MAR-2-05 CO:R:C:V 732939 NL
Michael K. Tomenga, Esq.
McKenna, Conner & Cuneo
1575 Eye Street, N.W.,
Washington, D.C., 20005
RE: Country of Origin Marking of Crab Caught by U.S. Flag
Vessels in the Soviet Exclusive Economic Zone
Dear Mr. Tomenga:
This is in response to your letter of December 5, 1989, on
behalf of Marine Resources Company International (Marine
Resources), in which you request a ruling concerning the country
of origin marking requirements applicable to crab imported by
Marine Resources.
FACTS:
Marine Resources will import crab processed from crab
caught by U.S. flag vessels in the Exclusive Economic Zone (EEZ)
of the Soviet Union. Prior to importation the crab will be
processed aboard either the U.S. flag catching vessels or Soviet
flag processing vessels by cleaning, cutting the legs from the
body, boiling, blast freezing and packaging. After importation
the crab will be sorted, graded, and repackaged in 20 pound
cartons by the importer.
It is your contention that it would be proper to mark the
containers of the repacked crab "Product of U.S.A.", since the
crab was caught on the high seas by U.S. flag vessels and the
processing, if any, aboard a Soviet-flag vessel does not render
the crab a product of the Soviet Union.
ISSUE:
Is the imported crab subject to the country of origin
marking requirements of 19 U.S.C. 1304?
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
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place as legibly, indelibly, and permanently as the nature of the
article (or 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. Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), defines "country of origin" as the country of
manufacture, production, or growth of the imported article.
Further work or material added to the article must effect a
substantial transformation in order to render such other country
the "country of origin". 19 CFR 134.1(a) provides that for
purposes of the country of origin marking requirements, "country"
means the political entity known as the nation.
The question at hand is substantially controlled by the
decision of the Court of International Trade in Koru North
America v. United States, 12 CIT ___, 701 F. Supp. 229 (1988).
In Koru the CIT reaffirmed the special rule of origin applicable
to fish which provides that on the high seas the country of
origin of fish is determined by the flag of the catching vessel.
See, Procter & Gamble Mfg. v. United States, T.D. 45099 (1931),
aff'd, 19 CCPA 415, C.A.D. 3488, cert. denied, 287 U.S. 629
(1932). In Koru the Court further found that the fact that fish
were caught in the EEZ of New Zealand did not affect the
applicablility of this rule for purposes of country of origin
marking. A nation enjoying preferential fishing and other rights
within its EEZ does not, under the United Nations Convention on
the Law of the Sea (UNCLOS), enjoy full sovereign territorial
rights within its Zone; "...certain elements of the high seas are
retained in an EEZ." 701 F.Supp 232. Thus, "it would be
improper to characterize fish caught within a country's EEZ as
originating within that country on the basis of their being
caught within the EEZ." id.
In this instance, applying the holding above, the fact that
crab was caught in the Soviet EEZ is of no legal significance.
The Soviet EEZ is not, for purposes of country of origin
marking, Soviet territory, but rather is considered the high
seas. Therefore, applying the traditional rule, if the flag of
the catching vessel is U.S., the crab is considered a product of
the U.S.
If, however, the crab is substantially transformed in
another country prior to importation into the U.S., it becomes a
product of that country. 19 CFR 134.1(b). The processing of the
crab on a Soviet flag vessel as described in your letter is not,
in our opinion, a substantial transformation. The cleaning,
cutting, boiling, blast freezing and packing of the crab does not
result in a change in the name, character or use of the crab.
Such processing of food is similar to the cutting, blanching,
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packaging and freezing of broccoli (HQ 729365)(June 2, 1985,
published as C.S.D. 86-26); and the cooking, peeling, deveining
and freezing of shrimp (HQ 731763, May 17, 1989). With respect
to crab meat, Customs has ruled that the domestic processing of
imported crab meat by thawing, sorting, blending with domestic
crab meat, canning and pasteurization does not constitute a
substantial transformation. (HQ 732337, August 16, 1989).
Also instructive is HQ 109504 (August 12, 1988; affirmed by
HQ 109793, May 31, 1989), in which Customs considered whether,
for purposes of the coastwise laws, the processing in Korea of
crab caught by U.S. flag vessels resulted in a new and different
article within the meaning of section 4.80b(a), Customs
Regulations (19 CFR 4.80b(a)). After boiling, removal of the
backs, freezing and glazing on a U.S. flag processing vessel, the
crab were processed in Korea by thawing and cleaning; removing
the gurry and gills; grading the arms, legs and claws; in some
cases, scoring the shells; in other cases the shells were largely
removed, and finally, in some cases the meat was entirely removed
from the shells. Customs ruled that only in the cases where the
crab was largely or wholly shelled did the manufacturing result
in a new and different product. While decided under the
coastwise laws rather than under the marking statute, the
ruling's conclusion as to the extent of processing of crab to
yield a new and different product is consistent with our own view
in this case that the processing aboard a Soviet vessel does not
substantially transform the crab into the product of another
country.
Thus, while the processing aboard a Soviet vessel takes
place on the territory of another country, by virtue of the rule
of the flag, the processing in this instance is not a substantial
transformation and the crab retains its U.S. origin.
Section 134.25, Customs Regulations (19 CFR 134.25),
imposes an obligation upon the importer of "J-List" articles,
such as the crab at issue here, to certify that if the importer
repacks the articles the articles will be marked in accordance
with the requirements of Part 134, or to notify a subsequent
purchaser in writing of the requirement that if repacked, the
articles must be marked in accordance with Part 134. However,
since the crab is not of foreign origin, it is not subject to the
country of origin marking requirements of Part 134 and
specifically, the requirements of certification and notice to
subsequent purchasers set forth in 19 CFR 134.25 do not apply to
the crab.
HOLDING:
The crab caught by U.S. flag vessels in the Soviet Exclusive
Economic Zone is not, for purposes of country of origin marking,
a product of the Soviet Union. Further, because the processing
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of the crab aboard a Soviet vessel is not a substantial
transformation, it does not become Soviet origin processed crab.
Since the crab is not of foreign origin, it is not subject to
the country of origin marking requirements of 19 U.S.C. 1304 and
19 CFR Part 134. Specifically, upon repacking after importation
the importer is not subject to the certification and notice to
subsequent purchasers requirements of 19 CFR 134.25.
Sincerely,
John Durant
Director, Commercial
Rulings Division