CLA-2 OT:RR:CTF:TCM H034679 GC
Helen L. Owen
Orca Bay Seafoods, Inc.
900 Powell Avenue, SW
Renton, Washington 98055
RE: Country of origin marking of fish fillets breaded, pre-fried, frozen and packaged after importation
Dear Ms. Owen:
This is in response to your request, dated April 29, 2008, for a binding ruling on the country of origin marking requirements for certain fish fillets imported by your company, Orca Bay Seafoods, Inc. (Orca). In preparation of this ruling, we reviewed your letter of June 25, 2008, in which you provided additional information concerning the harvesting and processing of the subject fish fillets.
FACTS:
In your correspondence, you outline two basic scenarios. In the first scenario, cod and yellowfin sole are harvested in Alaska. Either in whole form or headed and gutted, they are then sent to China in a frozen state. In China, the fish are converted into skinless fillets. The cod and sole fillets, still frozen, are then shipped to the United States for further processing. In the second scenario, you state that frozen filets of tilapia, harvested and cut in China, will be shipped to the United States for further processing.
In both instances, the fillets are breaded by Orca after importation into the United States. According to your submission, the breading process is characterized by seven general steps: batter coating; pre-dusting; second batter coating; final breading coating; pre-frying in an oil fryer; spiral freezing; and packaging into bags and master cartons. The following ingredients are involved in the breading process: wheat flour; water; yellow corn flour; salt; sugar; leavening; yeast; dextrose; soybean and cottonseed oil; spice extractive; and guar gum. You also state that the breading process contributes approximately 45 percent of the finished product. The only recommended preparation of the breaded fillets is oven baking.
In your ruling request, you inquire whether you can mark the breaded fish fillets “Product of USA”.
ISSUE:
What are the country of origin marking requirements for fish fillets to be breaded after importation?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that unless excepted, every article of foreign origin imported into the United States 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 United States, 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).
Part 134, CBP Regulations (19 C.F.R. §134) implements the country of origin marking requirements of 19 U.S.C. §1304. 19 C.F.R. §134.1(b) defines “country of origin” as:
[T]he 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 [the marking regulations]…
A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982).
The country of origin marking requirements of the fish fillets identified in the first scenario, the cod and sole fillets, are governed by the decision of the Court of International Trade in Koru North American v. United States (Koru), 701 F.Supp. 229 (CIT 1988). The court held that the processing of headed and gutted Hoki fish in Korea by thawing, skinning, boning, trimming, refreezing, and packaging into individual filets effected a substantial transformation. Similar to the Hoki fish in Koru, the cod and sole fish, whether headed and gutted or in whole form, are substantially transformed when they are cut into skinless fillets in China. Consequently, the cod and sole fillets, when imported into the United States, are considered by Customs and Border Protection (CBP) to be products of China. See also HQ 735084, dated August 17, 1993. The tilapia fillets are also products of China, as the fish are harvested and cut into fillets in China. Accordingly, the containers for the cod, sole and tilapia fillets, as imported, are required to be marked as products of China.
It is necessary to determine if the breading process constitutes a substantial transformation of the imported fillets in order to ascertain whether the finished breaded fillets must also be marked as products of China.
In HQ 560931, dated July 8, 1998, CBP held that crawfish tail meat from China was substantially transformed by breading and seasoning after shipment to another country. In so doing, we noted some cases where post-importation processing does not effect a substantial transformation on the subject merchandise, such as cases involving sugar coating or vitamin fortification of breakfast cereals (HQ 733908, dated April 11, 1991), or sugar coating and maceration of imported dates (HQ 084928, dated September 19, 1989). In these cases, the post-importation processing constituted a mere “surface application” that did not permanently alter the character of the underlying food products. The breaded and seasoned crawfish tail meat, however, was a different product with different characteristics than the crawfish meat in its imported state. Put differently, the breading and seasoning operations gave the crawfish meat a different taste and limited its end use to the extent that the operations resulted in a product of a different name, character and use than the imported crawfish tail meat. We came to a similar conclusion in New York Ruling Letter (NY) G84908, dated January 23, 2001, in which we held that cutting, marinating, seasoning, battering, breading and freezing operations effected a substantial transformation on catfish. Also, in HQ 559793, dated July 29, 1996, we held that Alaskan pollock, battered and breaded in Canada, was not eligible for tariff classification under heading 9802, Harmonized Tariff Schedule of the United States, because the battering and breading operations resulted in a commercially different article than the un-breaded pollock.
In the instant case, the breading process undertaken in the United States is similar to the breading and seasoning discussed in HQ 560931. The fact that the breading process accounts for approximately 45 percent of the finished products is evidence that the process is more than just a mere surface application of ingredients or materials that does not permanently alter the character of the fish.
The process by which the breading is added to the subject fillets indicates that the resulting products are permanently changed in terms of their taste and end-use. For instance, fillets of fish that have not been subject to additional processing may be prepared or cooked in a variety of ways. However, in this case, the breaded fish fillets are already pre-fried and are intended to be re-heated and browned in an oven. Thus, the resulting breaded cod, sole and tilapia fillets are processed to the extent that they no longer possess the same name, character and use of the imported un-breaded fillets. The pre-frying and breading processes of the subject fish fillets effect a substantial transformation. Consequently, the country of origin of the breaded, pre-fried, frozen and packaged fillets, for CBP purposes, is the United States. Accordingly, the breaded, pre-fried, frozen and packaged fish fillets are not required to be marked as products of China under CBP Regulations.
However, we note that determinations on whether the subject breaded fish fillets are eligible to be marked “Product of the USA” fall under the jurisdiction of the Federal Trade Commission (FTC). We further note that language referring to China on the labeling of the breaded, pre-fried, frozen and packaged fish fillets may be required under the regulations of the U.S. Department of Agriculture (USDA).
HOLDING:
Because they are harvested and cut into fillets in China, the subject tilapia fillets, as imported, are products of China. The subject cod and sole fillets, as imported, are also products of China because they were substantially transformed from fish to fillets in China. Consequently, the master cases of fillets must be marked to show China as the country of origin under 19 U.S.C. §1304.
The post-importation breading process conducted by Orca substantially transforms the imported fish fillets. As such, the breaded, pre-fried, frozen and packaged fish fillets are not required to be marked as products of China for CBP purposes. However, we note that language referring to China on the labeling of the breaded, pre-fried, frozen and packaged fish fillets may be required under the regulations of the FTC or the USDA.
For information about the eligibility of the breaded fish fillets to be marked as products of the United States, contact the Division of Enforcement of the FTC, at 600 Pennsylvania Avenue, NW / Washington, D.C. 20508.
For information about the application of the USDA country of origin labeling (COOL) regulations, contact the Agriculture Marketing Service of the USDA at 1400 Independence Avenue, SW / Room 2607-S, Stop 0254 / Washington, D.C. 20250.
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 CBP officer handling the transaction.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch