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