HQ 560322 - Country of origin marking of crab reprocessed in the U.S.; substantial transformation; HRL 732939 - United States International Trade Commision Rulings

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HQ
560322
March 19, 1997
MAR-05 RR:TC:SM 560322 BLS

CATEGORY: MARKING

Port Director
Seattle, Washington 98174

RE: Country of origin marking of crab reprocessed in the U.S.; substantial transformation; HRL 732939

Dear Sir:

This is in reference to a letter dated February 11, 1997, from the Tyson Seafood Group (Tyson), requesting a ruling concerning the country of origin marking requirements for foreign-origin Opilio crabmeat repacked in the U.S. The product is currently being entered through the port of Seattle.

FACTS:

Tyson states that Alaskan and Russian caught Opilio crab are packed in bulk and entered into the U.S. in master cartons. In the U.S., the following operations are performed;

1) The crab is removed and separated into individual clusters.

2) Marine growth, gills and gurry that are not removed during primary processing are removed by scraping with a knife or cutting with a saw.

3) Product is glazed with ice to protect it from dehydration during frozen storage.

4) Product that is unusable in cluster packs is removed. This includes crab with bluing, broken crab, bodies without legs, walking legs, loose claws and individual legs. These products are packed for sale in this form, or held for processing at a later date.

5) Product is sorted by size and color and packaged accordingly. (Legs and claws that are removed during processing are scored with a saw and custom packed for various customers.)

ISSUE:

What are the country of origin marking requirements for the reprocessed crab?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that, unless excepted, every article of foreign origin, or its container, must be legibly, permanently, and conspicuously marked to indicate the country of origin to an ultimate purchaser in the U.S. The primary purpose of the country of origin marking statute is to "mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302, C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134) implements the requirements and exceptions to 19 U.S.C. 1304. Under 19 CFR 134.1(d), the ultimate purchaser is defined as the last person in the U.S. who will receive the article in the form in which it was imported. If an imported article is further manufactured in the U.S. and the manufacturing process is merely a minor one which leaves the identity of the imported article intact, pursuant to 19 CFR 134.1(d)(2), the consumer or user of the article who obtains the article after the processing, will be regarded as the ultimate purchaser.

Foreign natural products such as animals, fish and birds in their natural state or not advanced in any manner further than is necessary for their safe transportation are on the so-called "J-list" and are excepted from individual marking requirements pursuant to 19 U.S.C. 1304(a)(3)(J) and 19 CFR 134.33. However, the outermost container in which the article ordinarily reaches the ultimate purchaser is required to be marked to indicate the origin of its contents. As provided in 19 CFR 134.25, if the imported J-list product will be repacked prior to sale to the ultimate purchaser, the importer must certify to Customs that he will properly mark the new package or alternatively, notify the repacker of the obligation to mark the new package. The certification procedures, which are for the purpose of ensuring that the ultimate
purchaser will be advised of the country of origin, apply to imported J-list articles processed and repacked after importation unless the articles are substantially transformed prior to repacking. Absent a substantial transformation, the consumer or other recipient of the crab product is considered the ultimate purchaser and must be advised of its country of origin through marking of the outermost container, and the importer must comply with the certification and notification requirements of 19 CFR 134.25.

Whether a substantial transformation has occurred depends upon a comparison of the article before the processing which is claimed to effect such transformation and the article after the processing. It is a well-settled principle of Customs law that in order for a substantial transformation to be found, an article having a new name, character or use must emerge from the processing. See United States v. Gibson-Thomsen Co. Inc., 27 C.C.P.A. 267, C.A.D. 98 (1940).

In Headquarters Ruling Letter (HRL) 732939 dated October 9, 1990, crab caught by U.S. flag vessels was processed aboard either the U.S. flag catching vessels or Soviet flag processing vessels by cleaning, cutting the legs from the body, boiling, blast freezing and packaging. After importation, the crab was sorted, graded, and repackaged in 20 pound cartons. In that case, we found that the cleaning, cutting, boiling, blast freezing and packing did not result in a change in the name, character or use of the crab. We pointed out that such processing of food was similar to the cutting, blanching, packaging and freezing of broccoli (HRL 729365 dated June 2, 1985, published as C.S.D. 86-26); and the cooking, peeling, deveining and freezing of shrimp (HRL 731763, May 17, 1989). Therefore, we held that such processing aboard the Soviet vessels did not result in a substantial transformation. (See also HRL 732337 dated August 16, 1989, where Customs ruled that the domestic processing of imported crab meat by thawing, sorting, blending with domestic crab meat, canning and pasteurization did not constitute a substantial transformation.)

In HRL 109504 dated August 12, 1988 (affirmed by HRL 109793 dated May 31, 1989), we considered the extent of processing crab necessary to yield a new and different product under the coastwise laws. In that case, after boiling, removal of the backs, freezing and glazing on a U.S. flag processing vessel, the crab were further processed on a Korean flag vessel by thawing and cleaning; removing the gurry and gills; grading the arms, legs and claws, and in some cases, by scoring the shells. In other cases, the shells were largely removed, and finally, in some cases the meat was
entirely removed from the shells. In HRL 109504/109793, we ruled that partially processed crab which was later fully processed aboard the Korean flag vessel did not become a new and different article of commerce to the extent the meat was not largely or wholly removed from the shell. Although decided under the coastwise laws rather than under the marking statute, the ruling's conclusion as to whether the foreign processing effected a substantial transformation is consistent with decisions involving the determination of a change in name, character and use under the marking laws.

Under the circumstances, it is our opinion that the processing in the U.S. of
Russian-origin crab in the manner described does not result in a substantial transformation, and that accordingly, the outermost containers in which the crab is repackaged after such processing must be marked with Russia as the county of origin. Further, the importer must also comply with the certification and notification procedures of 19 CFR 134.25. Since the crab caught in Alaskan waters is of U.S.-origin, this product is not subject to the marking requirements.

HOLDING:

The processing in the U.S. of imported Russian-origin crab by cleaning to remove marine growth, gills and gurry, glazing with ice, and sorting by size and color, does not constitute a substantial transformation. Accordingly, the repacked crab is subject to the country of origin marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134 and the importer must follow the certification procedures of 19 CFR 134.25. Since the crab caught in Alaskan waters is of U.S.-origin, it is not subject to country of origin marking requirements.

Please provide a copy of this decision to Mr. Darrell Cran, Quality Assurance Manager, Tyson Seafood Group, Pier 91, Bldg. 392, Box C-119, Seattle, Washington
98119.

Sincerely,

John Durant,

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