• HQ 560855
• Jul 08, 1998

• Type : Marking • HTSUS :
•  Related:   559984; 558647; 735482; 734544; 734505   

MAR-2-05 RR:CR:SM 560855 KSG

Port Director
U.S. Customs Service
Nogales, Arizona

RE: Article 509; country of origin marking; disjunctive; and/or; salad mixes; 19 CFR 102.11(b); 19 CFR 102.11(c); Internal Advice

Dear Director:

This is in reference to a letter of February 10, 1998, and follow-up letters of February 18, 1998, February 24, 1998, February 27, 1998, March 12, 1998, April 22, 1998, June 30, 1998, and July 7, 1998, from counsel requesting a binding country of origin marking ruling on behalf of Natural Selection Foods, a company that imports produce from Mexico and sells it in packaged salad mixes. Because this matter is currently pending at your port, it will be treated as a request for Internal Advice.

FACTS:

Natural Selection Foods (“NSF”) sells packaged salad mixes both to retail accounts for ultimate sale to consumers and to food service accounts. The packaged salad mixes contain a variety of products, including fresh produce, in the same bag. NSF provided several examples of its products. For instance, the “fresh herb salad mix” contains baby lettuce leaves, radicchio, frisee, baby red chard, dill, Italian parsley, and cilantro. The “Caesar salad” contains chopped romaine lettuce, croutons, and dressing. The “organic baby spinach” contains spinach leaves, salad dressing, and peanuts.

The produce is sourced from several locations in California, Arizona, and Mexico. The sourcing locations for various vegetables vary on a daily basis. Thus, the produce in a particular bag may be sourced entirely from the U.S., or from Mexico, or from both countries. All non-produce items included in the salad mixes, such as the salad dressing, peanuts, and croutons are of U.S. origin. Counsel states that the various items in the fresh herb salad mix are generally either sourced entirely from the U.S. or sourced in part from Mexico. We are dealing in this ruling request only with those salad mixes that contain some or all Mexican produce.

The Mexican produce is imported in bulk and is not packaged at the time of importation. The salad mixes are processed and packaged in either the U.S. or in Canada. Some of the salad mixes processed and packaged in Canada are imported into the U.S.

The U.S. processing of the vegetables, which is done either in California or Arizona, includes: checking the produce for quality; mechanical sorting; and cooling the vegetables at a storage facility. The romaine, frisee, and radicchio have their cores taken out, the leaves trimmed and then the produce is passed through a precision slicer according to the specifications for that product. The various vegetables are then blended together, inspected and triple-washed in a chlorine and citric acid balanced wash. After washing, the salad mix is passed through mechanical centrifuge dryers to dry it.

The product is then mechanically packaged in bags and salad dressing packages or other condiments are added as necessary for the particular type of salad mix. Then, the salad mix is passed through metal detection equipment and packed into cartons for shipment.

NSF has been marking the individual bags as “Produce of U.S.A.” even when there is Mexican produce included in the bag. The United States Department of Agriculture has contacted NSF regarding a possible violation of the Perishable Agricultural Commodities Act of 1930. NSF wants to be advised by the Customs Service regarding what marking will comply with the Customs Service labeling requirements. Specifically, NSF asks whether the packaged salad mixes may be marked “Product of the U.S.A. and/or Mexico Processed in U.S.A.” or “Product of the U.S.A. and/or Mexico Packaged in U.S.A.”

With respect to its currently labeled packaged produce, in a letter dated February 24, 1998, NSF asked if it may use stickers to mark the goods and whether such stickers must completely cover the phrase “Produce of U.S.A.”

In a letter dated April 22, 1998, NSF informed Customs that it has bought equipment and will be labeling the bags, “Product of U.S.A. and Mexico Processed in the U.S.A.” If only Mexican produce is being used, it will label the bags “Product of Mexico Processed in the U.S.A.” ISSUE:

What are the country of origin marking requirements for the three imported packaged salad mixes containing U.S. and/or Mexican produce?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930 (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 of 19 U.S.C. 1304.

1. Country of origin of the packaged salad mix

The language of 19 U.S.C. 1304 only requires marking for goods of foreign origin; therefore, Customs would not require marking the country of origin of U.S. goods. The first issue to be considered in this case is whether there must be a marking on the packaged salad bags to indicate that the bag contains Mexican produce. This issue relates to the scenario where Mexican produce is used solely or mixed with U.S. produce and U.S. non-produce goods such as salad dressing, peanuts and/or U.S. origin croutons in the packaging.

A good of a NAFTA country is defined in 19 CFR 134.1(g) as an article for which the country of origin is Canada, Mexico, or the United States as determined under the NAFTA Marking Rules. The NAFTA Marking Rules are defined in 19 CFR 134.1(j) as the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Accordingly pursuant to 19 CFR 134.35(b), a good of a NAFTA country which is to be processed in the U.S. in a manner that would result in the good becoming a good of the U.S. under the NAFTA Marking Rules is excepted from marking. Unless the good is processed by the importer or on its behalf, the outermost container of the good shall be marked in accord with this part.

