HQ 967925 - Country of Origin Marking for Rice Preparations - 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 > 2006 HQ Rulings > HQ 967888 - HQ 967987 > HQ 967925

Previous Ruling Next Ruling
HQ 967925

February 28, 2006

CLA-2: RR:CTF:TCM 967925 ASM

CATEGORY: MARKING

Carol J. Glaser
Commodity Services Manager
Riviana Foods Inc.
2777 Allen Parkway
16th Floor
Houston, Texas 77019

RE: Country of Origin Marking for Rice Preparations

Dear Ms. Glaser:

This is in response to your letter dated September 21, 2005, requesting a binding ruling regarding the country of origin marking requirements for two rice products intended for human consumption, which have been identified as the “Gourmet House Wild Rice” and the “Gourmet House Long Grain & Wild Rice Blend”. Photocopies of the packaging were submitted to Customs and Border Protection (CBP) for our review and consideration.

FACTS:

The subject products, hereinafter referred to as “Wild Rice” and “Long Grain/Wild Rice Blend”, contain wild rice of United States origin that will be supplied by Riviana’s facility in Minnesota and shipped to Spain in ocean containers. The water, oil, soy lecithin, salt, long grain rice, and packaging will be of Spanish origin. These products will be processed and assembled and exported to the United States by your sister company Herba Ricemills, S.L.U., located in Spain. The finished “Wild Rice” will consist of 97 % U.S. wild rice, 2 % water, 0.4 % sunflower oil, 0.2 % salt, and 0.4% soy lecithin. The finished “Long Grain/Wild Rice Blend” will consist of 89 % long grain rice of Spanish origin, 8 % U.S. wild rice, 2 % water, 0.4 % sunflower oil, 0.2 % salt, and 0.4 % soy lecithin. The subject products will be prepared in Spain as follows:

Imported U.S. Wild Rice brought into Herba’s inventory Cups are filled with rice, water, oil and salt Cup weight verified
Vacuum placed on cups and sealed
Cups loaded into retort cage
Cages loaded into retort
Product thermally processed in retort which takes approximately 68 minutes Cups cooled in retort
Cups taken out of cages and packaged

Each of the flavors will be packed in two plastic cups with a cardboard sleeve. For shipping, your company will pack eight cardboard sleeves per case with each case measuring 15.625 inches x 7.5 inches x 5.25 inches. The product will then be sent to one of your distribution centers in the U.S. for ultimate shipment to grocery stores where consumers can purchase the rice in the two-cup sleeve. The consumer peels back the film and places the cup in a microwave to allow for final cooking and consumption.

It is our understanding that both products will be packaged in the same manner. With respect to the outer packaging (cardboard sleeve), the right hand side of the top panel and one of the two side panels of the sleeve features an illustrated “serving suggestion” for the product. The top panel and one side panel also have the Gourmet House logo, a circular graphic stating that the food is “fully cooked”, and the words “Ready to Serve” in large type. Below the “Ready to Serve” print are the words “100% Minnesota Cultivated / Wild Rice / Whole Grain – Processed in Spain” or “100% Minnesota Cultivated / Long Grain & Wild Rice* Blend / Whole Grain – Processed in Spain”. The second side panel has the “Nutrition Facts” box, a box with preparation instructions, a box with serving suggestions, a statement of ingredients, and the words “© 2005 Riviana Foods Inc. P.O. Box 290 Clearbrook, MN 56634 U.S.A.” and below that, the words “Product of Spain”. The bottom panel contains the proof of purchase/U.P.C. mark and consumer information for quality assurance/refund purposes to an address in Houston, Texas.

ISSUE:

What are the country of origin marking requirements for the imported rice products sold as described above? Is the location of the marking, as described herein, in conformity with the Marking Regulations?

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 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. Congressional intent in enacting 19 U.S.C. 1304 was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose 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." See United States v. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).

