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NY G86203




January 16, 2001

MAR-2 RR:NC:2:228 G86203

CATEGORY: MARKING

Mr. Karl F. Krueger
Danzas AEI Customs Brokerage Services
29200 Northwestern Highway
Southfield, MI 48034

RE: COUNTRY OF ORIGIN MARKING OF IMPORTED CANNED MUSHROOMS

Dear Mr. Krueger:

This is in response to your letter dated January 3, 2001, on behalf of Kanan Foods, Inc., Oak Brook Terrace, IL, requesting a ruling on whether imported canned mushrooms are required to be marked with the country of origin if they are later to be processed in the U.S. by a U.S. manufacturer. A sample was not submitted with your letter for review.

Kanan Foods, Inc., imports canned mushrooms from India for use by their customer, Lipton Foods, Englewood Cliffs, NJ. The canned mushrooms are imported on skids, shrink wrapped in plastic, unlabeled, and not marked with the country of origin. Lipton will use the canned mushrooms as ingredients in soups, gravies, and similar food products. The manufacturing process utilized by Lipton involves opening the cans by machine and adding the mushrooms to other ingredients. Paper labels on the cans could tear or be dislodged during this procedure, and would be a potential source of product contamination. For this reason, they require the canned mushrooms to be supplied without labels.

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 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 mushrooms are substantially transformed as a result of the U.S. processing, and the U.S. manufacturer, Lipton, is the ultimate purchaser. Under 19 CFR 134.35 the containers which reach the ultimate purchaser - the cans - are required to be marked with the country of origin, “India.”

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

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Stanley Hopard at 212-637-7065.

Sincerely,

Robert B. Swierupski
Director,

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