The NAFTA Marking Rules are set forth at 19 CFR Part 102. Section 102.11, Customs Regulations (19 CFR 102.11), sets forth the required hierarchy for determining the country of origin under the Marking Rules. Paragraph (a) of this section states that the country of origin of a good is the country in which:

(1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.

“Foreign material” is defined in 19 CFR 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the ingredients are of both U.S. and Mexican origin. Since an analysis of sections 102.11(a)(1) and 102.11(a)(2) will not yield a country of origin determination, we look to section 102.11(a)(3).

Section 102.11(a)(3) provides that the country of origin is the country in which “each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 CFR 102.20 and satisfies any other applicable requirements of that section....”

Each foreign material must be separately analyzed under 19 CFR 102.11(a)(3). The Caesar salad mix appears to be classified at subheading 0705.19.20 or 0705.19.40, HTSUS. The applicable tariff shift rule found in section 102.20(b) provides as follows:

HTSUS Tariff Shift and/or other requirements

0701-0709 .....A change to heading 0701 through 0709 from any other chapter.

The only foreign material in the Caesar salad mix is the romaine lettuce, which is classified at subheading 0705.19.20 or 0705.19.40, HTSUS. Since this is the same classification as the Caesar salad mix, the tariff shift rule is not satisfied. The spinach salad appears to be classified at subheading 0709.70.00, HTSUS. The applicable tariff shift rule is set forth above. The only foreign material in the spinach salad is the spinach, which is classified at subheading 0709.70.00, HTSUS. Since this is the same classification as the spinach salad, the spinach does not undergo the requisite tariff shift.

With regard to the fresh herb salad, it appears to be classified at subheading 0709.90, HTSUS. The applicable tariff shift rule is set forth above. The foreign materials in this mixture may include lettuce, which is classified at subheading 0705.11, HTSUS, radicchio and frisee, which are classified at subheading 0705.29, HTSUS, and red chard, fresh parsley, fresh cilantro, and/or fresh dill, which are classified at subheading 0709.90, HTSUS. Since all the potential foreign materials are classified in chapter 7, HTSUS, none of them undergo the applicable tariff shift.

Accordingly, since the foreign materials in the above salad mixes do not undergo the requisite tariff shift requirement of 19 CFR 102.20, the country of origin of the products cannot be determined pursuant to 19 CFR 102.11(a)(3). It appears that the Caesar salad and the spinach salad are classified as a set pursuant to General Rule of Interpretation (“GRI”) 3 and the fresh herb salad is classified as a mixture pursuant to GRI 3. Section 102.11(b) is not applicable for determining the origin of goods that are classified as a “set.” However, since the fresh herb salad mix appears to be classified as a mixture, 19 CFR 102.11(b) of the hierarchial rules must be applied. Section 102.11(b) provides:

Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a), (1)the country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good.... When determining whether a single material imparts the essential character to a good under 19 CFR 102.11, 19 CFR 102.18(b)(1) provides that only domestic and foreign materials that are classified in a tariff provision from which a change is not allowed shall be taken into consideration and that in deciding among these materials, consideration is given to various factors, including the nature of each material, such as its bulk, quantity, weight, or value, and the role of each material in relation to the use of the good.

The materials that are classified in a tariff provision (i.e., Chapter 7 subheadings) from which a change is not allowed in the fresh herb salad mix are : lettuce; radicchio and frisee; red chard, fresh parsley, fresh cilantro and fresh dill. Therefore, each of these materials must be considered for purposes of determining whether a single one imparts the essential character for the good. The lettuce, radicchio and frisee, and red chard, fresh parsley, fresh cilantro and fresh dill all appear to be equally important in making up a product that is marketed as a “fresh herb salad.” There is no indication that the nature of any single material imparts the essential character to the fresh herb salad. Therefore, the country of origin of the fresh herb salad cannot be determined pursuant to 19 CFR 102.11(b)(1).

Where the country of origin cannot be determined under 19 CFR 102.11(a) or (b), and the article is specifically described in the Harmonized System as a set or mixture, or classified as a set, mixture, or composite good pursuant to General Rule of Interpretation 3, 19 CFR 102.11(c) is the rule which must then be applied. Under this rule, the country of origin is the country or countries of origin of all materials that merit equal consideration for determining the essential character of the good. All of the materials of the set or mixture, foreign and domestic, which merit equal consideration, must be considered. In Treasury Decision (“T.D.”) 94-4, dated December 17, 1993, Customs gave an example of a determination of origin pursuant to section 102.11(c).

