CLA-2 CO:R:C:G 085336 JBW
Ms. Elva Arzate
Account Manager
Rudolph Miles & Sons, Inc.
4950 Gateway East
P. O. Box 144
El Paso, Texas 79942
RE: Dried Flower Bouquet
Dear Ms. Arzate:
This ruling is in response to your inquiry of August 8,
1989, on behalf of American Oak Preserving Company, regarding the
classification under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA) and the country of origin of a dried
flower bouquet.
FACTS:
The sample submitted is a floral bouquet consisting of
dried flowers and foliage and artificial flowers, all wrapped in
tissue paper and bound with a paper-covered wire tie. Arranged
in the bouquet are the following components, which are
purchased from the country listed and which have undergone the
process described:
Campo Flower: Country of growth: Brazil. The flowers
are imported into the United States in bulk, sorted
cleaned, trimmed, and subjected to a forced air and
heat process to open the flower heads.
Lagurus: Country of growth: Italy. The material is
imported into the United States in bulk, cleaned, cut
to length, dyed, centrifuged, and dried by forced air
and heat.
Ruscus: Country of growth: Italy. The material is
imported into the United States in bales, cut, sorted,
graded, painted, and dried by forced air and heat.
Gypsy Grass: Country of growth: United States. The
material is trimmed, dyed, centrifuged, and dried by
forced air and heat.
Large Yarrow: Country of growth: United States. The
material is graded and cut.
Small Wood Flower: Country of manufacture: India.
The item is not subject to processing in the United
States.
The final bouquet is created in Mexico from the
components exported from the United States. While in Mexico, the
components are arranged in the bouquet, bound with a paper-
covered wire tie, trimmed, and wrapped in tissue paper that is
attached by another paper-covered wire tie.
ISSUES:
(1) What is the classification under the HTSUSA of a
floral bouquet consisting of dried flowers and foliage and
artificial flowers?
(2) Whether dried flowers and foliage of foreign
origin, which are dyed, painted, or dried in the United States,
acquire United States origin by virtue of the processes to which
they are subjected?
(3) Whether arrangement of dried flowers and foliage
and artificial flowers in a bouquet, where certain components are
of United States origin, is an assembly under subheading
9802.00.80, HTSUSA?
(4) What are the country of origin and marking
requirements for the complete floral arrangement?
LAW AND ANALYSIS:
I. Classification of the Floral Arrangement under the HTSUSA.
The General Rules of Interpretation (GRI's) set forth
the legal framework in which merchandise is to be classified
under the HTSUSA. GRI 1 requires that classification be
determined first according to the terms of the headings of the
tariff and any relative section or chapter notes and, unless
otherwise required, according to the remaining GRI's.
The dried floral arrangement consists of dried flowers,
dried foliage, and artificial flowers. These components, if
imported separately, are classified under different headings of
the tariff: dried flowers, Heading 0603, HTSUSA; dried foliage,
Heading 0604, HTSUSA; artificial flowers, Heading 6702, HTSUSA.
GRI 3 applies when goods are classifiable under two or
more headings. The Explanatory Notes, which provide the official
interpretation of the HTSUSA at the international level, define
composite goods to include goods made up of different components,
even if the components are separable, as long as they are adapted
one to the other, are mutually complementary, and together form a
whole that would not normally be offered for sale in separate
parts. The bouquet is a composite good, for the individual
components create a floral arrangement that derives its aesthetic
value from the mutually complementary positioning of the
components. Furthermore, even though the individual components
may be sold separately, the value of any individual component
appears limited when compared to the overall value of the
components when arranged together. Thus, the components may be
sold separately, but in this case, they do not appear to be of
the type normally offered for sale in separate parts.
GRI 3(b) governs the classification of composite
goods. GRI 3(b) requires classification of a composite good as
if it consists of the component that gives it its essential
character. The Explanatory Notes state that the factors
determining essential character may vary as between different
kinds of goods. The Notes suggest that essential character may
be determined by the nature of a component or material, its bulk,
quantity, weight, or value, or by the role of a constituent
material in relation to the use of the goods.
The dried flowers impart the essential character to the
bouquet. The dried flowers constitute the principal bulk,
quantity, and weight of the arrangement. Moreover, as you state
in your letter, the dried foliage and artificial flowers serve
the subordinate roles of embellishing the beauty of the
principal object, the dried flowers.
The dried flower bouquet is classified under subheading
0603.90.00, HTSUSA, as cut flowers and flower buds of a kind
suitable for bouquets or for ornamental purposes, fresh, dried,
dyed, bleached, impregnated or otherwise prepared: other. The
column one rate of duty is 5 percent ad valorem, and the bouquet
is eligible for duty-free treatment under the Generalized System
of Preferences, provided all legal eligibility requirements, as
set out in 19 C.F.R. 10.171 et seq. (1989), are met.
II. Country of Origin for Dried Flowers and Foliage that is
Dyed, Painted, or Heated in the United States.
The Campo, Lagurus, and Ruscus will be imported into
the United States and will be subjected to a dyeing, painting, or
heat process. For the purpose of determining whether these
components assume United States origin to permit the floral
bouquet to obtain special classification as articles assembled
abroad produced with United States components, the question
arises of whether these products undergo a process that results
in their substantial transformation. 19 C.F.R. 10.14(b) (1989).
A substantial transformation occurs when an article loses its
identity through processing and emerges as a new article having a
new name, character, or use. Koru North America v. United
States, 12 CIT ___, 701 F. Supp. 229, 234 (1988); see also,
Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556, 562
(1908); United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267,
273 C.A.D. 98 (1940).
The name, character, or use test has been the focus of
inquiry in numerous recent court and Customs Service decisions.
