HQ 560904

June 22, 1998

MAR-05 RR:CR:SM 560904 KKV

CATEGORY: Marking

Mr. Gregory P. Benhard

Louisiana Premium Seafoods, Inc.

P.O. Box 68

Palmetto, LA 71358-0068

RE: Request for binding ruling regarding the country

of origin marking requirements applicable to whole

crawfish imported for further processing in the

U.S.; re-cooking; heading; peeling; de-veining;

not a substantial transformation; National Juice

Products; Koru North America; C.S.D. 88-10; HRL

731763

Dear Mr. Benhard:

This is in response to your letter dated February 16,

1998, which requests a binding ruling regarding the country

of origin marking requirements applicable to whole crawfish

imported from China for further processing in the U.S.

Specifically, you inquire whether imported crawfish is

substantially transformed in the U.S. as a result of post-importation
processing and whether the finished product may

be marked, \"Product of USA.\"

FACTS:

You indicate that Louisiana Premium Seafoods, Inc.

imports whole, cooked crawfish from China into the U.S. On

those occasions where your firm experiences a surplus of the

product, it is further processed in the U.S. by recooking,

removing the head, peeling and de-veining. We are informed

that the domestic processing results in a substantially

increase in the cost of the finished product (i.e., the

processed tail meat is 15% of the original weight and the

cost of the end product is more than twice the cost of the

imported whole, cooked product).

ISSUE:

Whether imported whole, cooked crawfish is

substantially transformed into a product of the U.S. for

purposes of 19 U.S.C. 1304 by domestic processing which

includes recooking, heading, shelling and de-veining

operations.

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 United States 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 United States the English name of the

country of origin of the article. By enacting 19 U.S.C.

1304, Congress intended to ensure that the ultimate

purchaser would be able to know by inspecting the marking on

the imported goods the country of which the goods are 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. United States v. Friedlaender & Co., 27 C.C.P.A. 297,

302 C.A.D. 104 (1940).

Section 134.1(b), Customs Regulations (19 CFR

134.1(b)), defines \"country of origin\" as:

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\" within the meaning of this part;

however for a good of a NAFTA country,

the NAFTA Marking Rules will determine

the country of origin.

Accordingly, the country of origin of an article is the

country in which it was wholly manufactured or, if processed

in several countries, the country in which the article last

underwent a substantial transformation. The

well-established test for determining whether a substantial

transformation has occurred is derived from language

enunciated by the court in Anheuser-Busch Brewing

Association v. United States, 207 U.S. 556, 562 (1908),

which defined the term \"manufacture\" as follows:

Manufacture implies a change, but every

change is not manufacture and yet

every change in an article is the result

of treatment, labor and manipulation.

But something more is necessary, as set

forth and illustrated in Hartranft v.

Wiegmann, 121 U.S. 609. There must be

transformation; a new and

different

article

must

emerge,

having a

distinctive name,

character

or use.

Simply stated, a substantial transformation occurs

\"when an article emerges from a process with a new name,

character, or use different from that possessed by the

article prior to processing.\" See Texas Instruments, Inc.

v\. United States, 69 CCPA 152, 681

F.2d 778 (1982) (cited with approval in Torrington Co. v.

United States, 764 F. 2d 1563, 1568 (1985)).

Although neither the courts nor Customs has

specifically ruled on the country of origin marking

requirements of imported crawfish tail meat which has

undergone multi-country processing, two court decisions

involving the country of origin marking requirements

applicable to imported food products (one on orange juice

and another on fish) and two Customs decisions regarding

imported shrimp are instructive.

In National Juice Products v. United States, 628 F.

Supp. 978, 10 CIT 48 (CIT 1986), the Court of International

Trade considered the effects of domestic processing upon

frozen orange juice concentrate imported into the U.S. The

court upheld Customs determination in C.S.D. 85-47 (also

published as HQ 728557, dated September 4, 1985), that the

imported orange juice concentrate is not substantially

transformed when it is mixed with other batches of

concentrate, either foreign or domestic, water, orange

essences, orange oil and in some cases, fresh juice and

either packaged in cans and frozen or pasteurized, chilled

and packed in liquid form. Customs found, and the court

agreed, that the domestic processing did not produce an

article with a new name, character or use because the

essential character of the final product was imparted by the

imported concentrate and not the domestic processing. The

court stated that \"the retail product in this case is

essentially the juice concentrate derived in substantial

part from foreign grown, harvested and processed oranges.

The addition of water, orange essences and oils to the

concentrate, while making it suitable for retail sale does

not change the fundamental character of the product, it is

still essentially the product of the juice of oranges.\"

Therefore, the repacked orange juice products had to be

marked with the country of origin of the imported

concentrate.

In Koru North America v. United States, 12 CIT 1120,

701 F. Supp. 229 (1988), the court considered whether the

processing of headed and gutted fish in South Korea by

thawing, skinning, boning, trimming, freezing and packaging,

changed the name, character or use of the fish so as to

effect a substantial transformation and render Korea the

country of origin for purposes of 19 U.S.C. 1304. The court

concluded that the processing performed in Korea constituted

a substantial transformation because it changed the name of

the article from \"headed and gutted fish\" to \"individually

quick-frozen fillets\" and more importantly, because it

vastly changed the fish\'s character. In this regard, the

court noted that while the fish arrive in Korea with the

look of a whole fish, when they leave they no longer possess

the essential shape of the fish. The court also noted that

the fillets are considered discrete commercial goods which

are sold in separate areas and markets. The fact that the

products also have different tariff classifications was

found to be additional evidence of a substantial

transformation.