Section 134.1(b) of the Customs and Border Protection (CBP) Regulations (19 CFR 134.1(b)), defines “country of origin” as the country of manufacture, production, or growth. In order to change the country of origin, further work or material added to the article in another country must effect a substantial transformation. A substantial transformation occurs when the further work or material added in another country results in an article having a different name, character, or use. United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A., 267 (CAD 98). In National Juice Products Association v. United States, 628 F. Supp. 978 (CIT 1986), the court considered whether foreign manufacturing concentrate processed into frozen concentrated orange juice in the U.S. and reconstituted orange juice was considered substantially transformed. The U.S. processing involved blending the manufacturing concentrate with other ingredients to create the end product; the manufacturing concentrate was mixed with purified and dechlorinated water, orange essences, orange oil, and in some cases, fresh juice. The foreign manufacturing concentrate was blended with domestic concentrate, with ratios of 50/50 or 30/70 (foreign/domestic). The court considered that the U.S. processing added relatively minor value to the product and that the manufacturing concentrate imparted the essential character to the juice and made it orange juice. The court concluded that the foreign manufacturing juice concentrate was not substantially transformed in the U.S. when it was processed into retail orange juice products. Thus, since the product contained concentrate from more than one foreign country, the packaging had to list all such countries.

With respect to both products, the U.S. origin rice is combined with water, oil, salt, soy lecithin, and in the case of the “Long Grain/Wild Rice Blend” with Spanish origin long grain rice. The ingredients are placed into cups and thermally processed. See Headquarters Ruling Letter (HQ) 561494, dated August 24, 2000; and HQ 731763, dated May 17, 1989, where it was determined that thermal processing or cooking did not change the use of the product. See also C.S.D. 86-28, HQ 729365, dated June 25, 1986, where CBP ruled that fresh broccoli processed in the U.S. by cutting to length, quartering or spearing, steam blanching for six minutes, freezing solid and packaging was not substantially transformed. CBP noted that while the shelf life of the broccoli was prolonged, its fundamental character and use did not change.

In this instance, the wild rice ingredient of U.S. origin has not undergone a substantial transformation. The operations performed in Spain do not result in a product with a different name, character, or use. The essential character of the “Wild Rice” product is retained. In fact, this product is comprised of 97 % wild rice from the U. S. Therefore, for marking purposes, the country of origin of the imported “Wild Rice” product is the United States. As such, products of the United States are not subject to the country of origin marking requirements of 19 U.S.C. 1304.

The “Long Grain/Wild Rice Blend” product has a blend of 89 percent long grain rice, which has been produced in Spain and mixed with 8 percent wild rice of U.S. origin. However, we have already determined that the additional processing in Spain has not substantially transformed the wild rice, which is still readily discernable in the finished product. Furthermore, the finished “Long Grain/Wild Rice Blend” product, which is imported into the United States, is still identifiable and marketed as a rice product. Thus, a substantial transformation has not occurred in Spain for this product.

This determination is supported by HQ 735085, dated June 4, 1993, which involved the country of origin marking of a frozen mixed vegetable product consisting of cut and frozen broccoli and cauliflower produced in Mexico, raw water chestnuts and peas imported from China (cleaned, cut, and peeled and frozen in the U.S.), and carrots, yellow peppers, and asparagus grown in the U.S. (sized, cleaned, peeled or trimmed, cut and frozen at U.S. plants). These foreign and domestic bulk vegetables were combined in the U.S. with unspecified non-vegetable ingredients from an unknown source and packaged in 16 oz. polyurethane bags for retail sale as part of the “American Mixtures” line. Beyond bagging, there was no processing of the combined frozen vegetables such as cooking or adding sauces. In this ruling, CBP found that mixing foreign-grown produce in the U.S. with domestically grown produce did not effect a substantial transformation. Thus, it was held that “ . . . the processing of the imported broccoli and cauliflower to make ‘American Mixtures’ recipes does not relieve Green Giant of the obligation under section 304 of the Tariff Act to indicate to the ultimate purchaser in the U.S. that the mixtures contain produce of foreign origin”.