In National Juice Products, the question before the Court of
International Trade was whether imported orange juice concentrate
is substantially transformed by the mixture in the United States
of the foreign concentrate with water, orange essences, and oils,
and by repacking the mixture frozen in cans or as a liquid after
pasteurization. The court held that these processes did not
result in a new product with a new name, character, or use, for
the imported concentrate imparts the essential character of the
resulting product. National Juice Products, 10 CIT at ___, 628
F. Supp. at 978. The domestic process did not change the
"fundamental character" of the product. Id.
In a more recent case, Koru North America, the issue
before the Court of International Trade was whether a process of
thawing, skinning, boning, trimming, glazing, freezing, and
repackaging headed and gutted fish effects a substantial
transformation. The court in this case held that the processing
did effect a substantial transformation. Koru North America, 12
CIT at ___, 701 F. Supp. at 235. The name of the product changed
from "headed and gutted fish" to "individually quick-frozen
fillets." Id. Moreover, the court identified changes that "go
to the fundamental nature and character of the fish ...." Id.
Such changes in this case included a change in the shape,
marketing, and tariff classification of the product resulting
from the processes.
No prior Customs Service rulings have specifically
addressed whether dyeing, painting, or heating dried flowers or
foliage changes the country of origin for these products.
However, Customs Service rulings relating to similar processes
have been issued. In Headquarters Ruling Letter 554971, December
1, 1988, the Customs Service determined that the sorting,
grading, blending, and roasting of coffee beans does not
substantially transform the beans. Likewise, peeling,
deveining, and cooking shrimp does not effect a substantial
transformation. 23 Cust. B. & Dec. 21, 27, C.S.D. 89-101 (1989).
The process of dyeing, Headquarters Ruling Letter 079909, June 4,
1987, or of painting, Headquarters Ruling Letter 071403, August
25, 1983, have been held not to result in substantial
transformations of the products in question.
From the discussion above, we determine that the
process of dyeing, painting, or heating to which the dried
flowers and foliage under consideration are subjected does not
effect a substantial transformation and consequently does not
make the United States the country of origin for these products.
The products through the processing do not assume a new name.
The process of dyeing, painting, or heating clearly imparts
physical changes to the items thereby making them more suitable
for retail sale. However, the fundamental character of the
products is not changed by the processing. Both before and after
processing, it is the imported product that imparts the essential
character to the final product. Finally, the ultimate use of the
product is not changed by the processing. Although the flowers
or foliage may have little or no aesthetic value before
processing, they will always be used, if used at all, as dried
flowers or foliage.
In sum, the process of dyeing, painting, or heating the
dried flowers or foliage are minor processes that leave the
identity of the imported products intact. The country of origin
for the Campo, Lagurus, and Ruscus will not change by virtue of
the processes performed in the United States.
III. Articles Assembled Abroad from United States Components.
The Gypsy Grass and Large Yarrow are grown and dried or
dyed in the United States. Subheading 9802.00.80, HTSUSA,
provides for special classification of articles assembled abroad
from United States components. More specifically, this
subheading includes:
Articles assembled abroad in whole or in part of
fabricated components, the product of the United
States, which (a) were exported in condition ready for
assembly, (b) have not lost their physical identity in
such articles by change in form, and (c) have not been
advanced in value or improved in condition abroad
except by being assembled and except by operations
incidental to the assembly process such as cleaning,
lubricating, and painting.
The process of arranging the bouquet and joining the
separate components together by a paper covered wire is an
"assembly" for the purpose of subheading 9802.00.80, HTSUSA. As
defined in the regulations, an assembly consists of "any method
used to join or fit together solid components, such as ... the
use of fasteners[.]" 19 C.F.R. 16(a) (1989). Furthermore, the
trimming of the bouquet is an operation incidental to assembly
and therefore does not constitute further fabrication. 19
C.F.R. 10.16(b)(4) (1989).
Consequently, the United States goods, specifically the
Gypsy Grass and the Large Yarrow, which are assembled into the
bouquet in Mexico, are entitled to the benefits of subheading
9802.00.80, HTSUSA. As a result, the duty on the imported dried
flower bouquet is placed on the full value of the imported
article, minus the cost or value of the components of United
States origin.
IV. Country of Origin and Marking Requirements for the Imported
Dried Flower Bouquet.
Section 304 of the Tariff Act of 1930, as amended, 19
U.S.C.A. 1304 (West Supp. 1989), requires that every article
imported into the United States, subject to specific exceptions,
be marked to indicate the country of origin to the ultimate
purchaser in the United States. The Customs Regulations except
articles assembled abroad in whole or in part from United States
components from the normal country of origin marking requirements
and direct that such products are considered products of the
country of assembly for country of origin marking purposes. 19
C.F.R. 10.22 (1989). The country of origin for marking purposes
for the dried flower bouquet is therefore Mexico. The bouquet
may be marked "Mexico," "Product of Mexico," "Assembled in Mexico
from United States and foreign components," or other similar
phrases.
HOLDING:
The dried flower bouquet is classified under subheading
0603.90.00, HTSUSA, as cut flowers and flower buds of a kind
suitable for bouquets or for ornamental purposes, fresh, dried,
dyed, bleached, impregnated or otherwise prepared: other. The
rate of duty is 5 percent ad valorem, and the product is eligible
for duty-free treatment under the Generalized System of
Preferences provided the legal eligibility requirements, as set
out in 19 C.F.R. 10.171 et seq. (1989), are met.
The components of United States origin, which are
assembled into the final product in Mexico, are entitled to the
benefits of subheading 9802.00.80, HTSUSA. The duty is assessed
against the full value of the imported article, less the cost or
value of such products of the United States. Finally, the
country of origin for the imported articles, for the purpose of
marking, is Mexico.
Sincerely,
John Durant, Director
Commercial Rulings Division