OT:RR:CTF:FTM H311331 JER
Center Director
CEE-Agriculture & Prepared Products U.S. Customs and Border Protection 301 E Ocean Blvd, Shoreline Square
Long Beach, CA 90802
ATTN: Bryan M. London, Import Specialist
RE: Application for Further Review of Protest No. 4601-20-110839; Country of Origin of frozen roasted (broiled) eel
Dear Center Director:
This is our decision regarding the Application for Further Review (“AFR”) of Protest No. 4601-20-110839, timely filed on or about March 17, 2020, by the law firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP, on behalf of their client, American Eel Depot, Corp. (“Protestant”), concerning the country of origin of imported frozen roasted (broiled) eel. Protest No. 4601-20-110839 shall act as the lead protest for Protest Numbers: 4601-20-111432, 4601-20-113733, and 4601-20-117309.
FACTS:
This matter involves multiple entries of frozen roasted (broiled) eel made between October 25, 2018 and November 5, 2018. The products at issue were initially entered as products of the People’s Republic of China (“China”), subject to Section 301 duties, which are applicable to certain products of Chinese origin. Protestant seeks to establish that the imported frozen roasted (broiled) eel is of U.S. origin or of European origin and asserts –in part that the imported eel is not subject to Section 301 duties.
The frozen roasted (broiled) eel in question is produced with either of two species of eels: Anguilla rostrata (common name American Eel) which is caught in the United States and Anguilla anguilla (common name European Eel) which is caught in various unspecified European countries. Both species are commonly referred to as “glass eels” in their juvenile state. The scenario outlined is one whereby juvenile glass eels are legally harvested in the United States or various European countries then exported (alive) to China where they are placed into growing ponds until maturity. Upon attaining commercial suitable sizes, the eels are then prepared and processed for export. During the processing in China, the eels are beheaded, deboned, eviscerated, fins removed, trimmed, washed, steamed, roasted (with or without sauce), graded, packed, frozen and exported to the United States. Specifically, the Protestant outlines the processing of the glass eel as follows:
The fresh eels are cut open to remove the eels’ bones, head and guts. Next, the eels are trimmed to remove the dorsal fins. The eels are not, however, skinned. The eels are then washed and placed on the roasting line. The eels, with their skin and flesh are then roasted via carbon fire. The skin (or backs) of the eel are laid flat on the roasting line with flesh side facing upward (to remove excess fat). After the eel meat is roasted – it is then steam cooked to make the meat softer and more sterilized. The eel is then roasted with sauce or in some cases it is roasted without sauce. The cooked eel is thereafter inspected, graded and then packaged and boxed. The eel is then frozen in preparation for shipping and export.
Protestant argues that baby eels of U.S. or of European origin are not substantially transformed by the various processes that occur in China. In particular, Protestant contends that the eel does not lose its essential shape as a whole fish and is therefore not transformed into a new product with a new shape, character or commercial identity. In reaching its conclusion, Protestant states that because the subject eels are not filleted that they retain the basic shape of an eel. As such, Protestant concludes that the frozen roasted (broiled) eel is a product of the United States if produced from eels of the U.S. origin and if produced from eels that originated in a specified European country, then the frozen roasted eel product must be marked with the country of origin of the specific source country of the eels.
On October, 14, 2020, CBP held a telephone conference with Protestant’s counsel, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP, to discuss the tariff classification of the subject frozen eel. On October, 14, 2020, counsel for Protestant provided a supplemental submission which included additional information regarding the subject frozen eel.
ISSUE:
What is the country of origin of imported frozen roasted (broiled) eel?
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed on or about March 17, 2020, within 180 days of liquidation. 19 U.S.C. § 1514(c)(3). Further Review of Protest No. 4601-20-110839 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) because the decision against which the protest was filed is alleged to be inconsistent with matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts.
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 United States 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 United States the English name of the country of origin of the article. By enacting 19 U.S.C. § 1304, Congress intended to ensure “that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are 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, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. § 1304. Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as 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 the marking laws and regulations. A substantial transformation occurs when an article emerges from a process with a new name, character, and use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and Texas Instruments v. United States, 681 F.2d 778, 782 (1982).
With regard to the country of origin of fish and seafood products, the Court of International Trade’s decision in Koru North America v. United States, 701 F.Supp. 229, 235 (C.I.T. 1988) is instructive. It is well settled that changes to the fundamental nature and character of imported fish, where the fish has been transformed, both in name and character, that a new article of commerce has been created. Koru North America v. United States, 701 F.Supp. 229, 235 (C.I.T. 1988). In Koru North America, the Court considered whether the processing of be-headed and gutted fish (in South Korea) by thawing, skinning, de-boning, trimming, freezing and packaging – constituted a substantial transformation. The Court concluded that the fish that had been filleted no longer possessed the essential shape of a fish. As a fillet, the Court noted, that filleted fish had become its own discrete commercial good distinct from the whole fish when it first arrived in South Korea.
CBP has previously addressed the country of origin of imported fish and the issue of whether certain imported fish had been substantially transformed by the processes such as deveining, de-boning, skinning, cutting, beheading and the filleting of the fish. For instance, in New York Ruling Letter (“NY”) R04129, dated June 15, 2006, CBP held that catfish fingerlings of U.S. origin remained products of the United States despite being raised, fed, harvested, gutted, skinned, frozen and packaged, but not filleted, in China. CBP reasoned that “skinning and cutting of the fish…represent[ed] a basic level of processing” that failed to alter the commercial character of the product as a “whole catfish”. Therefore, the fish (originally of U.S. origin) remained a product of the United States.
