MAR 2-05 CO:R:C:V 733908 RSD
Kenneth M. Carmon, Branch Manager
F.W. Meyers & Co, Inc.
R.F.D. Wellesley Island
Alexandria Bay, New York 13607
RE: Country of origin marking of breakfast cereals, grains,
sugar coating, vitamin fortification, substantial transformation;
19 CFR 134.35
Dear Mr. Carmon:
This is in response to your letter dated October 31, 1990,
forwarding the letter of The Weetabix Company, dated October 16,
1991, requesting a ruling on the country of origin marking
requirements for breakfast cereals imported from Canada. The
Weetabix Company submitted a second letter dated December 17,
The Weetabix Company imports several different types of
breakfast cereals from Canada, which will be further processed in
the U.S. (Fruit Circles, Fruit Dots, Cocoa Dots & Toasted Grain
Circles) The following manufacturing operations are represented
to occur in Canada:
1) Dry ingredients are pneumatically conveyed to a batch mixer.
Each of the cereals includes either corn flour or corn meal from
the U.S. which comprises approximately 50% or more by weight of
the finished product and one or more of the following grains and
other products from Canada (wheat flour, oat flour, wheat gluten,
2) After being thoroughly mixed, the batch is pneumatically
conveyed to a storage hopper, and then is conveyed, at a
controlled rate to the extruder.
3) In a twin screw extruder the blended dry mix is mixed with
water and a liquid solution containing sugar (Denmark), salt
(Canada), food coloring (USA), vitamins and minerals (USA), if
required. The total mixture is subjected to shear and high
temperature for the short time it travels the distance of the
barrel of the extruder. The pressurized material molten puffs as
it exits the extruder, at which time it is cut into small pieces.
4) The small pieces of extruded, puffed intermediate cereal are
fed into a three stage fluid bed dryer. The first two stages are
heating processes and the final stage a cooling process.
5) The partially completed cereal is screened for fine and
oversized pieces, each being removed, and the remaining accepted
pieces are packed into bulk containers for shipment to the U.S.
You indicate that after being processed in Canada, the
cereal while edible, is mostly tasteless and/or bland and lacks
full vitamin fortification to meet advertised specifications.
Additionally, it is noted that proper packaging is an essential
part of the product because it must meet the standards of the
Food Drug Administration. The cereal is then further processed
in the U.S., where the following processing is completed:
1) Multi-colored cereal, specifically Fruit circles and Fruit
Dots, are blended equally by color.
2) The cereal is introduced into a coating reel where a sugar or
sugar substitute coating and flavoring, and vitamin fortification
is applied in two separate operations.
3) The coated cereal leaves the coating reel and is conveyed to
and through a dryer.
4) The dried finished cereal is passed over screens to remove
fines and then stored in holding tanks.
5) The holding tanks of finished cereal are fed into hoppers of
packaging machines for packaging into commercially accepted sized
6) At the end of each packaging line the retail size cartons are
packed into a shipping carton, palletized and overwrapped with
film into a shipping unit on a slipsheet.
Does the processing of breakfast cereal in the U.S. which
includes sugar coating, vitamin fortification, and packaging
constitute a substantial transformation?
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).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and the 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. The case of U.S. v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in
manufacture which results in an article having a name, character
or use differing from that of the constituent article will be
considered substantially transformed. In such circumstances the
U.S. manufacturer is the ultimate purchaser. The imported article
is excepted from individual marking and only the outermost
container is required to be marked. (see 19 CFR 134.35).
In National Juice Products Association v. United States, 10
C.I.T. 48, 628 F. Supp. 978 (1986), the Court of International
Trade upheld Customs' determination that imported orange juice
concentrate is not substantially transformed when it is processed
in the U.S. into retail orange juice products. Although the
orange juice concentrate at issue in that case underwent
significant processing, was mixed with orange essences and oils,
purified and dechlorinated water, and was either packaged in cans
and frozen or pasteurized and packaged in liquid form, Customs
found that such processing did not change the fundamental
character of the orange juice concentrate. Customs further
determined, and the court agreed, that it was the orange juice
concentrate that imparted the essential character to the final
In HQ 724640, July 2, 1984, C.S.D. 84-112, Customs found
that notwithstanding the complex domestic processing of imported
crude honey into refined honey, the product remained honey-in a
more refined state than imported, but not fundamentally changed.
In HQ 729256, May 23, 1988, Customs noted that the processing of
smoked salmon was not a substantial transformation even though
the taste may be changed.
In this case, various ingredients are combined and processed
in Canada to make breakfast cereals. Each of the ingredients
used is substantially transformed in Canada and becomes an
integral part of the cereal. The cereal that is imported to the
U.S. is a product of Canada. The subsequent processing done in
the U.S. involving sugar coating, vitamin fortification,
packaging, and other miscellaneous processing does not alter the
fundamental character of the breakfast cereal. Although this
processing may be necessary for the product to be marketable and
may add some value, it does not transform the imported product
into an article with a different name, character, or use. As in
the cases cited above, the product has its fundamental character
at the time it enters the U.S. and it is not changed by the U.S.
processing. Before it enters the U.S. the product looks like
breakfast cereal, and has the consistency of puffed grains. In
addition, it already contains all the main ingredients, and even
contains sugar and vitamins which are already added to the cereal
in Canada. In other words, the product before the U.S.
processing is breakfast cereal and remains breakfast cereal after
the U.S. processing. Accordingly, we find that the domestic
processing does not constitute a substantial transformation and
the containers for breakfast cereal must be marked with the
country of origin, which in this case, is Canada.
Under the provisions of section 134.25, Customs Regulations
(19 CFR 134.25) if an article which is incapable of being marked
is intended to the repacked in new containers for sale to an
ultimate purchaser after it release from Customs custody, the
importer shall certify to the district director that the new
container shall be marked to indicate the country of origin of
the article in accordance with 19 CFR Part 134 or if the article
is intended to be sold or transferred to a subsequent purchaser
or repacker, the importer shall notify such purchaser or
transferee, in writing, at the time of sale or transfer, that any
repacking of the article must conform to these requirements. The
importer or his authorized agent shall sign a statement to this
effect. In this case, because the imported breakfast cereal
cannot be marked and the product will be repackaged before it
reaches the ultimate purchaser, the certification procedures
should be followed.
The processing of breakfast cereal in the U.S. by sugar
coating, vitamin fortification, packaging, and other
miscellaneous processing does not constitute a substantial transformation. The product remains an article of foreign origin
which must be marked with its country of origin. The importer
must follow the certification procedures for repacking in 19 CFR
John Durant, Director
Commercial Ruling Division