For example, the countries of origin of a cutlery and dinnerware packaged set from Mexico, which includes 12 knives from Mexico, 12 forks from Korea, 12 spoons from Taiwan, and a plastic case from Japan would be as follows: Mexico, Taiwan and Korea. The plastic case from Japan did not merit equal consideration in determining the essential character of the set. With regard to the Caesar salad mix, the romaine lettuce, salad dressing and croutons are the materials that merits equal consideration for determining the essential character of the good. As stated above, the country of origin of the romaine lettuce may be Mexico. The country of origin of the croutons and salad dressing will be the U.S. Therefore, in conformity with the example set forth in T.D. 94-4, if all or some of the romaine lettuce is sourced from Mexico, the countries of origin of the set is Mexico and the U.S. Since the components from the U.S. are not required to be marked with their country of origin pursuant to 19 U.S.C. 1304, it is not required by Customs that the marking include the U.S.

With regard to the spinach salad mix, the spinach, peanuts, and salad dressing are the materials that merit equal consideration for determining the essential character of the good. The peanuts and salad dressing are sourced in the U.S. Therefore, if all or some of the spinach is sourced from Mexico, the countries of origin of the set will be Mexico and the U.S. As stated above. the U.S. marking is not required by 19 U.S.C. 1304.

With regard to the fresh herb salad, all the materials merit equal consideration for determining the essential character of the good. Therefore, if any produce is sourced from Mexico, the country of origin of the set will include Mexico. If some of the produce is also sourced from the U.S., the U.S. is also a country of origin. As stated above. however, the U.S. marking is not required by 19 U.S.C. 1304.

2. Country of origin marking requirements

Fresh vegetables, fruits, nuts, and berries which are in their natural state or not advanced in any manner further than is necessary for their safe transportation are excepted from individual country of origin marking pursuant to 19 U.S.C. 1304(a)(3)(J) and 19 CFR 134.33, known as the “J-List.” The J-List excepts from country of origin marking articles which were not required to be marked during the five-year period prior to 1937. However, the outermost container in which such article ordinarily reaches the ultimate purchaser is required to be marked to indicate the origin of the goods. See 19 U.S.C. 1304(b) and 19 CFR 134.33. For example, in Headquarters Ruling Letter (“HRL”) 559984, dated November 4, 1996, Customs ruled that imported grapes from Chile must be marked with the country of origin on the polyethylene sleeves in which the grapes are sold at retail.

If articles on the J-List are repackaged after importation, 19 CFR 134.25 requires that the importer certify to the port director that if the importer does the repacking, the new container will be marked to indicate the country of origin. The importer will also certify that he or she will notify a subsequent purchaser or repacker that any repacking must conform to the marking requirements.

Section 102.12, Customs Regulations (19 CFR 102.12) provides that:

When fungible goods of different countries of origin are commingled the country of origin of the goods:

(a) Is the country or countries of origin of those commingled goods; or

(b) If the good is fungible, has been commingled, and direct physical identification of the origin of the commingled good is not practical, the country or countries of origin may be determined on the basis of an inventory management method provided under the appendix to Part 181 of the Customs Regulations.

Section 102. 1(f), Customs Regulations (19 CFR 102.1(f)), defines fungible goods or fungible materials as “goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical.” The term “commingled” is defined in 19 CFR 102.1(b) as “physically combined or mixed.”

Customs ruled in HRL 558647, dated November 30, 1994, that U.S. and Canadian barley commingled and packaged together can be marked “Product of U.S.A. and Canada.” The marking “Product of U.S.A. and/or Canada” was determined to be unacceptable because it does not indicate the actual country of origin of the imported article. Further, Customs concluded that if the barley was solely of Canadian origin, the bag must be marked “Product of Canada.” If the barley was solely of U.S. origin, there were no country of origin marking requirements for Customs purposes. HRL 558647 also cited Customs Service Decision (“C.S.D.”) 89-111, dated April 20, 1989, which involved tablets made in West Germany or the U.S. The tablets would always be only from the U.S. or West Germany. The importer wanted to mark the package, “Tablets made in West Germany or the United States.” Customs concluded that since the tablets would always be solely from the U.S. or West Germany, the marking must indicate the West German origin of the tablets. When the tablets were only of U.S. origin, no country of origin marking would be required by 19 U.S.C. 1304. Pursuant to 19 CFR 134.33, the imported produce and nuts packed in the salad mix bags are excepted from individual marking but the bags in which the salad mixes are contained must be marked with their country of origin. As discussed above in HRL 558647, when U.S. and Canadian barley were commingled and packaged together, a marking listing both countries was held to be acceptable. Consistent with the analysis of HRL 558647, if Mexican and U.S. produce are commingled and packaged together in the salad mix, the marking “Product of U.S.A. and Mexico” on the bag will be acceptable for purposes of 19 U.S.C. 1304.

