MAR 2-05 CO:R:C:V 733162 NL
Mr. Robert Pietrangelo
Harbor Seafood, Inc.
969 Lakeville Road
New Hyde Park, NY 11040
RE: Country of Origin Marking - Processed Crab and Shelled
Crabmeat
Dear Mr. Pietrangelo:
This is in response to your letters of January 30 and
February 15, 1990, in which you request a ruling concerning the
country of origin marking of U.S.-origin crab which is processed
in Korea.
FACTS:
Harbor Seafood, Inc. proposes import transactions which
would begin with frozen Alaskan Snow Crab Clusters (one half of a
cooked crab) caught by U.S.-flag vessels. The product would be
shipped to Korea for processing in one of two ways. First,
"single cuts" would be created by cutting a Cluster between each
of the legs. For shipment to the U.S. the single cuts would be
packed in 10-lb master cartons bearing a product description and
the name of the importer. Second, the edible meat would be
extracted from the bodies and legs of the Cluster and packed in
5-lb frozen blocks. The blocks in turn are to be packed in 30-lb
master cartons. The master cartons would be marked with the name
of the importer and a description of the product.
It is your position that neither the processing of the
Clusters into single cuts nor the extraction of meat from the
shells for shipment in frozen block would affect the origin of
the crab and crabmeat for purposes of country of origin marking,
and that it would be appropriate to mark the packages, "Product
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of U.S.A."
ISSUE:
What is the required country of origin marking of the crab
and shelled crabmeat?
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 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.
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304. As defined in 19 CFR 134.1(b), "country of origin"
means the country of manufacture, production, or growth of any
article of foreign origin entering the U.S. Further work or
material added to an article in another country must effect a
"substantial transformation" within the meaning of 19 CFR 134.35
in order to render such other country the country of origin. A
subtantial transformation is said to occur when, after
manufacture, a new article emerges having a different name,
character, or use from the original article.
A specialized rule governs seafood articles such that,
unless the animal was caught or harvested within the territorial
waters of a country, the country of origin follows the flag of
the catching vessel. This rule of origin, the "Law of the
Flag", recently was reaffirmed by the Court of International
Trade in Koru North America v. United States, 701 F. Supp. 229
(CIT 1988). Thus, in the instant situation crab caught by U.S.-
flag vessels is deemed to be of U.S. origin. It is assumed that
none of the crab which is the subject of this ruling was caught
in the territorial waters of a country other than the U.S.
The question presented is whether the processing of the
crab in Korea effects a substantial transformation such that it
becomes a product of that country prior to its return to the U.S.
In general, when considering the extent of processing necessary
to effect a substantial transformation of crab, Customs has
followed other precedents with respect to food products which
have found no substantial transformation to result from such
processing as cutting, freezing, cooking, thawing, sorting,
blending, pasteurizing, grading, and packaging. See, e.g., HQ
729365 (June 2, 1985, published as C.S.D. 86-26)(cutting,
blanching, packaging, and freezing of broccoli); and HQ 731763
(May 17, 1989)(cooking, peeling, deveining, and freezing of
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shrimp). Regarding crab meat, in HQ 732337 (August 16, 1989)
Customs ruled that thawing, sorting, blending with domestic
product, canning, and pasteurization do not effect a substantial
transformation. In HQ 732939 (October 9, 1990), Customs ruled
that cleaning, cutting off legs, boiling, blast freezing, and
packaging did not change the country of origin of crab caught by
U.S.-flag vessels.
In that latter ruling we cited with approval HQ 109504
(August 12, 1988), affirmed by HQ 109793 (May 31, 1989), which
considered the extent of crab processing necessary to yield a new
and different product under the coastwise laws. HQ 109504 ruled
that partially processed crab which was later fully processed
aboard a foreign flag vessel was not changed to a new and
different article except when the meat was largely or wholly
removed from the shell. Although decided under the coastwise
laws, it is our opinion that the distinction drawn in HQ 109504
between processed crab largely in the shell and shelled crabmeat
is valid, and that the shelling of crab to produce crabmeat does
result in a substantial transformation. A similar distinction
guided the Court of International Trade in Koru North America,
supra, in which it determined that the processing of headed and
gutted fish in Korea by thawing, skinning, boning, trimming,
refreezing, and packaging effected a substantial transformation
of headed and gutted Hoki fish into individually quick frozen
fillets, changing the name and character of the article.
Similarly, the character and use of the crab are significantly
changed by shelling. Once shelled, the crabmeat is an entirely
different product than crab clusters. Once removed from the
shell, the crabmeat no longer possesses the essential shape of a
crab and has a different use. cf. HQ 731472 (June 23,
1988)(peeling of shrimp not a substantial transformation, but
rather creates only a minor change in the appearance and use of
the shrimp.)
In addition, it is noted that the Harmonized Tariff Schedule
of the United States (HTSUS), under subheading 0306.20, provides
differential treatment for "Crabmeat" as opposed to
"crabs...other", in that the latter article is free of duty while
crabment is subject to a duty of 7.5 percent ad valorem.
Finally, while it is our conclusion that the unshelled crab
is not subject to the country of origin marking requirements of
19 U.S.C. 1304 and 19 CFR Part 134, it is beyond Customs'
authority to rule on the legality of the marking "Product of
U.S.A." For advice on that question it is suggested that you
consult the Federal Trade Commission and/or the National Marine
Fisheries Service.
HOLDING:
Crab taken by U.S.-flag vessels and processed in Korea does
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not acquire a foreign origin unless fully shelled. If shelled,
the crabmeat must be marked as an article of foreign origin in
accordance with the requirements of 19 U.S.C. 1304 and 19 CFR
Part 134.
Sincerely,
John Durant, Director
Commercial Rulings Division