MAR 2-05 CO:R:C:V 732480 pmh
Mr. John F. Lemker
Burditt, Bowles & Radzius,
333 West Wacker Drive
Suite 2500
Chicago, IL 60606-1218
RE: Country of origin marking requirements for fruit juice
exported for processing and packaging and returned to the U.S.
Dear Mr. Lemker:
This is in response to your letter of June 15, 1989, on
behalf of your client, McCain Citrus, Inc., requesting a ruling
on country of origin marking requirements for fruit juice
concentrate that is manufactured in the U.S., processed in Canada
and returned to the U.S. for sale.
FACTS:
In your letter and in a telephone call with Ms. Patty Hanson
of my staff, you indicated that the fruit juice concentrate,
whether of a single type of fruit or of mixed fruit, is of U.S.
origin. Thereafter, the juice concentrate will be exported to
Grand Falls, New Brunswick, Canada, where it will be mixed with
water and packaged in containers also shipped from the U.S. The
finished product will then be returned to the U.S. for sale. No
further processing is performed before sale.
ISSUE:
Whether there has been a substantial transformation of the
fruit juice concentrate manufactured in the U.S. by the
processing operations performed in Canada, so as to render the
finished fruit juice a product of Canada.
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides in general that all articles of foreign origin
imported into the U.S., or their containers, shall be legibly and
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conspicuously marked to indicate the country of origin to an
ultimate purchaser in the U.S. U.S. products exported and
returned are specifically excepted from country of origin marking
requirements under section 134.32(m), Customs Regulations (19 CFR
134.32(m)). In applying this section, Customs has ruled that
products of the U.S. which are exported for further processing
and subsequently returned, are generally not subject to country
of origin marking upon importation to the U.S., unless the
further processing in the foreign country constituted a
substantial transformation of the product. See C.S.D. 80-15;
C.S.D. 79-443.
In defining what constitutes a substantial transformation,
Customs has held that a new and different article of commerce
having a new name, character and use must emerge from the
processing. See United States v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267, C.A.D. 98 (1940). In addition, factors such as
complexity and cost of the processing operations and whether the
essence of the article has been changed, have also been
considered. See Uniroyal Inc. v. United States, 3 C.I.T. 220,
542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983).
In National Juice Products Association v. United States, 10
C.I.T. 48, 628 F. Supp. 978 (1986), the Court of International
Trade upheld Customs' determination that orange juice concentrate
is not substantially transformed when it is processed into retail
orange juice products. The orange juice concentrate at issue in
that case underwent significant processing, was mixed with orange
essences and oils, purified and dechlorinated water and was
either packaged in cans and frozen or pasteurized and packaged in
liquid form. Customs found, and the court agreed, that such
processing did not change the fundamental character of the orange
juice concentrate and that it was the orange juice concentrate
that imparted the essential character to the final product.
According to the facts you have presented, the only activity
which takes place in Canada is the addition of water to the
concentrate and packaging. The juice concentrate undergoes less
processing than that in National Juice Products Association.
Merely adding water to the juice concentrate does not change the
fundamental character of the juice concentrate and it is the
U.S.-made concentrate that imparts the essential character to the
finished product. This case is well within the perimeters
established by Uniroyal and National Juice Products Association.
It is our opinion that no new article of commerce has emerged
from the Canadian processing and that the final product remains
the same in name, character and use.
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HOLDING:
Juice concentrate manufactured in the U.S. and exported for
processing, which consists of mixing with water and packaging as
described above, does not undergo a substantial transformation.
It remains a product of the U.S. and is exempt from the marking
requirements of 19 U.S.C. 1304 upon importation to the U.S. With
regard to fruit juice concentrate of a single type of fruit, this
holding applies only to concentrate that is wholly of U.S. origin
and would not apply to juice concentrate that is imported or that
has been mixed with any imported juice concentrate.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch