CLA-2-16:S:N:N1:229-864199
Mr. Jeffrey H. Pfeffer
Professional Services Group
Fritz Companies, Inc.
40 Exchange Place, 12th Floor
New York, NY 10005
RE: The tariff classification of frozen, cooked TUNA LOINS from
Thailand or Ecuador.
Dear Mr. Pfeffer:
In your letter dated June 11, 1991, you requested a tariff
classification ruling on behalf of Bumble Bee Seafood.
The product in question is described as "fully cooked TUNA
LOINS", seasoned with salt, hydrolyzed protein and vegetable
broth, but containing no added oil. The loins will be imported
frozen in clear, unmarked cryovac bags, which will be either heat
sealed or, alternatively, closed with a clip and packed for
export in any of three ways. First, individual loins in one to
five kilogram portions, and individually packed in sealed cryovac
bags, may be palletized, each pallet containing from 5 to 15
layers of loins for a total of 50 to 500 loins per pallet.
Cardboard at the top and/or bottom of the pallet and fiber
dividers between the layers of loins may also be used to protect
the cryovac bags and to facilitate handling. Additionally,
plastic stretch-wrapping of about 16 to 18 micron thickness may
be placed around the sides of the pallet or around the entire
pallet to facilitate handling. Finally, several plastic straps
may be wrapped around the pallet to secure the loins during
transportation. As an alternative to the pallet packing
described, the loins may be packed in corrugated cartons, each
holding up to 15 (but not less than 7) kilograms of tuna loins
individually sealed in cryovac bags, as described above, or in
larger corrugated shipping cartons of 40 inches by 48 inches,
each holding between 50 and 500 loins, each loin individually
sealed in cryovac bags.
A sample of the plastic film used in making the cryovac bags
in which the individual tuna loins will be packed was submitted
to the Customs Laboratory and found to be impermeable to air at
temperatures below freezing. Accordingly, tuna loins frozen in
these cryovac bags and closed with a heat seal, would be
considered "in airtight containers" for tariff purposes. Tuna
loins packed in cryovac bags, whose ends have been gathered and
closed with a metal clip, would not be considered tuna fish "in
airtight containers".
The applicable subheading for frozen, cooked TUNA FISH LOINS
in heat sealed cryovac bags will be 1604.14.20, Harmonized Tariff
Schedule of the United States (HTS), under the provision for
Tunas and skipjack:...In airtight containers:...Not in oil.
Within this provision, classification will be under either one of
two further subheadings. First, if entered within the tariff
rate quota period, these TUNA FISH LOINS will be classified in
subheading 1604.14.2020, HTS, if Albacore tuna (Thunnus
alalunga), or in subheading 1604.14.2040, HTS, if other than
Albacore tuna, under the provision for tuna, not in oil, in
airtight containers weighing with their contents not over 7
kilograms each, and not the product of any insular possession of
the United States, for an aggregate quantity entered in any
calendar year not to exceed 20 percent of the United States pack
of canned tuna during the immediately preceding year, as reported
by the National Marine Fisheries Service. The rate of duty under
either subheading will be 6 percent ad valorem. If entered after
the tariff rate quota has been filled, these TUNA FISH LOINS will
be classified in subheading 1604.14.3020, HTS, if Albacore tuna,
or in subheading 1604.14.3040, HTS, if other than Albacore tuna.
The rate of duty under either subheading will be 12.5 percent ad
valorem. Note that the tariff rate quota for this merchandise
opens on January 1 each calendar year, and closes when the full
quota amount has been entered.
The applicable subheading for these frozen, cooked TUNA FISH LOINS
packed in cryovac bags sealed with a metal clip will be
1604.14.4000, Harmonized Tariff Schedule of the United States
(HTS), which provides for Tunas, skipjack and Atlantic bonito
(Sarda spp.):...Not in airtight containers:...In bulk or in
immediate containers weighing with their contents over 6.8
kilograms each, not in oil. The rate of duty will be 1.1 cents
per kilogram.
With regard to the marking of these loins, you state, first,
that the individual cryovac bags will not be marked or labeled in
any manner, as the purpose of these bags is merely to keep the
tuna loins separate and sanitary during processing and
transportation and to facilitate handling of the product. The
palletized loins will be sold intact to "a large scale
customer," who will provide for each shipment a letter, in
accordance with 19 C.F.R. Part 134.32(h), indicating that the
ultimate consumer is aware of the country of origin of the loins
and that it does not want individual bags to be so marked. In
the case of tuna loins imported in cartons holding up to 15
kilograms of tuna, the cryovac bags will not be marked or labeled
in any way but the corrugated carton, in which the loins will
always be sold as a unit, will be marked to indicate the country
of origin to the "large scale ultimate consumer". Loins shipped
in large cartons of 40 inches by 48 inches will be in unmarked
and unlabelled cryovac bags. The large cartons will be marked
with the country of origin, and the loins would be sold only in
whole 40 inch by 48 inch corrugated containers to "large scale
entities."
