MAR-2 OT:RR:NC:N:228
Mr. Steven Troehler
Empire Pacific
7650 N. Palm Avenue – Suite 103
Fresno, CA 93711
RE: The country of origin and country of origin marking of raisins from Australia
Dear Mr. Troehler:
This is in response to your letter dated June 4, 2015 requesting a ruling on the country of origin and country of origin marking of raisins. A marked sample was not submitted with your letter for review.
You state you are importing Australian organic raisins in 30-pound cases and repackaging them into smaller retail packages. On June 5, 2015 in a telephone conversation, you clarified that some of the Australian raisins might be blended with California organic raisins. You contracted a processor in California to do the repackaging. For the purposes of this ruling, we presume that the mixture, of Australian raisins and Californian raisins, is also packed for retail sale.
Determination of Country of Origin
The marking statute, section 304, 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. 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 C.A.D. 104 (1940).
Part 134, Customs and Border Protection (CBP) Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304.
Section 134.1(b) of the regulations, defines "country of origin" 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 this Part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
In this instance, a part of the imported Australian raisins are only repackaged into retail packages in the United States. The other will be blended with the California raisins for retail sale. CBP has consistently held that merely repackaging does not constitute a substantial transformation; nor does blending a product from one country with the same product of another country constitute a substantial transformation. Therefore, the country of origin of the repackaged Australian raisins remains Australia. The countries of origin of the blended Australian and California raisins are Australia and the United States. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the United States.
Country of Origin Marking Requirements
Section 134.1(d), CBP Regulations (19 CFR 134.1(d)), defines the ultimate purchaser as:
generally the last person in the U.S. who will receive the article in the form in which it was imported. ... The following examples may be helpful:
If an imported article will be used in manufacture, the manufacturer may be the “ultimate purchaser” if he subjects the imported article to a process which results in a substantial transformation of the article, even though the process may not result in a new or different article . . . .
If the manufacturing process is merely a minor one which leaves the identity of the imported article intact, the consumer or user of the article, who obtains the article after the processing, will be regarded as the “ultimate purchaser”. . . .
Therefore, for the purposes of country of origin marking, the ultimate purchaser of the Australian raisins in 30 lbs. cases and in retail packages is the consumer of the raisins, who obtains the article after the repackaging, not the importer or the repackaging contractor. The ultimate purchaser of the mixture of the Australian and California raisins is also the consumer of the product.
Pursuant to 19 U.S.C. 1304(a)(3)(D) and section 134.32(d), CBP Regulations (19 CFR 134.32(d)), Customs excepts from individual marking requirements imported articles for which the marking of the containers will reasonably indicate the origin of the articles. 19 CFR 134.22 provides general rules for marking of containers or holders. 19 CFR 134.22(a) states in part “the outermost container or holder in which the article ordinarily reaches the ultimate purchaser shall be marked to indicate the country of origin of the article…..”
As provided in section 134.41(b), CBP Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
With regard to the permanency of a marking, section 134.41(a), CBP Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, CBP Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
Accordingly, based on the facts presented, the imported cases and retail containers of the Australian raisins must be marked with the country of origin of their contents, e.g., “Product of Australia,” in a conspicuous place as legibly, indelibly and permanently as the nature of the cases or containers will permit. Regarding the mixture of the Australian and California raisins, the retail containers of the product can be marked as “Product of Australia,” “Product of Australia and the USA,” or other words of similar meaning. The country of origin marking rules do not apply to articles of U.S. origin and it is not necessary to indicate the origin of the California raisins for Customs purposes. We would not object to its inclusion in the marking. However, as noted above, if you choose to indicate the U.S. origin of any item, then the marking will need to comply with the requirements of the FTC.
Section 134.26 of the Customs Regulations (19 CFR 134.26), which applies to articles that are repacked or manipulated after importation, provides the following:
Certification requirements. If an article subject to these requirements is intended to be repacked in retail containers (e.g., blister packs) after its release from Customs custody, or if the port director having custody of the article, has reason to believe such article will be repacked after its release, the importer shall certify to the port director that: (1) If the importer does the repacking, he shall not obscure or conceal the country of origin marking appearing on the article, or else the new container shall be marked to indicate the country of origin of the article in accordance with the requirements of this part; or (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer shall notify such purchaser or transferee, in writing, at the time of sale or transfer, that any repacking of the article must conform to these requirements.
(d) Notice to subsequent purchaser or repacker. If the article is sold or transferred to a subsequent purchaser or repacker the following notice shall be given to the purchaser or repacker:
Notice to Subsequent Purchaser or Repacker
These articles are imported. The requirements of 19 U.S.C. 1304 and 19 CFR part 134 provide that the articles in their containers must be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article or container will permit, in such a manner as to indicate to an ultimate purchaser in the United States, the English name of the country of origin of the article.
The importer of the Australian raisins intended to be repacked in retail containers is subject to the certification and notification requirements of 19 CFR 134.26. The importer must certify to the district director that if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer will notify such person of the marking requirements. The rule (19 CFR 134.26) is intended to ensure that the ultimate purchaser will be advised of the country of origin, and applies to the repacked raisins unless the importer is considered to be the ultimate purchaser, in which case the rule does not apply. Since in the instant case the ultimate purchaser is a person who receives the imported product after it is repackaged or blended with domestic raisin in retail packages, the importer of the Australian raisin must comply with the requirements of 19 CFR 134.26.
In your submission, you state that you have been told that the imported raisins are exempt from the U.S. Department of Agriculture (USDA) mandatory Country of Origin Labeling (COOL) requirements. We recommend you contact the USDA directly to clarify the statement. However, please be aware that CBP administers certain country of origin marking regulations (discussed above) which are not obviated by the USDA regulations and are applicable to this case.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Bruce N. Hadley, Jr. at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division