HQ 735131 - Country of origin marking of potting soil mixture; peat; substantial transformation; mixture - United States International Trade Commision Rulings

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HQ 735131

October 18, 1993

MAR 2-05 CO:R:C:V 735131 LR

CATEGORY: MARKING

Charles Routh, Esq.
Garvey, Schubert & Barer
Second & Seneca Building
1191 Second Avenue
Seattle, Washington 98101

RE: Country of origin marking of potting soil mixture; peat; substantial transformation; mixture

Dear Mr. Routh:

This is in response to your letter dated April 15, 1993, requesting a ruling on behalf of Fisons Horticulture Inc. ("Fisons") on the country of origin marking requirements of potting soil imported from Canada.

FACTS:

Fisons imports potting soil from Canada. Over 80 percent of the product by both volume and value is peat moss produced in Canada. Although the actual proportion may vary depending on the specific product, part of the product is lime, fertilizer, wetting agents, perlite and other additives. A large proportion of these items is imported into Canada from the United States. They are mixed in Canada according to a set formula to make potting soil mix, filled into bags wrapped in plastic and exported to the United States. Approximately 27 different varieties and sizes of potting soil mix are involved. You indicate that Fisons has been importing potting soil from Canada for eight years marked as follows: "This package contains a mixture of products originating in Canada, U.S. or both". However, recently Customs officials in Blaine, WA have asked that the marking be changed to "Produced in Canada". Fisons would like a prospective ruling in order to ensure uniform Customs treatment throughout the country. If new wording is necessary, Fisons would like a reasonable time to use the existing bags and convert to the new marking.

ISSUE:

What is the proper country of origin marking for the potting soil imported from Canada?

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. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), indicates that the country of origin is 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. A substantial transformation occurs when the work or material added changes the name, character or use of the article in question.

Several Customs rulings involve the combining of ingredients according to a formula. In Headquarters Ruling Letter ("HRL") 733207, November 21, 1990, foreign and U.S. raw botanical ingredients were variously blended together in the U.S. to create aromatic products called "Potpourri". Customs found that the production of the potpourri in the U.S., according to formula, substantially transformed the imported constituent materials into a product of the U.S. The ruling states:

The herbs, flowers, spices and woodchips lose their separate identities upon incorporation into the potpourri, and acquire a new name, character, and use. Despite the fact that the botanicals, for example, remain recognizable as parts of flowers and plants, their character and use becomes entirely different, having taken on the commercial identity of the potpourri.

Similarly, in HRL 734076, September 10, 1991, Customs ruled that imported tomato powder is substantially transformed when it is blended with specific quantities of domestic ingredients to make seasoning mixes. The tomato powder, which constituted approximately 6% - 23% by weight of the finished product, was combined with seasonings, spices and other ingredients. However, in HRL 735085, June 4, 1993, Customs determined that frozen broccoli and cauliflower of Mexican origin were not substantially transformed when combined in the U.S. with frozen vegetables of U.S. origin. The determination was based in part on the fact that the broccoli and cauliflower remain clearly identifiable within the mixtures and are the largest (or among the largest) constituents by volume. The potpourri ruling was distinguished as follows:

Despite the fact that botanical items remained recognizable as parts of flowers and plants, their character and use became entirely different. They were blended to achieve a single pleasant aroma. We do not believe that the combining of the vegetables achieves the creation of a new article in the same sense or to the same degree as in the potpourri ruling.

In the case before us, we find that the lime, fertilizer, wetting agents, perlite and other additives are substantially transformed when they are combined in Canada according to formula with Canadian peat moss to form potting soil mix. These ingredients lose their separate identities and become an integral part of the potting soil mix. Unlike the broccoli and the cauliflower in HRL 735085, supra, which remained clearly identifiable within the mixture and were the largest or among the largest among the constituents by volume, the ingredients sent to Canada do not remain clearly identifiable and comprise a small portion both by volume and value of the finished product. Like the potpourri ingredients and the tomato powder, the lime, fertilizer, wetting agents, perlite and other additives are substantially transformed into a new article of commerce, namely potting soil mix, as a result of mixing them together in Canada along with Canadian peat moss. Accordingly, we find that when imported to the U.S., the potting soil mix is a product of Canada and should be clearly marked "Canada", "Product of Canada" or other similar marking.

The current marking, "This package contains a mixture of products originating in Canada, U.S. or both", is not acceptable. The origin of the constituent materials may be indicated only if the country of origin of the potting soil mix, Canada, is clearly indicated and the requirements of 19 CFR 134.46 are satisfied (i.e., the country of origin must be preceded by words such as "Made in" or "Product of" and must appear in comparable size letters and in close proximity to these references). For example, a marking such as "Product of Canada - contains Canadian Peat Moss and other ingredients from " would be acceptable.

Because the current method of marking has been used for so long and provides some origin information to the consumer, Customs officials at the port of entry are authorized to make reasonable accommodations to allow Fison to use existing bags while converting to the new marking. The field offices should be contacted directly regarding this matter.

HOLDING:

The present method of marking does not satisfy the requirements of 19 U.S.C. 1304 and 19 CFR Part 134. The potting soil mix should be marked to indicate Canada as the country of origin.

Sincerely,

John Durant, Director

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