In C.S.D. 88-10 (also published as HQ 731472, dated

June 23, 1988) Customs considered the effect of domestic

processing on foreign-origin shrimp. In that case, green

(raw), headed (without heads), frozen shrimp, with shell on,

was imported into the U.S. where it was thawed, sorted,

iced, peeled, de-veined, iced and packaged. Customs

determined that the processing did not result in a material

change of name (i.e., from \"frozen shrimp\" to \"peeled and

de-veined\" frozen shrimp). Likewise, Customs determined

that the processing did not result in a change in the

character of the imported product, stating:

The quality and size of the product is

attributable to the imported product and

not the domestic processing. While the

peeling and de-veining changes the

physical appearance of the shrimp to a

certain degree and renders the product

ready for eating, in our opinion the

change is minor and does not

fundamentally change the character of the

imported product. We believe that in

this case the imported shrimp similarly

imparts the essential character to the

final product.

Finally, Customs determined that the domestic processing did

not significantly change the product\'s intended use, which

was primarily dictated by the nature (raw) and size of the

imported article, as these attributes had already been

determined at the time of importation. Accordingly, based

on the rationale of National Juice Products, supra, Customs

held that the peeling and de-veining of shrimp in the U.S.,

which did not change the name, character or use of the

imported product, did not constitute a substantial

transformation.

The same rationale was applied in HRL 731763, dated May

17, 1989, where Customs considered raw, frozen shrimp

imported into the U.S. in three different forms: 1) shell-on

shrimp (commercially known as \"green headless shrimp\"); 2)

peeled, unde-veined shrimp (\"PUD shrimp\"); and 3) peeled and

de-veined shrimp (\"P&D shrimp).\" After importation, the

shrimp was thawed, washed, graded, cooked and, in some

cases, also peeled and de-veined. Customs referenced its

previous holding in HRL 731472, supra, and considered

whether the additional cooking operations were sufficient to

effect a substantial transformation of the imported

merchandise. Customs determined that the imported

merchandise did not undergo a change in name as a result of

processing, as the article was referred to as \"shrimp\" both

before and after the cooking operations. While noting that

the cooking process produced some changes in the color,

texture and chemical composition, Customs determined that

the character of the shrimp ( i.e, size and quality) was

unaffected by domestic cooking operations. Lastly, Customs

concluded that the use of the product was unchanged as a

result of the cooking process, as this process, like the

peeling and de-veining in C.S.D. 88-10, supra, is

essentially a simple process which may be performed in the

kitchen of a consumer, and which all shrimp must undergo

before consumption.

In the matter under consideration, whole, cooked,

frozen crawfish, with shell on, classifiable under

subheading 0306.19.0010, HTSUS, is imported into the U.S.

from China, and undergoes post-importation processing which

includes re-cooking, heading, peeling and deveining

operations. For processing to effect a substantial

transformation, a new and different article must emerge,

with a new name, character, or use different from that

possessed by the article prior to processing.\" See Texas

Instruments, supra.

Unlike Koru, supra, where the processing of fish

resulted in a change in the name of the article, from

\"headed and gutted fish\" to \"individually quick-frozen

fillets,\" the crawfish undergo no such distinctive change of

name as a result of the domestic processing. The article

imported into the U.S. and the finished article are

essentially the same thing - cooked crawfish. Despite the

fact that the product imported into the U.S. is \"whole\"

crawfish whereas the processed product is crawfish \"tails,\"

the fundamental identity of the crawfish is maintained

throughout, and is not lost or subordinated in the processed

product. As with the shrimp in HRL 731763, supra, the fact

that the products may have different modifiers is not

determinative. See also C.S.D. 86-26 (\"fresh\" broccoli

processed into \"frozen\" broccoli or \"chopped\" broccoli did

not constitute a substantial transformation).

Likewise, the domestic processing does not change the

fundamental character of the imported crawfish. Like the

shrimp in C.S.D. 88-10 and HRL 731763, supra, the character

of the crawfish (i.e., quality) has already been determined

at the time of importation into the U.S. Although the

domestic processing changes the appearance of the crawfish

to a certain degree, it does not impact the fundamental

nature of the article. Like the imported orange juice

concentrate in National Juice, supra, the crawfish imported

into the U.S. imparts the essential character to the

finished product.

Lastly, the use of the product is not changed as a

result of the domestic processing operations. Re-cooking,

heading, peeling and de-veining are simple operations which

render the product ready for eating. While the added

convenience of having these processes completed may be a

factor considered by a purchaser, these processes may easily

be performed by consumers in their own kitchens.

Based on the above considerations, we conclude that the

process of re-cooking, heading, peeling and de-veining is

not a substantial transformation but rather, a minor one

which leaves the identity of the imported crawfish intact.

Therefore, for purposes of 19 U.S.C. 1304, imported crawfish

is not substantially transformed into a product of the U.S.

by post-importation processing but remains a product of

China. Accordingly, upon importation into the U.S., the

certification procedures of 19 CFR 134.25 must be satisfied

and upon completion of domestic processing, the finished

article must be marked with its country of origin.

HOLDING:

Based upon the information provided, frozen, cooked

crawfish from China, imported into the United States for

domestic processing operations consisting of re-cooking,

heading, peeling and de-veining, is not substantially

transformed into a product of the U.S. but remains a product

of China. Accordingly, upon importation into the U.S., the

certification procedures of 19 CFR 134.25 must be satisfied

and, upon completion of domestic processing, the finished

product must be marked with its country of origin.

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 Customs officer

handling the transaction.

Sincerely,

John Durant

Director

Commercial Rulings Division