OT:RR:CTF:FTM H326814 TJS
John Peterson, Esq.
Neville Peterson LLP
One Exchange Plaza
55 Broadway
Suite No. 2602
New York, NY 10006
RE: Affirmation of NY N326746; Country of Origin of Sea Urchin Roe Skeins
Dear Mr. Peterson,
This is in response to your request for reconsideration, dated August 15, 2022, of New York Ruling Letter (“NY”) N326746, issued to you on July 21, 2022. In NY N326746, U.S. Customs and Border Protection (“CBP”) determined that the country of origin of certain sea urchin roe skeins was China, Mexico, or Russia, depending on the flag of the vessel that harvested the sea urchins. For the reasons we set forth below, we affirm NY N326746 because the products at issue are not substantially transformed in Japan where the sea urchins are deshelled, cleaned, and packaged.
NY N326746 described the product at issue as follows:
The merchandise under consideration is “Uni” (also known as Sea Urchin Roe) which is essentially the sex organ of the sea urchin referred to as the gonads or corals. Five strips of Uni reside within the structure of an urchin, and range in color from rich gold to light yellow. They bear a resemblance to tongue in shape and outer texture with a creamy consistency.
You outline a scenario whereby divers from Chinese, Mexican or Russian flagged vessels harvest sea urchins in Japan. In various plants within the latter country, the sea urchins undergo processing that consists of cutting the shell around the mouth, removal of the mouth, splitting the shell for roe extraction, cleaning, draining, and treating the roe with alum for preservative purposes. The roe skeins are sorted by quality and size then packed. You state that the product is purchased by Asahisuisan Co., Ltd for sale to JFC Fresh Inc. who in turn will ship it by air to the United States for immediate use and consumption.
In your request for reconsideration, you contend that the sea urchins harvested by Chinese, Mexican, or Russian-flagged vessels are substantially transformed in Japan such that the imported “uni” should be considered a product of Japan for tariff and marking purposes. You argue that the “uni”, obtained by the processing in Japan, is a new and different article of commerce, having a name, character, and use different from that of the Russian, Chinese, and Mexican-origin sea urchins.
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 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, Customs and Border Protection Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b) defines “country of origin” as “the 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 to render such other country the “country of origin” within the meaning of this part.” A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use, which differs from the original material subjected to the process. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
The Court of International Trade indicated in Koru North America v. United States, 701 F. Supp. 229, 232 (Ct. Int’l Trade 1988) that the “Law of the Flag” applies to the country of origin of seafood, which means that the country of origin of the seafood follows the flag of the catching vessel. However, the Court also indicated that we need to consider whether the seafood is subsequently substantially transformed in another country. Id. at 234. In Koru, the Court considered whether the processing of be-headed and gutted fish (in South Korea) by thawing, skinning, de-boning, trimming, glazing, freezing, and packaging, constituted a substantial transformation. Id. at 235. The Court concluded that the fish that had been filleted no longer possessed the essential shape of a fish, and that the filleted fish had become its own discrete commercial good distinct from the whole fish when it first arrived in South Korea. Id.
CBP has distinguished Koru in certain instances concerning shellfish. For example, Headquarters Ruling Letter (“HQ”) 731763, dated May 17, 1989, held that raw shrimp imported into the United States and then peeled, deveined, cooked, frozen and repackaged was not substantially transformed. In that ruling, CBP determined that, unlike in Koru, the processing of the shrimp was considered a minor change which merely rendered the product more suitable for consumption. The character of the shrimp (i.e., its size and quality) was not changed by the processing. See also, HQ 563033 (July 6, 2004). Likewise, in HQ 560904, dated June 22, 1998, CBP found that whole, cooked crawfish from China was not substantially transformed in the United States where they were recooked, beheaded, peeled, and de-veined. CBP determined that these were simple operations that rendered the product ready for eating and left the identity of the crawfish intact. CBP further noted that the fundamental character of the crawfish was determined at the time of importation. See also, HQ 560931 (July 8, 1998).
Moreover, CBP has consistently found that shucking and cleaning scallops do not constitute a substantial transformation. See NY N326448 (June 23, 2022); NY N312451 (July 9, 2020); NY N304704 (July 3, 2019); NY N304403 (June 13, 2019). For example, in NY N304403, scallops harvested in Japan were exported frozen, whole, in shell to China where they were thawed, shucked, soaked in a water solution typically containing sodium tripolyphosphate, and individually quick frozen. The de-shelled scallops were then sorted and packed before shipment to the United States to be sold to distributors, wholesalers, and retail stores. CBP found that the scallops had not been substantially transformed as a result of the processing in China, and therefore the country of origin of the frozen scallops was Japan.
Similar to the rulings cited above, the instant case is distinguishable from Koru. Sea urchins are substantially distinct from fish and require different processing to make them fit for human consumption. In Koru, obtaining the fillet required skinning, de-boning, trimming, glazing, freezing and packaging fish that were already beheaded and gutted. 701 F. Supp. at 235. The processing in Koru was more extensive than the processing of the sea urchins at issue, which involve removing the mouth and shell, cleaning, preserving, and packaging. Rather, processing the sea urchins is akin to shucking scallops described in NY N326448 since both require removing a shell and cleaning and do not involve beheading, gutting, skinning, and trimming.
We find that the operations in Japan are minor processes that do not constitute substantial transformation. First, the processing does not result in a change of name. Although the imported products are the reproductive organs of sea urchins, they are commonly and commercially referred to as “sea urchin” or “uni.” You assert that the article that results from the processing in Japan has a new name (“uni”) which is distinct from the name of the creature from which it is processed (“sea urchin”). However, “uni” in Japanese directly translates to “sea urchin” in English. Since “uni” and “sea urchin” are interchangeable terms with the same meaning, there is no change of name. More importantly, the Japanese operations do not fundamentally change the product’s intended use for eating. Although the unshelled sea urchin roe skeins do not resemble the sea urchin creature, the sea urchins are harvested for their roe skeins, which are consumed raw. Like in HQ 731763 and HQ 560904, the shelling, cleaning, and preserving are simple processes that merely render the product suitable for consumption. Thus, the sea urchins are not a new article of commerce as a result of the processing in Japan.
In accordance with the foregoing, we affirm NY N326746, dated July 21, 2022, which correctly determined the country of origin of the sea urchins to be China, Mexico, or Russia, as determined by the flag of the catching vessel.
Sincerely,
Yuliya A. Gulis, Acting Director
Commercial and Trade Facilitation Division