MAR 2-05 CO:R:C:V 732315 pmh
Ms. Deborah Mayville
A.N. Deringer, Inc.
P.O. Box 824
Fort Covington, NY 12837-0824
RE: Country of origin marking for imported paprika
Dear Ms. Mayville:
This is in response to your letter dated February 2, 1989,
on behalf of your client, Carno Canada Corporation, requesting a
ruling on the country of origin marking requirements for imported
paprika. Your letter has been forwarded to us from our New York
office.
FACTS:
The paprika is of Spanish origin. It is sifted, packaged in
bulk containers and treated for bacteria in Spain. It is
subsequently shipped to Canada where it is transferred from the
bulk containers into smaller retail containers, labelled and
sealed. The paprika is then imported into the U.S. for
distribution to retailers for sale in the U.S.
ISSUE:
Whether repacking Spanish paprika in Canada for retail sale
in the U.S. constitutes a substantial transformation so as to
change the country of origin.
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 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. Part 134, Customs
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Regulations (19 CFR Part 134), implements the country of origin
marking requirements and exceptions of 19 U.S.C. 1304. Section
134.1(b), Customs Regulations (19 CFR 134.1(b)), defines the
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 this
part."
In defining what constitutes a substantial transformation,
Courts have held that the further work or material added to an
article must result in the article losing its original identity
and taking on a new name, character or use. See United States v.
Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267, C.A.D. 98 (1940). In
National Juice Products Association v. United States, 10 C.I.T.
48, 628 F. Supp. 978 (1986), the Court upheld Customs'
determination that orange juice concentrate is not substantially
transformed when it is processed into retail orange juice
products. Although the orange juice concentrate in that case
underwent significant processing, was mixed with orange essences
and oils, purified water and was either packaged in cans and
frozen or pastuerized and packaged in liquid form, Customs found
that such processing did not change the fundamental character of
the orange juice concentrate.
In C.S.D. 86-28, dated June 25, 1986, Customs determined
that raw broccoli was not substantially transformed as a result
of sorting, trimming, cutting into pieces, steam blanching,
freezing and packaging. In that case Customs based its decision
on the fact that the subject vegetables retained their
fundamental character and the processing and packaging was, in
fact, performed to preserve the original characteristics of the
vegetables.
In this case, the Spanish paprika does not undergo any
processing in Canada. It is merely packaged for retail sale.
Regardless of the cost of such packaging, it does not result in a
substantial transformation of the paprika. As the juice
concentrate in National Juice and the broccoli in C.S.D. 86-28,
the paprika here retains its original characteristics and
identity and the packaging is performed only to preserve those
characteristics and prepare it for retail sale.
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While not specifically stated, it appears that the retail
bottles used to package the paprika are of Canadian origin.
Section 134.23, Customs Regulations (19 CFR 134.23), requires
containers or holders designed for or capable of reuse after the
contents have been consumed to be individually marked to indicate
the country of their own origin with a marking such as,
"Container Made in (name of country). However, disposable
containers which are ordinarily discarded after the contents have
been consumed are not required to be marked to show the country
of their own origin pursuant to section 134.24(d), Customs
Regulations (19 CFR 134.24(d)). It is not clear from the
information submitted whether the bottles used to package the
paprika are the type typically discarded after the contents have
been consumed or not.
HOLDING:
Paprika which is of Spanish origin and is merely packaged in
Canada for retail, does not undergo a substantial transformation.
The paprika remains a product of Spain and must be marked
accordingly. Since the paprika is incapable of being marked, the
retail container must be marked to indicate the origin of the
paprika. In addition, if the containers used to package the
paprika are bottles of Canadian origin, capable of reuse after
the contents have been consumed, they have to be marked as
products of Canada pursuant to 19 CFR 134.23 (e.g., "Bottles
Product of Canada; Contents Product of Spain").
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs and
Admissibility Branch