CLA-2-03:OT:RR:NC:N2:231
Ms. Lorrie Roddy
Edward J. Zarach & Associates Inc.
1099 Pratt Boulevard
Elk Grove Village, IL 60007
RE: The tariff classification and country of origin of Frozen Cleaned Squid
Dear Ms. Roddy:
In your letter dated November 21, 2018, you requested a tariff classification ruling on behalf of your client, Lund’s Fisheries Inc. (Cape May, NJ).
You have outlined a scenario where whole, uncleaned frozen squid of U.S.-origin will be shipped from the United States to China. The squid are of two different species, Doryteuthis pealei (also known as Loligo pealei or Longfin inshore squid) and Illex illecebrosus. In China, the squid will be defrosted, fully cleaned, and refrozen. The cleaning process will consist of the removal of the head, tentacles, skin and wings; and the evisceration of the body or tube to eliminate the innards. The cleaned tube is then either kept whole or cut into rings. The resulting cleaned squid will be packed into 2.5-pound trays in various combinations such as cleaned tubes with tentacles, cleaned rings with tentacles, cleaned rings and cleaned tubes. The trays are blast frozen, packed into polyurethane bags and heat sealed. The bags are packed four per each master carton and returned to the U.S. for sale to restaurants, wholesale and retail outlets.
You seek a determination as to the proper tariff classification and country of origin of the above-described product for marking purposes. In addition, you wish to know whether the chapter 98 provision of the HTSUS will be applicable to the finished cleaned squid when it is imported into the U.S. from China.
Subheading 9801.00.10, HTSUS, provides for the duty-free entry of 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, provided there has been compliance with the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1). According to the scenario outlined in your ruling letter, the frozen, whole, uncleaned squid that will be sent abroad will undergo various additional processes before they are returned to the United States. The squid will be trimmed and cleaned. You described the processing as cleaning (i.e. removal of the head, tentacles, skin, wings and innards), freezing, packaging, and labeling of the ensuing tubes, tentacles and rings in various packs of unspecified sizes. In this case, the process of cleaning and reducing the frozen whole squid into frozen tubes, tentacles and rings will serve to advance in value and improve the condition of the squid that are to be exported to China. Accordingly, the squid is not entitled to classification under subheading 9801.00.1098, HTSUS.
The applicable subheading for the Frozen Doryteuthis pealei will be 0307.43.0024, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Molluscs, whether in shell or not, live, fresh, chilled, frozen, dried, salted or in brine; smoked molluscs, whether in shell or not, whether or not cooked before or during the smoking process; flours, meals and pellets of molluscs, fit for human consumption: Cuttlefish and squid: Frozen squid: Other: Loligo pealei. The rate of duty will be Free.
The applicable subheading for the Frozen Illex illecebrosus will be 0307.43.0029, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Molluscs, whether in shell or not, live, fresh, chilled, frozen, dried, salted or in brine; smoked molluscs, whether in shell or not, whether or not cooked before or during the smoking process; flours, meals and pellets of molluscs, fit for human consumption: Cuttlefish and squid: Frozen squid: Other: Other. 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.
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.
As provided in section 134.41(b), Customs 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.
With regard to the permanency of a marking, section 134.41(a), Customs 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, Customs 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.
Part 134, CBP Regulations (19 C.F.R. §134) implements the country of origin marking requirements of 19 U.S.C. §1304. 19 C.F.R. §134.1(b) defines “country of origin” as:
[T]he 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 in order to render such other country the “country of origin” within the meaning of [the marking regulations]…
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 the case of the cleaned squid in the above-described forms, this office finds that the article is not substantially transformed because of the processing in China. Accordingly, based on the information presented, the packages of squid are products of the United States for CBP marking purposes. Thus, since the packages of squid are not considered “foreign” products, they are not required to be marked with their country of origin for CBP purposes. The question of whether their labeling may consist of or include the phrase “Product of USA” is under the jurisdiction of the Federal Trade Commission (FTC), which may be contacted for advice at 1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006.
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-SAT
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 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