As discussed in HRL 558647, HRL 735482, dated April 4, 1995, HRL 734544, dated July 24, 1992, and HRL 734505, dated August 27, 1992, Customs policy is that in most circumstances, it is not acceptable for purposes of 19 U.S.C. 1304 to mark an article in the disjunctive with the legend “Product of _________ or ________” since this does not indicate the actual country of origin of the imported article as required by 19 U.S.C. 1304. Therefore, the marking “Product of the U.S.A. and/or Mexico” is not acceptable for purposes of 19 U.S.C. 1304.

Where the produce is solely of Mexican origin, marking to indicate the Mexican origin of the produce is required by 19 U.S.C. 1304. See C.S.D. 89-111. Where the produce is solely of U.S. origin, no country of origin marking is required by 19 U.S.C. 1304. Whether or not the inclusion of the “U.S.” in the marking is acceptable is within the jurisdiction of the Federal Trade Commission (“FTC).

3. Special Marking Requirements

NSF also asked if the bags could be marked “Product of U.S.A. and Mexico Processed in the U.S.A.” or “Product of U.S.A. and Mexico Packaged in U.S.A.,” assuming that Mexico and the U.S. are the countries of origin of the packaged salad mix. Section 134.46, Customs Regulations (19 CFR 134.46) provides:

In any case in which the words “United States,” or “American,” the letters “U.S.A.,” any variation of such words or letters, or the name of any city or location in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced appear on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchase as to the actual country of origin of the article, there shall appear legibly and permanently in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by “Made in,” “Product of,” or other words of similar meaning.

Therefore, we must determine whether the proposed marking may mislead or deceive the ultimate purchaser as to the actual country of origin of the imported article. We find that the proposed phrase “Processed in the U.S.A.” or the phrase “Packaged in the U.S.A.” is a reference to the U.S. made in the context of a statement relating to an aspect of the production of the imported article and this reference may mislead or deceive the ultimate purchaser in the U.S. as to the article’s actual origin. Therefore, the special marking requirements of 19 CFR 134.46 are triggered.

The words “Made in (country of origin,)” “Product of (country of origin) or a similar phrase must appear in close proximity and in at least a comparable size to the U.S. reference . Your proposed marking would be acceptable under 19 CFR 134.46 since the phrase “Product of” precedes the country of origin and such marking would appear next to the processing information. We note, as stated above, that the issue of whether the statement “Processed in the U.S.A.” or the statement “Packaged in the U.S.A.” may be placed on the bag is within the jurisdiction of the FTC, not the Customs Service, and we take no position on that question.

4. Permanence issue

Stickers may be used to mark the bags if the stickers comply with the permanence and conspicuousness requirements of 19 CFR 134.41(b). Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), requires that the marking be conspicuous enough so that an ultimate purchaser will be able to find the marking easily and read it without strain. The degree of permanence of the marking should be at least sufficient to insure that in any reasonably foreseeable circumstance, the marking shall remain on the article until it reaches the ultimate purchaser unless it is deliberately removed. The marking must survive normal distribution and store handling. We note that stamping the country of origin on the bags would appear to satisfy the permanence requirements. If the marking is clear and could be read without strain, it would also satisfy the conspicuousness requirements.

Finally, with regard to the outer box, it is not required to be marked with the country of origin of the imported produce if the individual bags of salad mix are marked with their country of origin and the ultimate purchaser will receive the imported produce in the individually marked bags.

HOLDING:

Pursuant to 19 CFR 102.11(c), the country of origin of the Caesar salad is Mexico and the U.S. if it contains imported Mexican romaine lettuce. Pursuant to 19 CFR 102.11(c), the country of origin of the baby spinach salad is Mexico and the U.S. if it contains imported Mexican spinach. Pursuant to 19 CFR 102.11(c), the country of origin of the fresh herb salad is Mexico and the U.S. if it contains both imported Mexican produce and U.S. produce.

Where the produce in the salad mix and the condiments are solely of U.S. origin, no country of origin marking is required by 19 U.S.C. 1304.

The use of the disjunctive marking “Product of the U.S.A. and/or Mexico” on the packaged imported salad mixes is not acceptable for purposes of 19 U.S.C. 1304.

If the country of origin of the packaged salad mix is Mexico and the U.S., the marking “Product of U.S.A. and Mexico” on the individual packaged salad bags is acceptable for purposes of 19 U.S.C. 1304.

The markings “Product of U.S.A. and Mexico Processed in the U.S.A.” and “Product of U.S.A. and Mexico Packaged in the U.S.A.” satisfy the requirements of 19 CFR 134.46 and 19 U.S.C. 1304.

Stickers may be used to mark the bags only if the stickers comply with the permanence and conspicuousness requirements of 19 CFR 134.41(b).

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,


John Durant, Director
Commercial Rulings Division