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HQ 561039





September 1, 1998

MAR-2-05 RR:TC:SM 561039 KSG

CATEGORY: MARKING

Malek Jalabi
The Noble Tree Corporation
8715 Belle Rive Blvd.
Suite 3803
Jacksonville, Florida 32256

RE: dates; substantial transformation; date bars

Dear Mr. Jalabi:

This is in response to your letters dated June 9, 1998, and July 28, 1998, concerning the country of origin marking of date bars.

FACTS:

You state that your company exports U.S. grown almonds and pecans to Saudi Arabia where they are stuffed into Saudi-grown dates. The dates are then imported into the U.S. where the products are pressed into bar form, preserved, wrapped in cellophane paper and packaged in small boxes. Other products such as shredded coconut or sesame seeds may be added to the product in the U.S.

In a letter dated July 22, 1998, we requested more detailed information in order to respond to your request. In your response , you stated that the final products are a plain date bar, a date bar with pecans, a date bar with almonds, a date bar with almonds and coconut, a date bar with almonds and sesame seeds, a date bar with pecans and coconuts, and a date bar with pecans and sesame seeds. You state that natural dates of Saudi origin are the main ingredient. In Saudi Arabia, the dates are pitted, or pitted and stuffed with almonds or pecans. Shredded coconut or sesame seeds may be applied to the surface of some bars in the U.S. The country of origin of the coconut and sesame seeds was not provided. You use manual or electric machines to press the product into a bar form.

You have asked whether the bars may be marked in any of the following ways: (1) Product of the USA/ contains dates grown in Saudi Arabia or California, (2) Product of USA/ SAUDI ARABIA, (3) Product of: Dates/ Saudi Arabia, Almonds or Pecans/ USA, or (4) Product of Saudi Arabia, Processed and Packaged in the USA by the Noble Tree Corporation.

ISSUE:

What is an acceptable country of origin marking for date bars made as described above?

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 (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 of 19 U.S.C. 1304. Pursuant to 19 CFR 134.1(b), "country of origin" means 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. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character and use. U.S. v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940).

Customs ruled in Headquarters Ruling Letter ("HRL") 084928, dated September 19, 1989, that dates which are grown and pitted in Pakistan and then macerated, chopped and coated in Canada are not substantially transformed in Canada. Customs stated that "the sugar coating and chopping do not change the character or use of the dates. They are essentially the same dates and are recognizable as such, having the same character and use as the dates exported from Pakistan."

In National Juice Products Association v. United States, 628 F. Supp. 978 (CIT 1986), the Court of International Trade upheld Custom's determination that imported orange juice concentrate is not substantially transformed when it is processed in the U.S. into retail orange juice products. The court noted that the additional processing "does not change the fundamental character of the product, it is still essentially the product of the juice of oranges." Since the court found that the essential character of the final product was imparted by the basic ingredient, the orange concentrate, there was no substantial transformation.

In HRL 733908, dated April 11, 1991, Customs held that breakfast cereal processed in the U.S. including sugar coating, vitamin fortification, packaging and other miscellaneous processing, was not substantially transformed in the U.S. Customs found that the product had its fundamental character at the time it entered the U.S. In HRL 555684, dated January 18, 1991, Customs determined that raw cheese from Argentina was not substantially transformed when it was processed into grated cheese in Panama. Customs cited to National Juice in its analysis and concluded that the raw cheese imparted the essential character of the final product.

The instant case involves imported dates that undergo additional processing in the U.S. (pressing into bar form and packaging) which in our view does not change the essential character of the finished product. The imported dates clearly are the basic ingredient of the date bars. Therefore, we conclude that the date bars have the same character and use as the imported dates. We find that the imported dates are not substantially transformed in the U.S. The country of origin of the date bars is Saudi Arabia.

Pursuant to 19 U.S.C. 1304, the bars cannot be marked to indicate or infer U.S. origin and the bars must be marked to clearly indicate that the country of origin of the date bars is Saudi Arabia. Therefore, any markings using the term "Product of USA" would not be acceptable. Further, it is not acceptable to mark the bar in a manner that does not indicate that the country of origin of the bar is Saudi Arabia. However, the fourth proposed marking, "Product of Saudi Arabia, Processed and Packaged in the USA," is acceptable.

HOLDING:

The country of origin of the date bars is Saudi Arabia. The proposed marking "Product of Saudi Arabia, Processed and Packaged in the USA" would satisfy the requirements of 19 U.S.C. 1304.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise was 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,

John Durant
Director,
Commercial Rulings Division

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