MAR-2:RR:NC:2:231 F89765

Ms. Cecilia Castellanos
Western Overseas Corporation
1855 Coronado Avenue
Long Beach, CA 90804

RE: The country of origin marking of macadamia nuts of Australian origin that are shelled in China.

Dear Ms. Castellanos:

In your letter, dated July 13, 2000, on behalf of your client, Macadamia Processing Company Limited, Lismore, Australia, you requested a ruling on the country of origin marking of macadamia nuts of Australian origin that are shelled in China.

The merchandise is comprised of macadamia nuts of Australian origin that are shelled in China and then exported to the United States in bulk vacuum packaging of 25 pound bags. The nuts will be sold commercially in the United States to a roaster who will roast and salt them. Then the nuts will be sold to institutions that prepare food. These nuts are not sold in retail sales packaging. A sample of the macadamia nuts was not submitted with your letter for review.

Section 304 of the Tariff Act of 1930, as amended (19 USC 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. must be marked to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

Part 134, Customs Regulations, implements the country of origin marking requirements and exceptions to 19 USC 1304. As provided for in 19 CFR 134.1(b), “country of origin” means the country of manufacture, production, or growth of an article. 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.” A substantial transformation is said to occur if, after manufacture or processing, an article emerges having a new name, character, or use.

In this instance it is clear that the shelling process that is performed in China is not a process of manufacture that effects a substantial transformation; it does not transform the merchandise into a new a different article of commerce. The macadamia nuts that are shelled in China do not, therefore, lose their identity, and they remain a product of Australia. Accordingly, we advise that the product remains a product of Australia for the purposes of country of origin marking. The label must state “Product of Australia.”

In your correspondence you inquire as to labeling that indicates “Product of Australia, shelled in China.” We have no objection to a label that states “Product of Australia, shelled in China.”

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR 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 Thomas Brady at (212) 637-7064.

Sincerely,

Robert B. Swierupski
Director,
National Commodity
Specialist Division