HQ 0734524 - Country of Origin Marking for Frozen Meals from Canada; Ultimate Purchaser; Airlines; 19 U.S.C. 1304(a)(3)(D); 19 CFR 134.32(d); 19 CFR 134.1(d); HQ 729477 revoked. - United States International Trade Commision Rulings

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HQ 734524
July 30, 1992

MAR-2-05 CO:R:C:V 734524 ER

CATEGORY: MARKING

Mr. Ed Baker
A.N. Deringer, Inc.
30 West Service Road
Champlain, New York 12919-9703

RE: Country of Origin Marking for Frozen Meals from Canada; Ultimate Purchaser; Airlines; 19 U.S.C. 1304(a)(3)(D); 19 CFR 134.32(d); 19 CFR 134.1(d); HQ 729477 revoked.

Dear Mr. Baker:

This is in response to your letter of February 17, 1992, on behalf of your client, Delta Dailyfood (Canada) Inc., 26 rue Seguin, Rigaud (Quebec) Canada, JOP 1PO, concerning the country of origin marking requirements for frozen meals imported by Delta Dailyfood and sold by them to KLM airlines in the U.S. Samples of the meal container and the master outer container were provided.

FACTS:

The frozen meals are imported into the U.S. in individual sealed containers with peel-off tops, measuring approximately 4" width x 6.5" length x 1.5" depth, and which are shipped inside master containers in sets of 30. The master cartons are clearly and conspicuously marked "Product of Canada". Delta Dailyfood sells the meals to KLM Airlines in the U.S. The frozen meals are never sold individually at retail or otherwise.

No details were provided regarding the manner of preparation required prior to serving the meals to the passengers, nor were the contents of the meal described. From looking at the sample provided of an individual container (which features on it the words "chicken, apple, almond and raisins"), we assume that before service the frozen meals only require heating.

The meals are not consumed in the U.S. but are instead served to passengers during trans-atlantic flights as a part of KLM's overall service. The food service is a complimentary service covered by a tariff to this effect which is on file with the U.S. Department of Transportation. The meals are not sold for separate consideration.

In your submission you included copies of correspondence from KLM to Delta Dailyfood; from the Food and Drug Administration ("F.D.A.") to Delta Dailyfood; from the Canadian Department of Agriculture, Meat and Poultry Products Division, to Delta Dailyfood; and from the U.S. Department of Agriculture, Food Safety and Inspection Service ("F.S.I.S.") to the Canadian Department of Agriculture, Meat and Poultry Products Division. From this correspondence it is made apparent that F.D.A. does not regulate such meals so long as the they are used on flights which depart the U.S. and fly to Europe or any other foreign destination without additional stops in the U.S. or its territories. Furthermore, F.S.I.S. exempts frozen meals prepared for airline customers from U.S. meat and poultry inspection if they are in transit in the U.S. and are intended for use on international flights that do not make additional stops in the U.S. F.S.I.S. requires no notification upon importation, nor any permit or authorization to import these products.

ISSUE:

Who is the ultimate purchaser of the frozen meals that are served to passengers on KLM trans-atlantic fights?

Are the individual frozen meals excepted from country of origin marking?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304) provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or 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. Congressional intent in enacting 19 U.S.C. 1304 was that the ultimate purchaser should be able to know by an inspection of the marking on the imported ngoods the country of which the goods are the product. Part 134, Customs Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Among the exceptions to country of origin marking is 19 U.S.C. 1304(a)(3)(D), also provided for in section 134.32(d), Customs Regulations (19 CFR 134.32(d)). That section provides that articles for which the marking of their containers will reasonably indicate the country of origin of the articles may be excepted from country of origin marking. However, for the exception to apply Customs must be satisfied that the articles will reach the "ultimate purchaser" in the original, properly marked containers in which the articles were imported. Section

134.1(d), Customs 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.

In an information letter, HQ 732988 (May 30, 1990), surmising that the ultimate purchaser of frozen food meals would be the airline rather than the passenger, Customs found that such frozen meals would probably be excepted from individual marking so long as the ultimate purchaser (the airline) received the meals in bulk with proper marking on the outermost container in which they were imported. This remains Customs' position.

In Legal Determination 79-0382 (HQ 710493 dated July 17, 1979), Customs found that the ultimate purchaser was not necessarily the ultimate user or consumer. In that case, dinnerware was imported for sale by the importer to a company that resold it to an airline company for its use in serving in- flight meals. The airline company received the dinnerware in the original, unopened and properly marked bulk containers. There Customs found that the ultimate purchaser was the airline company, not the airline passenger, and the dinnerware was excepted from marking as provided for in 19 U.S.C. 1304(a)(3)(D). However in HQ 724335 (January 16, 1984), Customs found that airline passengers were the ultimate purchasers of plastic cups and glasses of durable nature which the passengers could keep. Accordingly, the cups and glasses had to be marked with country of origin. The distinguishing factor between these two decisions which was determinative as to whether the imported goods should be marked was the fact that in the former decision the passengers could not take the goods with them for use elsewhere, and in the latter decision they could. Contra, HQ 729477 (May 2, 1986) (where Customs found that the ultimate purchasers of air sickness bags were the individual airline passengers who received the bags incidental to the service of air transport for which consideration was paid and for whose convenience they were made available -- hence, the bags had to be marked with country of origin.)

For what purpose and in what manner imported goods are to be used has been the focus of several marking decisions which are relevant in the instant case. When imported goods are purchased by an employer for use exclusively at work by its employees, the imported merchandise has been excepted from country of origin marking. See HQ 734304 (January 28, 1992) (disposable industrial work coveralls distributed free of charge to employees at an industrial plant (the ultimate purchaser) for use on the job are excepted from individual marking); and HQ 732793 (December 20, 1989) (employers are the ultimate purchasers of industrial work gloves distributed free of charge to employees on the job for use at work; such gloves are excepted from individual marking). Similarly, imported goods purchased by hospitals for use exclusively on the premises by staff or patients have also been excepted from individual marking. HQ 730945 (August 11, 1988) (hospitals are the ultimate purchasers of imported patient identification bracelets; such items are excepted from individual marking); HQ 715640 (June 16, 1981) (hospitals are the ultimate purchasers of imported disposable paper shoe covers, head covers, drape sheets, gowns, towels and other similar products, none of which have to be individually marked to indicate country of origin); HQ 723745 (February 6, 1984) (hospitals are the ultimate purchasers of imported surgical masks; such items do not have to be individually marked); and HQ 730840 (January 12, 1988) (hospitals are the ultimate purchasers of imported surgical gloves; such gloves are excepted from individual marking).

Like imported items purchased by employers and distributed to their employees for use only on work premises and like the various imported items used by hospital staff and patients while on hospital premises, prepared frozen meals are purchased by the airline only for passenger consumption on the airplane during flight. In none of these situations is the imported merchandise ever otherwise sold or intended for retention and use other than on site or in flight. Accordingly, Customs believes that the ultimate purchaser of the frozen meals is the airline, KLM, and not the passenger. Therefore, so long as KLM continues to receive the frozen meals in properly marked master cartons, the individual meals may be excepted from country of origin marking. To the extent that HQ 729477 supra is inconsistent with this ruling it is hereby revoked.

HOLDING:

For purposes of country of origin marking, the ultimate purchaser of frozen airline meals is the airline and not the airline passenger. Accordingly, pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d) the packaged frozen meals are excepted from individual country of origin marking so long as the ultimate purchaser, KLM, receives the frozen meals in bulk in the original, unopened master cartons which are properly marked with country of origin.

Sincerely,

John Durant, Director
Commercial Rulings Division

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