MAR 2-05 R:C:S 558692 AT
Mr. Joseph S. Aiello
Tricon Colors Incorporated
16 Leliarts Lane
Elmwood Park, New Jersey 07407-3291
RE: Country of origin marking requirements for imported
pyranine 120 to be further processed in the U.S.;
substantial transformation; ultimate purchaser; 19 CFR
Dear Mr. Aiello:
This is in response to your letters dated August 11, 1994
and June 28, 1995, concerning the country of origin marking
requirements for pyranine 120 imported from Germany that is to be
further processed in the U.S. into D&C Green #8. We regret the
delay in responding.
You state that Tricon Colors Incorporated ("Tricon") intends
to import pyranine 120 which is made in Germany into the United
States. The imported product, pyranine 120 is also known as C.I.
Solvent Green #7. Once imported, Tricon further processes the
imported material by reducing (diluting) it with 5 to 9 percent
sodium sulfate. After this dilution, the diluted pyranine 120
meets the standards of identity issued by the Food and Drug
Administration ("FDA") for color additive D&C Green #8. The
prefix D&C is used to identify dyes that have been certified by
the FDA for use in the U.S. for coloring drugs and cosmetics.
You state that the imported pyranine 120 is classified under
subheading 3204.19.1100, HTSUS, and the finished D&C Green #8 is
classified under subheading 3204.17. After the U.S. processing
is completed, the D&C Green #8 is submitted to the FDA for
certification. You have inquired as to whether the imported pyranine 120
from Germany becomes a product of the U.S. as a result of the
U.S. processing performed by Tricon to make D&C Green #8.
What are the country of origin marking requirements for
imported pyranine 120 which is to be used in the production of
D&C Green #8 in the U.S. in the manner described above?
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 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. 27
C.C.P.A. 297 at 302; C.A.D. 104 (1940).
The country of origin marking requirements for the imported
pyranine 120 that is to be further processed into D&C Green #8 by
Tricon in the U.S. depends upon whether Tricon is the ultimate
purchaser of the imported article.
The "ultimate purchaser" is defined generally as the last
person in the U.S. who will receive the article in the form in
which it was imported. See, 19 CFR 134.1(d). If an imported
article will be used in domestic manufacture, the manufacturer
may be the "ultimate purchaser" if he or she subjects the
imported article to a process which results in a substantial
transformation of the article. However, if the manufacturing
process is a minor one which leaves the identity of the imported
article intact, the consumer or user of the article, who obtains
the article after the processing, will be regarded as the
"ultimate purchaser." 19 CFR 134.1(d)(1) and (2).
For country of origin marking purposes, a substantial
transformation occurs when an article loses its identity and
becomes a new article having a new name, character or use. United
States v. Gibson-Thomsen Co., 27 CCPA 267 (1940); National Juice
Products Association v. United States, 10 CIT 48 (1986). Under
this principle, the manufacturer or processor in the U.S. who converts or combines the imported article into a different
article will be considered the "ultimate purchaser" of the
imported article, and the article shall be excepted from marking.
However, the outermost container of the imported article must be
marked (See, 19 CFR 134.35). Whether a substantial
transformation occurs is determined on a case-by-case basis.
The issue involved in this case is whether the imported
pyranine 120 which is processed as described above in the U.S. to
make D&C Green #8 is substantially transformed into a new article
having a new name, character or use.
In National Juice Products Association v. United States, 10
CIT 48, 628 F.Supp. 978 (CIT 1986), the court upheld Customs
ruling that imported manufacturing orange juice concentrate used
to make frozen concentrated orange juice and reconstituted orange
juice was not substantially transformed. The court stated that
the manufacturing concentrate is the "major part of the end
product, when measured by cost, value or quantity" and the
further processing in the U.S. to make the manufacturing
concentrate into frozen concentrated orange juice was considered
a minor manufacturing process. The court noted that the imported
product was the very essence of the retail product and 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 product.
Similarly, in this case, we find that the imported pyranine
120 is not substantially transformed as a result of the U.S.
operations performed. As the concentrate in National Juice was
determined to be the very essence of the finished retail product,
we find that the imported pyranine 120 is the very essence of the
finished D&C Green #8. The operation of diluting the pyranine
120 with 5-9 sodium sulfate is a minor processing operation which
does not change the essential character of the pyranine 120. See,
HQ 729519 (May 18, 1988), a case involving wine coolers (a
beverage consisting of a liquid flavor and carbonated water)
where Customs ruled that the processing in Canada by mixing and
bottling imported liquid flavor base of U.S. origin with
carbonated water did not substantially transform the U.S. liquid
base, and thus the origin of the finished wine cooler was the
U.S., the country of the liquid flavor base.
Diluting the imported pyranine 120 with 5-9 sodium sulfate
also does not chemically change the imported product. In fact,
we are advised by the Food and Chemical Branch that D&C Green #8
is a commercial designation for the Solvent Green #7 diluted, and thus the D&C Green #8 is classifiable in subheading
3204.19.11, HTSUS, rather than in subheading 3204.17, HTSUS, as
you state. Moreover, as you state in your submission, nothing is
added to the imported pyranine 120 in the U.S. that may cause a
change in the product's name, character or use.
Since the imported pyranine 120 is not substantially
transformed as a result of the U.S. processing, Tricon is not the
ultimate purchaser of the imported product. Rather the person(s)
who purchases the finished D&C Green #8 is the ultimate
purchaser. Accordingly, the finished article or its container
must be marked to indicate "Germany" as the country of origin of
the pyranine 120 to the ultimate purchaser.
Imported pyranine 120, also known as C.I. Solvent Green #7,
which is made in Germany which is used by Tricon to produce D&C
Green #8 in the U.S. in the manner described above, is not
substantially transformed as a result of the U.S. processing.
Thus, Tricolor is not the ultimate purchaser of the imported
product. Rather the person(s) who purchases the finished D&C
Green #8 is the ultimate purchaser. Accordingly, the finished
article or its container must be marked to indicate "Germany" as
the country of origin of the pyranine 120 to the ultimate
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
John Durant, Director
Commercial Rulings Division