CLA-2-03:OT:RR:NC:N2:231
Ms. Mary Salimbangon
Philbest Canning Corporation
Purok Saydala, Makar - Siguel Road
General Santos City, 9500
Philippines
RE: The tariff classification and country of origin of Canned Precooked Tuna Loins.
Dear Ms. Salimbangon:
In your letter dated July 30, 2020, you requested a tariff classification and country of origin ruling determination on “Canned Precooked Tuna Loins”.
The merchandise under consideration is Bonito tuna caught by a Chinese-flagged vessel. The fish is cleaned, cooked, and the head, skin, dark meat, belly flaps and rib bones will be removed in China. The remaining tuna loins are packaged, frozen and shipped from China to the Philippines where the loins are thawed, cut into chunks and canned with added salt, and either water or oil. You have stated that the species of fish used for the product will be either Auxis thazard or Euthynnus Affinis. It is noted that Auxis thazard has numerous common and local names, including frigate tuna, frigate mackerel, bonito and others. Likewise, Euthynnus affinis is known by the names kawakawa, black skipjack, little tuna, mackerel tuna, bonito and others. The “Canned Precooked Tuna Loins” will be imported for sale to US-based clients.
In your letter, you suggested classification of the product under subheading 1604.14, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: “Prepared or preserved fish…: Fish, whole or in pieces, but not minced: Tunas, skipjack and bonito (Sarda spp.). “ We disagree. The product at issue is a different genus of tuna from that which is specified in the text to the heading.
The applicable subheading for the Canned Bonito Tuna (if in water), will be 1604.19.1000, HTSUS, which provides for: “Prepared or preserved fish…: Fish, whole or in pieces, but not minced: Other (including yellowtail): In airtight containers: Not in oil: Bonito, yellowtail and pollock.” The rate of duty will be 4% ad valorem.
The applicable subheading for Canned Bonito Tuna (if in oil) will be 1604.19.2500, (HTSUS), which provides for: “Prepared or preserved fish…: Fish, whole or in pieces, but not minced: Other (including yellowtail): In airtight containers: In oil: Bonito, yellowtail and pollock.” The rate of duty will be 5 percent ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 1604.19.1000 and 1604.19.2500, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 1604.19.0000 and 1604.19.2500, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 "country of origin" is defined in 19 CFR 134.1(b) 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 in order to render such other country the 'country of origin' within the meaning of this part.
The courts have held that 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (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 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
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 arrived in South Korea with the look of a whole fish, when they left they no longer possessed the essential shape of a fish. The fillets were considered discrete commercial goods and had a different tariff classification.
In the present instance, Bonito tuna, which is harvested in China, is cooked, stripped of head, skin, dark meat, belly flaps and rib bones. The remaining tuna loins are packaged, frozen and shipped to the Philippines where the loins are thawed, cut into chunks and canned with salt and either water or oil. The finished product will subsequently be shipped to the United States for retail sale. We find that the tuna has not been substantially transformed due to the processing in the Philippines, and that therefore the country of origin of the “Canned Precooked Tuna Loins,” is China.
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 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