MAR-2-05 CO:R:C:V 734558 RSD
Ms. Margaret Solinger
E.I. Dupont de Nemours & Co., Inc.
Wilmington, Delaware 19898
RE: Country of origin marking requirements for herbicide in
soluble film, substantial transformation, products of U.S.
exported and returned; 19 CFR 134.35, 19 CFR 134.32(m)
Dear Ms. Solinger:
This is in reference to your letter of March 24, 1992,
concerning the country of origin marking for a herbicide known as
accent. On June 16, 1992, Customs issued a ruling, HQ 556616,
with respect to the applicability of the duty exemptions under
subheadings 9801.00.10 and 9802.00.50, Harmonized Tariff Schedule
of the United States (HTSUS). This ruling will address the
country of origin marking issue raised in your letter.
FACTS:
E.I. Dupont de Nemours & Co. Inc. is a domestic manufacturer
of various agricultural chemical products including the
herbicide, "Accent." Accent is a post-emergence herbicide
intended for use on field corn. It is a water dispersible
granule containing 75% active ingredient by weight. Accent
causes moderate eye irritation and is harmful when absorbed
through the skin. Users are cautioned to avoid contact with
skin, eyes and clothing.
Because of the potential hazards of accidental contact with
a user's eyes or skin, you intend to export U.S. made Accent to
France for incorporation into a water-soluble film. This film is
a highly specialized plastic designed for compatibility with
agricultural chemical and applications technology. The
incorporation process will enable a grower to drop a pre-
measured, sealed, water-soluble packet of Accent into a
designated amount of water, where the film will dissolve, and the
Accent disperse.
The Accent which you intend to export for the above-
described purpose will be manufactured at your El Paso, Illinois
facility. The herbicide will be transported in bulk in drums to
your subsidiary in France ("Ducotech"). Ducotech has contracted
with Nedi, an unrelated French concern in Les Mannes, France to
perform the processing. Nedi was chosen because it possesses the
technology and equipment necessary to assure product safety,
quality and exact dosage application.
In France, Nedi will place the Accent in what is commonly
referred to as a "form and fill" machine, which will incorporate
the Accent into 3.3 oz. water soluble pouches. Four of the 3.3
oz. water soluble film pouches will be inserted into one barrier
pouch. The barrier pouches are composed of aluminum between a
layer of polyethylene plastic, which protects the film and its
contents from adverse conditions such as humidity. The barrier
pouch is then heat-sealed and placed in a carton along with
eleven other inner cartons which are packed in a shipping carton.
You state that all of the Accent will be returned to the U.S.
You further indicate that the process whereby the Accent is
incorporated into the pre-measured water soluble film does not
change the chemical structure or use of the product. The
identities and properties of the herbicide remain intact.
ISSUE:
Does the U.S. made herbicide, Accent, encapsulated in a
water soluble film have to be marked with its country of origin?
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.
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).
By definition, only merchandise which is "of foreign
origin," i.e., of a country of origin other than that of the
U.S., is subject to the requirements of 19 U.S.C. 1304. Stated
differently, products of the U.S. are not subject to these
requirements. 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 U.S. 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 the marking laws and
regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in
manufacture which results in an article having a name, character
or use differing from that of the constituent article will be
considered substantially transformed.
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)). With
certain exceptions not applicable here, Customs has ruled that
products of the U.S. which are exported for further processing
and subsequently returned, are 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 HQ 732480, (July 31, 1989).
It is therefore necessary to determine whether the U.S. made
Accent was substantially transformed when it was incorporated
into the water soluble film in France. In our previous ruling on
this product, HQ 556616, June 16, 1992, Customs determined that
the imported Accent is eligible for the duty exemption under
HTSUS subheading 9802.00.50 for articles returned to the U.S.
after having been exported for repairs or alternations. In the
ruling, we noted that the application of this tariff provision is
precluded in circumstances where the operations performed abroad
destroy the identity of the article or create a new or
commercially different article. In applying this tariff
provision to facts of this case, we stated that the operations
performed in France do no have the effect of destroying the
identity of the herbicide or changing its chemical composition.
We further explained that the foreign operations do not result in
any significant change in the character or use of the herbicide,
and the overseas process merely facilitates the use of the
herbicide and making it safer for the consumer. In other words,
the product is not substantially transformed by the processing
that will be done in France, and therefore it remains a product
of the U.S. when it is imported into the U.S. Accordingly, under
19 CFR 134.32(m) the imported Accent is excepted from the country
of origin marking requirements of 19 U.S.C. 1304. HOLDING:
Because the imported herbicide, Accent, is not substantially
transformed when it was incorporated in the soluble film, it
remains a product of the U.S. and it is excepted under 19 CFR
134.32(m) from the country of origin marking requirements of 19
U.S.C. 1304.
Sincerely,
John Durant, Director
Commercial Rulings Division