It is also important to note that CBP has consistently held that blending a product from one country with the same product of another country does not constitute a substantial transformation. In HQ 560944, dated April 27, 1998, CBP determined that the blending of Spanish olive oil with Italian olive oil in Italy does not result in a substantial transformation of the Spanish product. See also HQ 732260, dated June 20, 1989, where whiskey imported from Scotland and Ireland and blended in the U.S., did not result in a substantial transformation and the marking had to reflect the country of origin of each of the constituent whiskeys.

Part 134, CBP Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.46, CBP Regulations (19 CFR 134.46), contains more restrictive marking requirements designed to alleviate the possibility of misleading an ultimate purchaser with regard to the country of origin of an imported article. Specifically, 19 CFR 134.46 requires that, in instances where the name of any city or locality in the U.S., or the name of any foreign country or locality other than the name of the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning. CBP has ruled that in order to satisfy the close proximity requirement, the country of origin marking must appear on the same side(s) or surface(s) in which the name of the locality other than the country of origin appears. See HQ 559886, dated August 16, 1996.

The “Long Grain/Wild Rice Blend” product packaging has been printed with the words “processed in Spain”, which are not words of similar meaning to the words “made in” or “product of” and may not be used to indicate the country of origin for this product. The term “processed in Spain” fails to clearly convey the country of origin to the ultimate purchaser. Moreover, the country of origin declaration must appear wherever a United States geographic location is indicated. As described herein, the submitted artwork notes two different U.S. addresses in two locations, i.e., the rear panel and the bottom panel. While we note that the rear panel correctly identifies the blend to be a “product of Spain”, the same phrase must also appear on the bottom panel in close proximity to “Houston, TX”. Furthermore, we note that the outer sleeve of the “Long Grain/Wild Rice Blend” packaging has been printed with the words “Whole Grains Processed in Spain” in much smaller print than the words “100 % Minnesota Cultivated”. In accordance with 19 CFR 134.46, letters which convey the name of any foreign country or locality other than the name or locality in which the article was manufactured or produced, must be comparable in size.

Inasmuch as the “Long Grain/Wild Rice” product has not been substantially transformed in Spain, we find that in accordance with the aforementioned case of National Juice Products Association v. United States, 628 F. Supp. 978 (CIT 1986), the package must list the foreign country of origin, i.e., “Spain”. Goods of U.S. origin are excepted from the country of origin marking requirements of 19 U.S.C. 1304 pursuant to 19 CFR 134.32(m). Thus, it would be acceptable for the packaging to be marked to indicate only that the article is a “product of Spain”. However, if you also wish to identify the U.S. origin of the wild rice, CBP would have no objection to a marking such as “Product of the U.S.A. and Spain”. In this regard, it should be noted that the marking of articles in whole or in part as “Made in the U.S.” is a matter within the jurisdiction of the Federal Trade Commission (FTC) and we suggest that you contact that agency for a determination.

HOLDING:

The “Wild Rice” product is a good of the United States for marking purposes and is not subject to the country of origin marking requirements.

The “Long Grain and Wild Rice Blend” as processed in the manner described above, will not result in a substantial transformation. Accordingly, the retail consumer is deemed to be the ultimate purchaser of the imported article pursuant to 19 U.S.C. 1304, and the retail container of the product must be marked to indicate its Spanish content. The CBP has no objection to the marking also identifying the U.S. content, but that is a matter within the jurisdiction of the FTC. Furthermore, the phrase "processed in Spain” is not acceptable as an indication of the country of origin. The words “made in Spain”, “product of Spain” or words of similar meaning must be placed wherever a U.S. address or country of origin is indicated and must also appear in close proximity (same side or surface) and comparable size to any other printed name identifying a locality.

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

Sincerely,

Previous Ruling Next Ruling