By contrast, NY R04074, dated June 13, 2006, determined that certain catfish fingerlings had been substantially transformed. In NY R04074, the catfish fingerlings were of U.S. origin but were raised, fed, harvested, gutted, skinned, frozen and packaged in China. Unlike the catfish in NY R04129, the catfish were also filleted in China. Since the catfish in NY R04074 were filleted in China, CBP concluded that the filleted catfish emerged as new product with a new character and therefore became a product of China.
More specific to the case at issue, NY N307962, dated December 18, 2019, determined that the country of origin of frozen broiled eel was China despite undergoing various cooking processes in Indonesia. In NY N307962, the eel had been farm raised, beheaded, fin trimmed and filleted in China. The defined, filleted eel was then shipped to Indonesia where it was then broiled and dipped in sauce. The rationale in NY N307962 followed a decision made by the Court of International Trade (discussed supra) and determined that the eel had been substantially transformed into a new and distinct commercial product by the filleting of the eel.
According to Protestant, the subject eel has not been filleted. Protestant argues that the eel maintains its shape as an eel and is therefore not substantially transformed by the operations that occur in China. In its supplemental submission, Protestant provides the following definition of a filleted fish: “A slice of fish flesh of irregular size and shape that is removed by a cut made parallel to the backbone.” Seafood Processor Definitions, Aquafind Aquatic Fish Database, at http://aquafind.com/info/SeafoodDefinitions.php. Protestant explains that a filleted fish is one that is a piece or strip of fish that no longer resembles the whole fish. In this regard, Protestant asserts that the imported eel, although cut parallel to its backbone, maintains the shape of a whole eel.
When fish is filleted, it is cut or sliced lengthwise along one side of the fish parallel to the backbone from the head to the tail fin. The fish is then turned over and the process is repeated until only strips of the fish flesh remains; leaving the, guts, backbone and skeletal structure as waste. Filleting Fish, https://www.meatsandsausages.com/fish/processing/cleaning/filleting (last visited, 09/17/2020). Consistent amongst each iteration of filleting fish, is that the fish is beheaded, trimmed and fins removed before proceeding to cutting the fish lengthwise into halves or slices of fish meat. How to Fillet a Fish, https://www.takemefishing.org/how-to-fish/how-to-catch-fish/how-to-fillet-a-fish/ (Last visited, Dec. 8, 2020).
In the instant case, juvenile glass eels are raised, beheaded, deboned, eviscerated, trimmed, fins removed and cut open down the center of eel from the head to the tail and laid flat with the membrane of the back still intact. The subject eel is cut down the center parallel to the backbone from the head to the tail fin such that the backbone and skeletal structure can be removed. A strip of membrane on the back of the subject eel remains intact and connects the two sides of the eel as it lay flat. The distinction between the manner in which the subject eel is cut open down the center and the process of filleting fish is minimal, if non-existent. Unlike the fillet method, the remaining fish meat is not separated into individual strips of fish flesh but instead separated strips of fish flesh remain connected by a skin or membrane on the back of the eel. In either event, both the center cut method and the fillet method serve the same function of separating the flesh of the fish away from the backbone and skeletal structure. Each method allows the backbone and skeletal structure to be removed such that only the fish meat remains. Much like the frozen broiled eel in NY N307962, the subject frozen roasted (broiled) eel has been beheaded, deboned, eviscerated and filleted or cut down the center of the eel, parallel to its backbone. The only distinction between the subject eel and the eel in NY N307962 or the catfish in NY R04074, is that, while the fillet fish meat lays flat, it remains connected by a thin membrane rather than being separated into two individual flat strips.
A. Eel Depot eel cut open, prepared for roasting B. Filleted eel (fresh) https://www.newzealandeel.co.nz/products/fresh-eel-fillets-butterfly-cut
D. Eel Depot eel (before being cut open) C. Eel Depot eel (after being center cut open)
As the images in A. and B. reflect, there is little visual or functional difference between a fish that has been filleted and a fish that has been cut open down the center and laid flat. Both are flat strips of fish meat and both are bereft of any bones or skeletal structures. In fact, the center cut eel and the filleted eel are almost identical. Both present a flattened strip of fish meat with no head and no skeletal bones. Moreover, a filleted eel (or filleted fish) and the subject eel share the common distinction of no longer possessing the essential shape of a fish. Just as the Hoki fish in Koru North America lost its shape (of a fish), once center cut or filleted, the eel loses its essential shape as a fish as well. In particular, an eel has a distinct elongated tubular shape akin to a snake. Once it has been filleted or cut open down the center, the elongated tubular shape, of an eel, is no longer present. Instead, following the center cut method, the eel has a flattened effect that is substantially similar to the fish fillets discussed in NY R04074 and Koru North America; and is virtually identical to the fillet eel in NY N307962. In this regard, the once tubular shaped eel no longer possess the shape of a whole eel – following the operations in China. Therefore, in keeping with decision in Koru North America, it is the position of this office that the subject eel is substantially transformed in China, such that it emerges in China as a new product with a new character and new commercial identity. Accordingly, we find that the country of origin of the imported frozen roasted (broiled) eel is China.
HOLDING:
The country of origin of the imported frozen roasted (broiled) eel is China.
You are instructed to DENY the Protest. In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing of the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
For Craig T. Clark, Director
Commercial and Trade Facilitation Division