origin
marking requirements applicable to imported foodstuffs used
by a restaurant operator. In Customs Service Decision
(C.S.D.) 90-42, dated January 11, 1990, raw shrimp was
imported into the United States, where it was cooked,
peeled, deveined, frozen and repacked into master cartons
and distributed to the food service trade. Customs
determined that the imported shrimp had not been
substantially transformed by the U.S. processing and held
that the imported articles were subject the marking
requirements when repackaged, stating, "[w]hen the imported
shrimp is sold to a restaurant operator for his own use, the
restaurant operator is considered to be the ultimate
purchaser of the imported shrimp." Accordingly, it was held
that marking the country of origin on the carton in which
the restaurant operator receives the shrimp satisfies the
requirements of 19 U.S.C. 1304.
You propose to remove all marking, including country of
origin marking, from the product's packaging, stating that
you would continue to provide required information on the
Customs entry documentation. With regard to your request,
we note that section 134.32(d) of the Customs Regulations
(19 CFR 134.32(d)), exempts from the marking requirements
those articles for which the container will reasonably
indicate the origin of the articles. Therefore, inasmuch as
the restaurant operator is the "ultimate purchaser" of the
imported articles, any individual packages will not need to
be marked, provided that the outermost container or carton
in which the articles are imported and in which they reach
the restaurant operator are marked with the country of
origin. It is not acceptable to display the country of
origin marking solely on Customs entry documents.
It is important to note that this determination applies
only to the country of origin marking requirements under 19
U.S.C. 1304. It does not affect the enforcement of other
laws and regulations administered by the U.S. Department of
Agriculture, Food and Drug Administration or any other
agency of the United States Government. Inasmuch as the
removal of all labeling may impact regulatory requirements
administered by other entities, we suggest that you contact
any such agency or agencies to assure compliance with other
laws.
HOLDING:
Where English muffins are imported into the U.S. and
purchased by a restaurant operator for its own use in making
prepared food products, the restaurant operator is the
"ultimate purchaser" of the imported articles within the
meaning of 19 U.S.C. 1304. Accordingly, pursuant to 19 CFR
134.32(d), the individual packages of muffins will be
excepted from marking as to country of origin, provided the
outermost container in which the articles are imported and
in which they reach the restaurant operator is marked with
the country of origin.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered. If
the documents have been filed without a copy, this ruling
should be brought to the attention of the Customs officer
handling the transaction.
Sincerely,
John Durant
Director
Commercial Rulings Division