CLA-2-03:OT:RR:NC:N2:231
Ms. Ashley Hong
Nissin International Transport USA Inc.
1540 W. 190th Street
Torrance, CA 90501
RE: The tariff classification, country of origin, and status under the United States - Korea Free Trade Agreement (UKFTA) of Frozen Tuna Loins. Correction to Ruling Number N306075.
Dear Ms. Hong:
This ruling modifies Ruling Number N306075, dated September 3, 2019, which contained a clerical error. The tariff classification for Frozen Tuna Loin was indicated as 0304.49.0190 instead of the correct 0304.87.0000. A complete corrected ruling follows.
This is a response to your letter dated September 3, 2019 requesting a tariff classification, country of origin determination and the applicability of the United States - Korea Free Trade Agreement (UKFTA) to Frozen Tuna Loins imported from Korea on behalf of your client, Wismettac Asian Foods (Santa Fe Springs, CA). You submitted a flow chart depicting the various stages of operation and a pictorial representation of the product.
You have outlined a scenario in which tuna is caught by a Chinese-flag vessel in Chinese ocean waters. Onboard the vessel, the heads, tails, gills and guts will be removed from the fish, which will then be frozen and exported to Korea. Although lacking heads, tails or viscera, the tuna will arrive in Korea having the basic look of a whole fish. In Korea, fish will be processed into loins, frozen, vacuum packed individually and then exported to the United States.
The applicable subheading for the Frozen Tuna Loins will be 0304.87.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Fish fillets and other fish meat (whether or not minced), fresh, chilled or frozen: Frozen fillets of other fish: Tunas (of the genus Thunnus), skipjack or stripe-bellied bonito (Euthynnus (Katsuwonus) pelamis).” The rate of duty will be free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current.
Trade Agreement – UKFTA
General Note 33, HTSUS, sets forth the criteria for determining whether a good is originating under the UKFTA. General Note 33(b), HTSUS, states that:
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if—
(i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both;
(ii) the good is produced entirely in the territory of Korea or of the United States, or both, and—
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and satisfies all other applicable requirements of this note and of applicable regulations; or
(iii) the good is produced entirely in the territory of Korea or of the United States, or both, exclusively from materials described in subdivisions (i) or (ii), above.
For the purposes of this note, the term “UKFTA country” refers only to Korea or to the United States.
Based on the facts provided, we find that the merchandise imported into the United States does not qualify for preferential treatment under the UKFTA since none of the above requirements are met. In Korea, the non-originating tuna loins from China undergo a tariff classification shift from heading 0303, HTSUS, to heading 0304, HTSUS, whereas the pertinent GN 33(o) rule requires a shift from another chapter of the tariff schedule.
Country of Origin
With regard to country of origin, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container)
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.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Pursuant to 19 CFR Section 134.1(b), the country of origin is 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 country the country of origin within the meaning of Part 134 of the regulations. 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). Whether a substantial transformation occurs is determined on a case-by-case basis.
In Koru North America v. United States, 701 F. Supp. 229 (CIT 1988), the court considered whether the processing of headed and gutted fish in South Korea by thawing, skinning, boning, trimming, freezing, and packaging constituted a substantial transformation. The court concluded that the processing performed in South Korea into “quick- frozen” fillets substantially transformed the headed fish because there was a change in name and character. The court noted that while the fish arrive in South Korea with the look of a whole fish, when they leave they no longer possess the essential shape of a fish. The fillets were considered discrete commercial goods and had a different tariff classification.
In the present case, Frozen Tuna Loins harvested in China that have been eviscerated, and from which the head and tails have been removed, are frozen and exported to Korea. In the latter country, the product is converted into loins and frozen before being shipped to the United States. We find that the processing in Korea is a substantial transformation, and that therefore the country of origin of the finished product, “Frozen Tuna Loins,” is Korea. The packages should be marked accordingly, e.g., “Product of Korea.”
Please note that seafood is subject to the Mandatory Country of Origin Labeling (“COOL”) requirements administered by the USDA’s Agricultural Marketing Service (AMS), we advise you to check with that agency for their further guidance on your scenario. Contact information for AMS is as follows:
USDA-AMS-LS-SA
Room 2607-S, Stop 0254
1400 Independence Avenue, SW
Washington, DC 20250-0254
Tel. (202) 720-4486
Website: www.ams.usda.gov/COOL
Email address for inquiries: [email protected]
This merchandise is subject to The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling the FDA at 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Ekeng Manczuk at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division