HQ 735084

August 17, 1993

MAR-2-05 CO:R:C:V 735084 ER

CATEGORY: MARKING

Mr. Joe Hamby

Chief Financial Officer

Tri-Marine International

150 W. Seventh Street

Suite 205

San Pedro, California 90731

RE: Country of Origin Marking Requirements for Frozen Swordfish

Fillets; Substantial Transformation; Koru North America v.

United States, 701 F.Supp. 229, 12 CIT 1120 (CIT 1988).

Dear Mr. Hamby:

This is in response to your letter dated April 1, 1993, in

which you request a ruling regarding the country of origin

marking requirements for certain frozen swordfish fillets.

FACTS:

According to your letter and subsequent telephone

conversation with this office on July 28, 1993, the swordfish is

caught by Taiwanese longliner fishing vessels in the Indian

Ocean. The heads, tails and viscera are removed on board the

fishing vessel and the fish is frozen. In this condition the

fish is known as \"dressed without tail\" (\"DWT\"). The DWT is

discharged from the fishing vessel at Singapore where it is

subjected to further processing to become \"individually quick-

frozen\" fillets.

The processing performed in Singapore consists of cutting

the fish in half, taking out the bones and trimming off the dark

meat and edges of the fish. After cutting and trimming, the

fillet is coated with a water glaze to protect it from

dehydrating in its frozen state. Each fillet is individually

bagged and the bag marked with the name of the product, its

weight and origin. You informed us that unlike certain other

types of fish, leaving some skin on the swordfish fillets is

desirable to the consumer.

ISSUE:

Whether swordfish captured by a Taiwanese fishing vessel,

dressed without tails and frozen on board the vessel, is later

substantially transformed by the processing performed in

Singapore to make it into individually quick-frozen fillets?

LAW AND ANALYSIS:

The marking statute, 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.

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

CCPA 297, 302, C.A.D. 104 (1940).

The \"ultimate purchaser\" is defined generally as 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). If an article is to be

sold at retail in its imported form, the purchaser at retail is

the \"ultimate purchaser.\" 19 CFR 134.1(d)(3).

The country of origin for marking purposes is defined at

section 134.1(b), Customs Regulations (19 CFR 134.1(b)), 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 the meaning of Part 134. A substantial

transformation occurs when articles lose their identity and

become new articles having a new name, character, or use. Koru

North America v. United States, 12 CIT 1120, 701 F.Supp. 229 (CIT

1988).

On the high seas, the country of origin of fish is

determined by the flag of the catching vessel. Koru at 1122.

However, if the fish is later substantially transformed in

another country then such other country will be the country of

origin of the fish, within the meaning of the marking statute.

Koru at 1125. In Koru, fish beheaded, de-tailed, eviscerated and

frozen on board the capturing vessel was later substantially

transformed into a product of Korea by the processing necessary

to make it into individually quick frozen fillets.

In Korea, the fish was \"thawed, skinned, boned, trimmed,

glazed, refrozen and packaged for exportation to the United

States.\" In finding a substantial transformation, the court

noted that when the fish arrived in Korea, it had the look of

whole fish, \"albeit without heads, tails or viscera\" whereas the

fish exported from Korea no longer possessed \"the essential shape

of the fish\" having been \"trimmed of jagged edges, fat lines and

impurities, glazed to preserve \[its\] moisture \... frozen \... and

finally, packaged\". Also significant was the fact that the

fillets were considered discrete commercial goods and were sold

in separate areas and markets. The court found that such changes

went to the fundamental nature and character of the fish

transforming the fish and creating a new article of commerce.

Although not determinative, the change in tariff classification

was considered by the court to be additional evidence of a

substantial transformation. Koru at 1121 and 1127.

In the instant case, the processing performed on board and

in Singapore is identical to that described in the Koru decision

with the one exception of the skin, which is left on the

swordfish fillets because of consumer preference. In view of the

similarity between the instant facts and those in the Koru

decision, Customs finds that the operations performed in

Singapore substantially transform the swordfish into a product of

Singapore. Accordingly, the fillets must be properly marked as

products of Singapore.

HOLDING:

Swordfish captured by Taiwanese vessels and processed into

individually quick-frozen fillets in Singapore is substantially

transformed. Accordingly, the fillets are a product of Singapore

and should be properly marked as such.

Sincerely,

John Durant, Director