OT:RR:NC:N2:231
Ms. Veronica Gomez
Phoenix International Business Logistics, Inc.
1201 Corbin Street
Elizabeth, NJ 07201
RE: The tariff classification and country of origin of Omega3 TG Encapsulated Softgel Capsules
Dear Ms. Gomez:
This is in response to your letter dated November 10, 2021, requesting tariff classification and a country of origin determination for Omega 3 18/12 1200 mg Softgels.
You present a scenario in which raw Peruvian Anchovy Fish Oil is shipped from Peru to China. In China, the oil is encapsulated and exported to the United States. The finished product is composed of 100% Omega 3 TG [Triglyceride] Fish Oil.
The applicable subheading for the Omega 3 18/12 1200 mg Softgels is 1504.20.6040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: “Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified: Fats and oils and their fractions, of fish, other than liver oils: Other; Other.” The rate of duty is 1.5 cents/kilogram plus five percent ad valorem.
The “country of origin” is defined in 19 CFR 134.1(b) 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 this part.
The courts have held that 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). 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). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
Regarding the present case, the Peruvian Anchovy Fish Oil from Peru is sent to China for encapsulation, after which the fish oil capsules are shipped to their final destination, the United States. We find the processing that occurs in China, i.e., encapsulation, does not constitute a substantial transformation. The country of origin of the finished product is Peru.
This merchandise is subject to The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling FDA at 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 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 Ekeng Manczuk at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division