NY 896132 - COUNTRY OF ORIGIN MARKING OF IMPORTED RAW COFFEE - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1997 NY Rulings > NY 896109 - NY 896287 > NY 896132

Previous Ruling Next Ruling
NY 896132

March 31, 1994

MAR-2-09:S:N:N7:232 896132

CATEGORY: MARKING

Mr. George E. Boecklin
National Coffee Association of U.S.A., Inc. 110 Wall Street
New York, NY 10005

RE: COUNTRY OF ORIGIN MARKING OF IMPORTED RAW COFFEE

Dear Mr. Boecklin:

This is in response to your letter dated March 9, 1994 requesting a ruling on the country of origin marking requirements of an imported article, for which you did not indicate a specific country of origin, that is later to be further processed in the U.S. into a finished article. A marked sample was not submitted with your letter for review.

The subject merchandise is raw coffee which will be imported into the United States, where it will be roasted and placed in consumer packages in either whole bean or ground form. Our response will first address the situation where the raw coffee is produced in a NAFTA country, e.g., Mexico, and then the situation where the raw coffee is produced in a non-NAFTA country, e.g., Columbia.

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 to 19 U.S.C. 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the interim amendments to the Customs Regulations published as T.D. 94-4 (59 Fed. Reg. 109, January 3, 1994) with corrections (59 Fed. Reg. 5082, February 3, 1994) and T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993). These interim amendments took effect on January 1, 1994 to coincide with the effective date of the NAFTA. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in T.D. 94-4 (adding a new Part 102, Customs Regulations). The marking requirements of these goods are set forth in T.D. 94-1 (interim amendments to various provisions of Part 134, Customs Regulations).

Section 134.1(b) of the interim regulations, defines "country of origin" as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j) of the interim regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the interim regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the interim regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

In order to determine the country of origin marking requirements we must first apply the NAFTA Marking Rules in order to determine whether the imported raw coffee "is a good of a NAFTA country", prior to being further processed in the U.S.

Part 102 of the interim regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the interim regulations, sets forth the required hierarchy for determining country of origin for marking purposes.

Applying the NAFTA rules of origin set forth in Part 102 of the interim regulations to the facts of this case, we find that, for marking purposes, the imported raw coffee is a good of a NAFTA country prior to being further processed in the U.S. As an agricultural product grown in Mexico, the raw coffee satisfies the requirement of Section 102.11 (a) (1). The only issue which remains is whether the U.S. processor is the ultimate purchaser within the meaning of section 134.35(b). Section 134.35(b) of the interim regulations, provides that
a good of a NAFTA country which is to be processed in the United States in a manner that would result in the good becoming a good of the United States under the NAFTA marking rules is excepted from marking. Unless the good is processed by the importer or on its behalf, the outermost container of the good shall be marked in accord with this part.

Based on the facts of this case, we find that the imported raw coffee as a result of the further processing performed in the U.S. becomes an article of U.S. origin under Part 102 of the interim regulations. The raw coffee which has been roasted in the United States satisfies the change in tariff classification set out in Section 102.20.

Accordingly, the imported raw coffee, which is a good of a NAFTA country that becomes a U.S. article as a result of being further processed in the U.S., in the manner described above, is excepted from marking and only the outermost container is required to be marked with the country of origin "Mexico" if the imported raw coffee is not processed by the importer or on its behalf.

The country of origin marking requirements for raw coffee which is a product of a non-NAFTA country, e.g., Columbia is determined by Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), and not in accordance with Annex 311 of the North American Free Trade Agreement (NAFTA).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 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. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See, 19 CFR 134.35.

In this case, the imported raw coffee which is roasted is substantially transformed as a result of the U.S. processing, and therefore the U.S. processor is the ultimate purchaser of the imported raw coffee and under 19 CFR 134.35 only the containers which reach the ultimate purchaser are required to be marked with the country of origin "Columbia" if the imported raw coffee is not processed by the importer or on its behalf.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Jean F. Maguire
Area Director

Previous Ruling Next Ruling