MAR-2-05 CO:R:C:V 735084 ER
Mr. Joe Hamby
Chief Financial Officer
Tri-Marine International
150 W. Seventh Street
Suite 205
San Pedro, California 90731
RE: Country of Origin Marking Requirements for Frozen Swordfish
Fillets; Substantial Transformation; Koru North America v.
United States, 701 F.Supp. 229, 12 CIT 1120 (CIT 1988).
Dear Mr. Hamby:
This is in response to your letter dated April 1, 1993, in
which you request a ruling regarding the country of origin
marking requirements for certain frozen swordfish fillets.
FACTS:
According to your letter and subsequent telephone
conversation with this office on July 28, 1993, the swordfish is
caught by Taiwanese longliner fishing vessels in the Indian
Ocean. The heads, tails and viscera are removed on board the
fishing vessel and the fish is frozen. In this condition the
fish is known as "dressed without tail" ("DWT"). The DWT is
discharged from the fishing vessel at Singapore where it is
subjected to further processing to become "individually quick-
frozen" fillets.
The processing performed in Singapore consists of cutting
the fish in half, taking out the bones and trimming off the dark
meat and edges of the fish. After cutting and trimming, the
fillet is coated with a water glaze to protect it from
dehydrating in its frozen state. Each fillet is individually
bagged and the bag marked with the name of the product, its
weight and origin. You informed us that unlike certain other
types of fish, leaving some skin on the swordfish fillets is
desirable to the consumer.
ISSUE:
Whether swordfish captured by a Taiwanese fishing vessel,
dressed without tails and frozen on board the vessel, is later
substantially transformed by the processing performed in
Singapore to make it into individually quick-frozen fillets?
LAW AND ANALYSIS:
The marking statute, Section 304 of the Tariff Act of 1930,
as amended (19 U.S.C. 1304), provides that, unless excepted,
every article of foreign origin (or its container) 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
and exceptions of 19 U.S.C. 1304.
The primary purpose of the country of origin marking statute
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
CCPA 297, 302, C.A.D. 104 (1940).
The "ultimate purchaser" is defined generally as the last
person in the U.S. who will receive the article in the form in
which it was imported. 19 CFR 134.1(d). If an article is to be
sold at retail in its imported form, the purchaser at retail is
the "ultimate purchaser." 19 CFR 134.1(d)(3).
The country of origin for marking purposes is defined at
section 134.1(b), Customs Regulations (19 CFR 134.1(b)), 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 Part 134. A substantial
transformation occurs when articles lose their identity and
become new articles having a new name, character, or use. Koru
North America v. United States, 12 CIT 1120, 701 F.Supp. 229 (CIT
1988).
On the high seas, the country of origin of fish is
determined by the flag of the catching vessel. Koru at 1122.
However, if the fish is later substantially transformed in
another country then such other country will be the country of
origin of the fish, within the meaning of the marking statute.
Koru at 1125. In Koru, fish beheaded, de-tailed, eviscerated and
frozen on board the capturing vessel was later substantially
transformed into a product of Korea by the processing necessary
to make it into individually quick frozen fillets.
In Korea, the fish was "thawed, skinned, boned, trimmed,
glazed, refrozen and packaged for exportation to the United
States." In finding a substantial transformation, the court
noted that when the fish arrived in Korea, it had the look of
whole fish, "albeit without heads, tails or viscera" whereas the
fish exported from Korea no longer possessed "the essential shape
of the fish" having been "trimmed of jagged edges, fat lines and
impurities, glazed to preserve [its] moisture ... frozen ... and
finally, packaged". Also significant was the fact that the
fillets were considered discrete commercial goods and were sold
in separate areas and markets. The court found that such changes
went to the fundamental nature and character of the fish
transforming the fish and creating a new article of commerce.
Although not determinative, the change in tariff classification
was considered by the court to be additional evidence of a
substantial transformation. Koru at 1121 and 1127.
In the instant case, the processing performed on board and
in Singapore is identical to that described in the Koru decision
with the one exception of the skin, which is left on the
swordfish fillets because of consumer preference. In view of the
similarity between the instant facts and those in the Koru
decision, Customs finds that the operations performed in
Singapore substantially transform the swordfish into a product of
Singapore. Accordingly, the fillets must be properly marked as
products of Singapore.
HOLDING:
Swordfish captured by Taiwanese vessels and processed into
individually quick-frozen fillets in Singapore is substantially
transformed. Accordingly, the fillets are a product of Singapore
and should be properly marked as such.
Sincerely,
John Durant, Director