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HQ 734281


February 13, 1992

MAR-2-05 CO:R:C:V 734281 NL

CATEGORY: MARKING

Ms. Amy Peng
Western Overseas Trade & Development Corp. 1210 Jefferson Street # C
Anaheim, CA 92807

RE: Country of Origin Marking - Preserved Mushrooms; section 1907 Omnibus Trade and Competitiveness Act of 1988 (Pub. L. No. 100-418); Country of Growth.

Dear Ms. Peng:

This is in response to your inquiry of July 22, 1991, in which you request information concerning the requirements for marking the country of origin of canned mushrooms.

FACTS:

At the direction of U.S. Customs officials at the port of Jacksonville, Florida, Western Overseas Trade and Development has prepared new labels for canned mushrooms to indicate that the product was grown in China. Jacksonville Customs has advised this office that Western and several other importers had imported canned mushrooms which were marked simply, "Product of Hong Kong".

The new labels have been submitted to this office for a determination whether the markings comply with the requirements of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304). The "Storm King" brand label is marked "Product of Hong Kong", while after the statement of ingredients appear the words, "(Grown in China)". The "Celebrity" brand label also provides the same formulation: "Product of Hong King"/ "(Grown in China)".

ISSUE:

What terminology is required or permissible under the Tariff Act to designate the country of origin of canned mushrooms?

LAW AND ANALYSIS:

As provided at 19 U.S.C. 1304, every article of foreign origin imported into the U.S. must be marked so as to indicate the English name of its country of origin to the ultimate purchaser in the U.S. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. "Country of origin" is defined at 19 CFR 134.1(b) as the country in which the imported article was manufactured, produced, or grown. Further work or material added in a second country must effect a substantial transformation in order to render the second country the "country of origin". A substantial transformation is said to occur if, as a result of manufacture or further processing, an article having a different name, character, or use emerges.

A recent enactment establishes specific marking requirements for preserved mushrooms. Section 1907(b) of the Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, provides:

MARKING OF CONTAINERS OF IMPORTED MUSHROOMS - Imported preserved mushrooms shall not be considered to be in compliance with section 304 of the Tariff Act of 1930 (19 U.S.C. 1304) or any other law relating to the marking of imported articles unless the containers therof indicate in English the country in which the mushrooms were grown.

A review of the legislative history indicates that this provision was intended to specify marking requirements for mushrooms grown in the People's Republic of China which were cooked and then saturated with a heavy salt solution. After importation into the U.S. in large containers the mushrooms were being washed and desalted before canning by domestic firms.

In our opinion the effect of section 1907 of the 1988 Trade Act is to specify that irrespective of further processing, the country where mushrooms are grown is the country of origin for purposes of 19 U.S.C. 1304. Thus, notwithstanding additional preservative steps performed on the mushrooms incident to canning or otherwise packing them, the marking, "Grown in ___" is the required indication of origin pursuant to section 304. It follows that if mushrooms are grown in China, marking the labels on their containers "Product of Hong Kong" is not acceptable, the term "product of" being reserved under section 304 for indications of country of origin.

To the extent that these labels make reference to Hong Kong, it would be acceptable to state that the mushrooms are packed in Hong Kong. It is our understanding that this marking is required under regulations of the Food and Drug Administration. For purposes of section 304, however, in view of section 1907 of the 1988 Trade Act, the marking "packed in" cannot be regarded as sufficient indication of country of origin for preserved mushrooms.

HOLDING:

The sample labels properly indicate China as the country of growth of the canned mushrooms as required by section 1907 of the 1988 Trade Act. The country of growth is the country of origin for purposes of section 304 of the Tariff Act. The marking "product of Hong Kong" is inaccurate and not acceptable.

Sincerely,

John Durant, Director
Commercial Rulings Division

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