An additional submission by your office, dated July 24,
1991, identifies more narrowly the "large scale customer," or
"ultimate consumer," who will receive this product, as tuna
processors "who will utilize the loins to prepare tuna salad,
etc.." You also state that, "[f]or palletized shipments, the
entire pallet will be sold intact for this purpose." Finally,
you state that some tuna may also be sold "to prisons and other
large scale institutions for processing into these commodities."
Section 134.11, in Title 19 of the Code of Federal
Regulations, (19 C.F.R. 134.11), states that
Unless excepted by law, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304), requires that every article of foreign origin
(or its con- tainer) imported into the United States shall be marked in a
conspicuous place as legible, indelibly, and permanently as the nature of
the article (or container) will permit, in such manner as to indicate to
an ultimate purchaser in the United States the English name of the
country of origin of the article, at the time of importation into the Customs
territory of the United States. Containers of articles excepted from
marking shall be marked with the name of the country of origin of the article
unless the container is also excepted from marking. [Boldface added.]
The term "ultimate purchaser" is defined in section 134.1(d) in
the Code of Federal Regulations (19 C.F.R. 134.1(D), as
"generally the last person in the United States who will receive
the article in the form in which it was imported. It is not
feasible to state who will be the 'ultimate purchaser' in every
circumstance. The following examples may be helpful:
(1) 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.
(2) 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 processing,
will be regarded as the "ultimate purchaser."
(3) If the article is to be sold at retail in its imported
form, the purchaser at retail is the "ultimate purchaser."
(4) If the imported article is distributed as a gift the
recipient is the "ultimate purchaser"."
In the instant case, you believe that your client's
customers, tuna processors, who will process these loins into
tuna salad, are the "ultimate purchasers" of this merchandise.
We concur. In our opinion, the processing of the tuna loins, in
combination with other ingredients such as, for example, with
mayonnaise, vegetables, seasonings and spices, would
substantially transform these tuna loins into a new and different
article of commerce,--namely, into tuna salad. These tuna
processors, then, would be considered the "ultimate purchasers"
of the tuna loins, as defined in section 134.1(d).
Further, in our opinion, institutional users, such as, for
example, prisons or hospitals, which will further process the
tuna loins by combining them with other ingredients to make tuna
salads or tuna casseroles, or utilizing them in the preparation
of individual meals, or in similar applications, would also be
considered "ultimate purchasers," as defined in the statute.
Secondly, you state that importations of tuna loins in
unmarked pallets will be entered with a letter from the domestic
customer, "prepared in accordance with 19 C.F.R. 134.32(h),
indicating that the ultimate consumer is aware of the country of
origin and that it does not want individual bags to be marked."
After reviewing Section 134.32, we do not believe that this
exception has application in the transactions described in your
letter.
Section 134.32 (h) states that "[t]he articles described or
meeting the specified conditions set forth below are excepted
from marking requirements (see Subpart C of this part for marking
of the containers):
...
(h) Articles for which the ultimate purchaser must necessarily
know the country of origin by reason of the circumstances of their
importation or by reason of the character of the articles even
though they are not marked to indicate their origin.
...
In the transactions you describe, the "ultimate purchasers" of
these frozen tuna loins will be domestic food processors or
institutional users, who will purchase the product from your
client, the actual importer of the merchandise. As customers of
the importer, these "ultimate purchasers" are removed from all
aspects of the import transaction. They do not, for example,
deal with the foreign seller, nor are they involved in the
details of the importation. Because they are divorced from the
particulars of the import transaction, domestic customers may
not be said to "necessarily know the country of origin" [of this
tuna] "by reason of the circumstances of their importation," as
required by the statute. Nor would the character of the tuna
loins themselves provide evidence of their origin. Accordingly,
in our opinion, the palletized tuna loins, which will be resold
to an "ultimate purchaser" only in units of whole, intact
pallets, must be marked on the pallet with the country of
origin.
Finally, on the importation of marked pallets of unmarked
frozen tuna loins which have been sold to a tuna processor for
further manufacture into tuna salad, an exception from country of
origin marking requirements for the individual tuna loins may be
requested by the importer pursuant to section 134.32(d) of the
Code of Federal Regulations (19 C.F.R. 134.32(d)). This
request should include a written statement or declaration from
the "ultimate purchaser", (1) stating that he purchases only
whole, intact pallets of tuna loins from the importer, (2) noting
the number of pallets purchased from the instant shipment, and
(3) stating that the imported tuna loins will be further
processed by him, in combination with other ingredients, into a
tuna salad.
On the importation of frozen tuna loins in corrugated
cartons, where the cartons are marked but the individual loins
are not marked, and sales are made in whole carton units, a
request for an exception to country of origin marking
requirements may be made by the importer, pursuant to section
134.32(d), provided that such request is accompanied by a
statement or declaration, as described above, from the "ultimate
purchaser," as defined in section 134.1.
This ruling is being issued under the provisions of Section
177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
Jean F. Maguire
Area Director
New York Seaport