OT:RR:CTF:FTM H301495 PJG
Mr. Juan Rodriguez
Rod International
11445 Paramount Blvd. Suite A
Downey, California 90241
RE: Modification of NY N281670; Country of origin marking of cooked shrimp
Dear Mr. Rodriguez:
On January 3, 2017, U.S. Customs and Border Protection (“CBP”) issued New York Ruling Letter (“NY”) N281670 to you on behalf of your client, Pescanova, Inc. The ruling pertains to the tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”), and the country of origin marking of frozen farm raised shrimp of the litopenaeus vannamei species that are processed into three products: “Raw Peeled Shrimp”, “Cooked Peeled Shrimp”, and “Breaded Shrimp.” The National Fisheries Institute has inquired whether the country of origin decision concerning the “Cooked Peeled Shrimp” is inconsistent with an existing CBP ruling concerning the same issue. We have reconsidered NY N281670 and found that the holding is in error with respect to the country of origin marking determination concerning the “Cooked Peeled Shrimp.” Accordingly, NY N281670 is modified.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. § 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on May 29, 2019, in Volume 53, Number 17, of the Customs Bulletin. CBP received one comment in support of the proposed action.
FACTS:
In NY N281670, the subject merchandise was described as follows:
[f]rozen farm raised shrimp of the litopenaeus vannamei
species. Per the description provided, the shrimp will be
exported from India to Guatemala as frozen headless
shell-on of various sizes for further processing. The product
will be thawed, deveined and soaked in sodium tripolyphosphate
and salt. The shrimp will be processed into three products: “Raw
Peeled Shrimp” (Size 31/35), “Cooked Peeled Shrimp” (Size 31/35),
and “Breaded Shrimp” (Size 25/30).
The “Raw Peeled Shrimp” and “Cooked Peeled Shrimp”
will be individually quick frozen and packaged in a
polyethylene bag which will have a total net weight of two
pounds. Each master case for both items will contain five
bags which in turn will have a total net weight of ten pounds.
The product will be labeled “Frozen P&D Tail-Off Raw
Shrimp IQF,” and “Frozen P&D Tail-Off Cooked Shrimp
IQF,” respectively…. All products are intended for sale to
wholesalers or markets.
In NY N281670, we determined that the “Cooked Peeled Shrimp” was substantially
transformed in Guatemala and, therefore, the country of origin for marking purposes was Guatemala.
ISSUE:
Whether the process of cooking shrimp substantially transforms the shrimp for country of origin marking purposes.
LAW AND ANALYSIS:
The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C.
§ 1304(a)), 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 container) will permit in such manner as to indicate to an 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 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, 302 (1940).
Part 134 of Title 19 of the Code of Federal Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b) (19 C.F.R. § 134.1(b)) provides as follows:
(c) Country of origin. “Country of origin” means 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.
CBP has previously held that the process of cooking shrimp does not substantially transform shrimp because it “does not result in a change in the name, character or use” of the shrimp. See HQ 731763 (May 17, 1989) (citing United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (1940) (setting forth the three main factors for a substantial transformation determination). In HQ 731763, CBP stated that the name of the cooked shrimp remains unchanged because it is still “referred to as shrimp,” the character remains unchanged because it is still frozen shrimp with the same size, quality, and shape, and the use remains unchanged because cooking is a process that “merely render[s] the product ready for eating.” HQ 731763 further indicates that although the tariff classification of cooked and raw shrimp are different, that change does not alter the substantial transformation analysis. Accordingly, the country of origin for marking of the “Cooked Peeled Shrimp” in NY N281670 is India.
Foreign natural products (such as shrimp) are on the so-called “J-list” and are excepted from individual marking requirements pursuant to 19 U.S.C. § 1304(a)(3)(J) and
19 C.F.R. § 134.33. See HQ 731763 (May 17, 1989). However, 19 C.F.R. § 134.33 requires that “the outermost container in which the article ordinarily reaches the ultimate purchaser … be marked to indicate the origin of its contents.”
Section 134.1(d) of Title 19 of the Code of Federal Regulations (19 C.F.R. § 134.1(d)) defines the term “ultimate purchaser” as “generally the last person in the United States who will receive the article in the form in which it was imported.” Moreover, 19 C.F.R. § 134.1(d)(3) indicates that “[i]f an article is to be sold at retail in its imported form, the purchaser at retail is the ‘ultimate purchaser.’” NY N281670 indicates that the “Cooked Peeled Shrimp” will be packaged in a polyethylene bag with a total net weight of two pounds, and five of those bags will be placed into a master case that is intended for sale to wholesalers or markets. If the wholesalers or markets are distributing the master cases to restaurant operators for their own use, then the ultimate purchaser is the restaurant operator and only the master cases must be marked with the country of origin. See Customs Service Decision (C.S.D.) 90-42 (Jan. 11, 1990); HQ 560498 (Dec. 19, 1997). If the wholesalers or markets are selling the individual polyethylene bags of “Cooked Peeled Shrimp,” then the ultimate purchaser is the person who will purchase the individual bags of shrimp and the country of origin marking must appear on the individual bags of shrimp.
Upon publication in the Customs Bulletin, CBP received one comment in support of its proposed action concerning NY N281670. The commenter also suggested that CBP modify a sentence in NY N281670 concerning “Raw Peeled Shrimp” to avoid suggesting that the processing of the raw shell-on shrimp in the Indian facility affects the substantial transformation determination, particularly since the raw shrimp is subsequently peeled in Guatemala. CBP has considered the processing that occurred in India and determined that it does not affect the substantial transformation determination. Accordingly, we are not modifying the identified sentence because it accurately reflects that we considered the processing that occurred in India and Guatamala.
HOLDING:
The imported “Cooked Peeled Shrimp” is not substantially transformed when it is cooked in Guatemala, therefore, the country of origin for marking purposes is the country where the shrimp is raised, which is India.
Foreign natural products (such as shrimp) are on the so-called “J-list” and are excepted from individual marking requirements pursuant to 19 U.S.C. § 1304(a)(3)(J) and
19 C.F.R. § 134.33. However, “the outermost container in which the article ordinarily reaches the ultimate purchaser is required to be marked to indicate the origin of its contents.” 19 C.F.R. § 134.33. If the wholesalers or markets purchase the master cases for resale to restaurant operators for restaurant use, then the ultimate purchaser is the restaurant operator and the master cases must be marked with the country of origin. If the wholesalers or markets purchase the master cases and sell the individual polyethylene bags of shrimp, then the ultimate purchaser is the person who purchases the individual bags of shrimp and the individual bags must be marked with the country of origin.
EFFECT ON OTHER RULINGS:
NY N281670, dated January 3, 2017, is MODIFIED.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division