MAR-2-05 RR:TC:SM 559932 MLR
Mr. Peter L. Stormer
Product Integrity Department
Rohm and Haas Company
Independence Mall West
Philadelphia, PA 19105
RE: Country of Origin Marking for Kathon MWX Bulk Granular
Microbicide; Chemical; Substantial Transformation
Dear Mr. Stormer:
This is in reference to your letter of June 26, 1996,
requesting a ruling concerning the country of origin marking
for Kathon MWX bulk granular microbicide.
FACTS:
It is stated that the bulk of the materials that make up
Kathon MWX bulk granular microbicide (hereinafter "MWX")
comes from the U.S., and that the active ingredient is a
product of the United Kingdom. On September 17, 1996, you
provided the chemical composition of the active ingredient
in MWX. It is stated that the bulk, stabilized ingredient
is imported from the United Kingdom into the U.S. and is
loaded onto silica and packaged into 2 ounce tyvek film
pouches. These pouches are then overpacked in foil wrap and
then in box cartons. It is also stated that the
Environmental Protection Agency requires that the active
ingredient (as imported) and the final product have
different registration numbers under the Federal
Insecticide, Fungicide and Rodenticide Act (FIFRA).
ISSUE:
Whether the active ingredient imported from the United
Kingdom is substantially transformed in the U.S., such that
the MWX does not require marking pursuant to 19 U.S.C. 1304.
LAW AND ANALYSIS:
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.
Congressional intent in enacting 19 U.S.C. 1304 was "that
the ultimate purchaser should be able to know by an
inspection of the marking on the imported goods the country
of which the goods is 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. Inc., 27 CCPA 297, 302, C.A.D. 104
(1940). Part 134, Customs Regulations (19 CFR Part 134)
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304.
Section 134.1(b), Customs Regulations {19 CFR 134.1(b)},
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 the meaning of the marking laws
and regulations. For country of origin marking purposes, a
substantial transformation of an imported article occurs
when it is used in the U.S. in manufacture, which results in
an article having a name, character, or use differing from
that of the imported article. See 19 CFR 134.35.
You claim that the active ingredient is substantially
transformed in the U.S., such that the Kathon MWX bulk
granular microbicide may be appropriately marked as a
product of the U.S.
In Headquarters Ruling Letter (HRL) 734558 dated July
22, 1992, Customs addressed the manipulation of a herbicide
and found that there was no substantial transformation when
the herbicide, exported in bulk to France, was encapsulated
into a water-soluble film, since the operation did not
change the chemical composition but only facilitated its
use. See also HRL 556616 dated June 16, 1992. In HRL
555064 dated March 29, 1990, Customs determined that the
formulation of propanil-4, a herbicide for rice, from
technical propanil did not constitute a substantial
transformation for purposes of the Caribbean Basin Economic
Recovery Act. This decision was based on T.D. 78-168, 12
Cust. Bull. 353 (1978), which held that the formulation of
the herbicide diuron wettable powder by mixing technical
diuron with various agents was not a substantial
transformation for purposes of the Generalized System of
Preferences. These findings are also consistent with
National Juice Products Association v. United States, 628 F.
Supp. 978 (CIT 1986), where the court found that imported
manufacturing orange juice concentrate was the very essence
of frozen concentrate orange juice and reconstituted orange
juice. The court noted that the addition of water, orange
essence and oils to the concentrate, while making it
suitable for retail sale, did not change the fundamental
character of the imported product, and therefore, was not a
substantial transformation.
Based on these cases, it is our opinion that the active
ingredient is not substantially transformed in the U.S.
since it appears that the MWX and imported active ingredient
are chemically similar and the active ingredient does not
undergo a chemical reaction in the U.S. by being loaded onto
silica. Furthermore, while the EPA regulations may require
the MWX and active ingredient to have different registration
numbers, we note that the EPA's requirement for identifying
the producer serves a different purpose and has different
criteria from the criteria required for determining the
country of origin of an article under 19 U.S.C. 1304.
Additionally, in regard to the value added in the U.S.,
the Court of International Trade has stated in numerous
cases that the name, character and use test is entitled to
continued adherence in view of its affirmance in recent
opinions by the appellate court, and to avoid "ludicrous
results," should generally be determinative of the country
of origin of imported articles. See Ferrostaal 664 F. Supp.
at 538; and National Hand Tool Corp. v. United States, 16
CIT 308, 312 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993).
Accordingly, it is our opinion that the imported active
ingredient is not substantially transformed in the U.S.
HOLDING:
Based upon the information provided, it is our opinion
that the imported active ingredient is not substantially
transformed in the U.S. Therefore, the MWX will require
marking pursuant to 19 U.S.C. 1304.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered. 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,
John Durant, Director
Tariff Classification Appeals
Division