Ms. Jing Zhang
Mayer Brown LLP
1999 K Street, NW
Washington, DC 20006
RE: The country of origin and marking of fish oil softgels from Peru
Dear Ms. Zhang:
In your letter dated February 20, 2020, you requested a country of origin and marking ruling, and the applicability of the duty under Section 301 of the Trade Act of 1974 as amended to the articles subject to this ruling, on behalf of your client, Sirio Nutrition Co., Ltd.
Photocopies of the products, ingredients breakdowns, and manufacturing narrative descriptions accompanied your inquiry.
Compound Fish Oil Softgels 165 are said to contain fish oil derived from anchovies, sardines and tuna from Peru, and vitamin D3 from China. The fish oil is refined, bleached, undergoes cold filtration and is deodorized in Peru. It will be blended, encapsulated, enteric coated and packaged in bulk in China.
Compound Fish Oil Softgels 173 are said to contain fish oil derived from anchovies, sardines, and tuna from Peru, vitamin D3 and Vitamin E from China, and lemon oil from Italy. The fish oil is refined, bleached, undergoes cold filtration, and is deodorized in Peru. It will be blended, encapsulated, enteric coated and packaged in bulk in China.
Compound Fish Oil Softgels 175 are said to contain fish oil derived from anchovies, sardines, and tuna from Peru, vitamin E from Argentina, and lemon oil from Italy. The fish oil is refined, bleached, undergoes cold filtration, and is deodorized in Peru. It will be blended, encapsulated, enteric coated and packaged in bulk in China.
Fish Oil Softgels 02Y are said to contain fish oil derived from anchovies, sardines, and tuna from Peru, and vitamin E from Argentina. The fish oil is refined, bleached, undergoes cold filtration, and is deodorized in Peru. It will be blended, encapsulated, enteric coated and packaged in bulk in China.
You inquire as to the country of origin of the four fish oil softgel products. The fish oils are said to be derived from fish that are harvested in Peru where they are refined, bleached, undergo cold filtration, and deodorized. They are then shipped to China where the ingredients are blended, encapsulated, enteric coated and packaged in bulk for export to the United States.
As defined in 19 CFR 134.1(b), "country of origin" means 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 change the country of origin of the article. 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. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and National Juice Products Association v. United States, 628 F. Supp. 978 (Ct. Int'l Trade 1986).
CBP has generally held that the processing of pharmaceutical products from bulk form into measured doses does not result in a substantial transformation of the product. See, e.g., Headquarters Ruling Letter ("HQ") H303093 dated August 28, 2019; HQ H284694, dated August 22, 2017; HQ H233356, dated December 26, 2012; New York Ruling Latter ("NY") N01772, dated October 26, 2007; and, HQ H735146, dated November 15, 1993.
In the present case, as in the cases cited above, the processing of the fish oil into dosage form as softgel capsules will not result in a substantial transformation. The fish oil originates from Peru and is encapsulated in China. No change in name occurs in China because the product is referred to as "fish oil" both before and after encapsulation. Furthermore, in this case, the fish oil retains its chemical and physical properties after blending, encapsulation and coating, and has the same predetermined medicinal use both as bulk and as softgel capsules. Therefore, no substantial transformation occurred in China and the country of origin of the four fish oil softgel products is Peru. Therefore, the duty under Section 301 of the Trade Act of 1974, as amended, does not apply to the articles subject to this ruling.
Please note that even though the country of origin of the fish oil is Peru, this product is not eligible for preferential tariff treatment under the United States-Peru Trade Promotion Agreement. In HQ H078175, CBP held that fish oil derived from Peru and shipped to China for encapsulation was not considered an originating good under General Note 32(c)(iii), implementing the transit and transshipment provision of the Peru FTA.
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 Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
Marking the packages of these fish oil soft gels, "Product of Peru," would be an acceptable marking.
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.
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 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 Bruce N. Hadley, Jr. at firstname.lastname@example.org.
Steven A. Mack
National Commodity Specialist Division