CLA-2-19:OT:RR:NC:N2:228
Ms. Sheri Lawson
Willson International, Inc.
160 Wales Avenue, Ste, 100
Tonawanda, NY 14150
RE: The tariff classification, country of origin, and country of origin marking of rice products from the United Kindom
Dear Ms. Lawson:
In your letter dated December 10, 2015, you requested a tariff classification, country of origin, and country of origin marking ruling on behalf of Dainty Foods, Canada.
Product specification sheets, and a process flow diagram accompanied your inquiry. Samples of the products were not submitted for review. Basmati Rice (item# BR001), Brown Rice (item# WR001), and Long Grain Rice (item# LG001) are said to be shelf-stable, cooked rice products, packed in flexible retort pouches that have been sterilized. Basmati Rice is made from 60 percent water, 38 percent parboiled basmati rice, and 2 percent sunflower oil. Long Grain Rice is made from 58 percent water, 40 percent parboiled white long grain rice, and 2 percent sunflower oil. Brown Rice is made from 57 percent water, 42 percent parboiled brown long grain rice, and 1 percent sunflower oil.
The basmati rice originates in India. The long grain rice is a product of Thailand, Spain, Brazil, or Greece. The brown long grain rice is a product of the United States (U.S.), Spain, Argentina, or Brazil. The water will be sourced from the United Kingdom (UK); and the sunflower oil will be sourced from France, or the UK. Each pouch of each product will contain rice from only one country. The ingredients will be combined in Wales, UK, and go through a thermal retort process to fully cook the products in pouches. The consumer can cook them in a microwave for 90 seconds on 750 W or 2 minutes on 650 W. The products can also be cooked in a wok or pan with 15 ml water for 3-4 minutes.
In your letter, you suggested that when the Brown Rice is produced using the U.S. rice and returned to the United States, it will be classified under subheading 9801.00.1098, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. We disagree. The exported U.S. rice has been cooked in Wales, UK. The cooking process disqualifies the returned Brown Rice for subheading 9801.00.1098, HTSUS.
The applicable subheading for the three rice products will be 1904.90.0140, HTSUS, which provides for cereals (other than corn (maize)) in grain form . . . pre-cooked or otherwise prepared, not elsewhere specified or included . . . other . . . other. The general rate of duty will be 14 percent ad valorem.
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 http://www.usitc.gov/tata/hts/.
Articles classifiable under subheading 1904.90.0140, HTSUS, which are products of India, Brazil or Thailand may be entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations. The GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check our Web site at www.cbp.gov and search for the term “GSP”.
The marking statute, 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 and Border Protection (CBP) Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
Section 134.1(b) of the regulations, 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 this Part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). 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 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
In Headquarters Ruling Letter (HQ) 967925, dated February 28, 2006, CBP determined that thermal processing, or cooking did not result in the "Wild Rice" product with a different name, character, or use. The essential character of the "Wild Rice" product was retained. The wild rice ingredient of U.S. origin had not undergone a substantial transformation.
In this instance, the three rice products that have undergone the cooking and sterilizing processes in the UK are analogous to the thermal process performed on the “Wild Rice” product in a retort in HQ 967925. Therefore, the parboiled basmati rice, parboiled white long grain rice, and parboiled brown long grain rice do not undergo a substantial transformation in the UK. The countries of origin of the imported Basmati Rice, Long Grain Rice, and Brown Rice will remain to be the countries of origin of the respective parboiled rice as sourced. Products of the United States are not subject to the country of origin marking requirements of 19 U.S.C. 1304.
Section 134.1(d), CBP Regulations (19 CFR 134.1(d)), defines the ultimate purchaser as “generally the last person in the U.S. who will receive the article in the form in which it was imported. ... It is not feasible to state who will be the ‘ultimate purchaser’ in every circumstance.” If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. In this case, when the three products are sold at retail shops in their imported form, the ultimate purchasers of the three products are the consumers who purchase the products at retail.
As provided in section 134.41(b), CBP Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
In section 134.1(k), CBP Regulations (19 C.F.R. 134.1(k)), “Conspicuous” means capable of being easily seen with normal handling of the article or container.
With regard to the permanency of a marking, section 134.41(a), CBP Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44,CBP Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
In this instance, the retail containers of the products must be marked in a conspicuous place as legibly, indelibly and permanently as the nature of theirs containers will permit to indicate the country of origin of each product. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC directly.
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 FDA at 301-575-0156, or at the Web site ww.fda.gov/oc/bioterrorism/bioact.html.
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 Bruce N. Hadley, Jr. at [email protected].
Sincerely,
Deborah C. Marinucci
Acting Director
National Commodity Specialist Division