MAR-2-05 CO:R:C:V 731685 jd
Robert F. Seely, Esq.
Miller & Blume
International Square, Suite 400
1825 I Street, N.W.
Washington, D.C. 20006
RE: Country.of origin marking requirements applicable to a
multiunit retail package of imported fruit drink
Dear Mr. Seely:
This is in reply to your letter of August 15, 1988,
concerning the application of country of origin marking
requirements to a multiunit retail package of imported fruit
drink. We regret the delay in responding.
According to your submission, your client plans to import
into the U.S. a fruit drink manufactured in Mexico. The fruit
drink ingredients are: purified water- approximately 80 percent;
sugar- approximately 10 percent; juice concentrates- 10 percent;
other ingredients (artificial punch flavor, sodium benzoate,
color)- less than 1 percent. The artificial punch flavor is
sourced from the U.S., other ingredients will be sourced from
various countries. The juice concentrates will be a blend of
apple, orange, and grape.
The completed fruit drink will be bottled in individual
serving-size (8 oz.) plastic bottles. Such bottles will have
affixed at the top a brand name label on a tamper-resistant seal.
Six such bottles will be placed in a cardboard container and the
cardboard container will be wrapped in clear plastic shrinkwrap.
The cardboard container will be imprinted in pertinent part with
the words, "MADE UNDER THE SUPERVISION OF (COMPANY NAME) IN
MEXICO, DIST. BY (COMPANY NAME), (COMPANY'S U.S. ADDRESS)." The
words are all the same size and the same type style and color.
Is fruit juice concentrate substantially transformed by its
use in the manufacture of a fruit drink so as to make disclosure
of the country of origin of the concentrate unnecessary?
Does country of origin marking on the outer container of
multiunit retail packages of fruit drinks satisfy country of
origin marking requirements?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), requires that, unless excepted, every article of
foreign origin (or its container) imported into the United States
shall 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. Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), in defining "country of origin", states that, "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."
In order for a "substantial transformation" to be found, the
further work or material added must result in a new and different
article of commerce with a new name, character, or use.
Section 134.32(d), Customs Regulations (19 CFR 134.32(d)),
states that an article may be excepted from individual marking
when marking on the article's container will reasonably indicate
the origin of the article.
In a recent country of origin marking case involving the
issue of substantial transformation, National Juice Products
Association v. United States, 10 CIT 48, 628 F.Supp. 978 (CIT
1986),the Court of International Trade upheld Customs
determination that imported orange juice concentrate is not
substantially transformed when it is processed and then packaged
into retail containers as frozen concentrated or reconstituted
orange juice. The court stated, "the retail product in this case
essentially the juice concentrate derived in substantial part
from foreign grown, harvested, and processed oranges. The
addition of water, orange essences, and oils to the concentrate,
while making it suitable for retail sale does not change the
fundamental character of the product, it is still essentially the
product of the juice of oranges." The court also noted that when
considering the process as a whole, the major part of the end
product, when measured by cost, value, or quantity, is
manufacturing concentrate and that the processing in the United
States is a minor manufacturing process.
Applying the rationale of the National Juice case to the
product at issue here, it is the opinion of this office that
juice concentrates imported into Mexico for use in the
manufacture of a fruit drink are substantially transformed. The
name of the product has changed to fruit drink, a change alerting
ultimate purchasers that the product contains much less juice
concentrate, in this case, 10 percent, than products sold as
reconstituted fruit juice or as frozen concentrated juice.
In regard to the change in character, the retail product
being marketed in the case of a fruit drink is not "essentially
the juice concentrate" as it is in the case of reconstituted
juice or frozen concentrated juice. An ultimate purchaser
seeking a fruit juice would not, in our opinion, purchase a fruit
drink. The fruit drink, by virtue of added ingredients such as
sugar and color is no longer "essentially" a juice. In fact, the
juice concentrates are not even solely responsible for the flavor
of the final fruit drink as artificial punch flavor has been added.
There is no significant change in the use of the
concentrates; a concentrate is destined to become a beverage, and
the fruit drink is that beverage now ready to consume. However,
considering the totality of the circumstances, we believe the
concentrates undergo a substantial transformation by their use in
the manufacture of fruit drink. The juice concentrates are
subsumed into a product that is no longer considered a juice.
Accordingly, the country of origin of the constituent juice
concentrates need not be marked on the fruit drink.
In regard to the country of origin marking imprinted on the
cardboard tray containing the bottles of fruit drink, it is our
opinion that the marking satisfies the requirements of 19 U.S.C.
1304. Customs has approved similar marking in the past, e.g.,
marking on a can containing imported tennis balls (723045;
November 4, 1983), and marking on a cardboard tray holding
imported pencils inside a plastic bag (722896; November 4, 1983).
In the case of the pencils it was stated, "Because the package
contains cardboard trays with pre-printed information intended
for the consumer, we believe that these properly marked packages
will reach the consumer unopened."
Similarly, we believe it is very likely the shrink-wrapped
trays of fruit drink will reach the ultimate purchaser unopened.
However, in the Food and Drug Administration regulations you
cite, 21 CFR 101.105(s), it states, "For the purposes of this
section, 'multiunit retail packages' means a package containing
two or more individually packaged units of the identical
commodity and in the same quantity, intended to be sold as part
of the multiunit retail package but capable of being individually
sold in full compliance with all the requirements of the
regulations in this part." [Emphasis added.]
Accordingly, you should be prepared to furnish, at the
discretion of the district director, a statement or affidavit that
the multiunit packages are intended for sale unopened.
Alternately, you could imprint the label on each bottle, or the
bottle itself, with the words "Not for individual sale". That
would make it unnecessary to supply a statement or affidavit in
connection with each entry for which an exception to individual
marking is requested.
Fruit juice concentrates are substantially transformed by
their use in the manufacture of a fruit drink. Accordingly, a
fruit drink manufactured in [Mexico for shipment to the U.S. does
not have to be labeled to disclose the origin of the constituent
concentrates; the drink may be labeled as a product of Mexico for
purposes of compliance with 19 U.S.C. 1304. The required marking
may be displayed in a conspicuous place on the cardboard tray
holding six bottles of fruit drink shrink-wrapped together for
retail sale. The district director may, at his discretion,
require a statement or affidavit that the multiunit retail
package is intended for sale unopened.
Commercial Rulings Division