FOR FURTHER INFORMATION CONTACT: Burton Schlissel, Special Classification and Marketing Branch (202) 482-6945. SUPPLEMENTARY INFORMATION: BACKGROUND On March 22, 1995, Customs published a notice in the CUSTOMS BULLETIN, Volume 29, Number 12, proposing to modify Headquarters Ruling Letter (HRL) 555046 dated August 5, 1988. HRL 555046 holds that "the reprogramming of a copier's memory board and EPROM and the addition of a feeder, stacker, and enhanced control panel" exceeds an alteration under 806.20, Tariff Schedules of the United States (TSUS), predecessor of subheading 9802.00.50, HTSUS. The notice included proposed HRL, 558859, prepared in response to Request for Internal Advice 52/94, from the Acting District Director, Laredo, Texas, which also pertains to the eligibility under subheading 9802.00.50, HTSUS, of copiers that were modified by the reprogramming of the EPROMS. In determining Customs final action in this matter, consideration was given to the one comment submitted and to input received from a Customs field office. NEW POSITION Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), this notice advises interested parties that Customs is revoking HRL 555046 since the ruling holds that. the reprogramming of the memory board and EPROM and the addition of a feeder, stacker and enhanced control panel, exceed an alteration under the predecessor of subheading 9802.00.50, HTSUS. It is Customs position that these operations, i.e., the reprogramming of a copier's memory board and EPROM and the addition of a feeder, stacker and enhanced control panel, qualify as an alteration under subheading 9802.00.50, HTSUS. The facts set forth in HRL 555046, however, indicate that operations in addition to those described above and specified in the ruling's holding were performed on the exported copiers. Without additional information clarifying the extent of the other work performed, Customs is unable to rule as to whether the copiers which are the subject of that ruling are eligible for the partial duty exemption under subheading 9802.00.50, HTSUS. In this regard, we note that the complete disassembly of an exported article which results in its loss of identify or in the creation of a new or different article renders that article, upon return, ineligible for the partial duty exemption under subheading 9802.00.50, HTSUS. See Press Wireless, Inc. v. United States, 6 Cust. Ct. 102 (1941). Because of the need to consider additional factors pertaining only to the request for Internal Advice 52/94 (HRL 558859), Customs also had decided to delay issuance of a ruling in that case until a later date. HRL 555046, however, is hereby revoked in accordance with the position expressed in this General Notice. HRL 555046 is revoked rather than modified since, without additional information, we cannot determine whether or not the imported copiers covered by the ruling are eligible for the partial duty exemption under subheading 9802.00.50, HTSUS. Thus, HRL 555046 should not be relied upon as establishing that the copiers described therein either qualify or do not quality for the partial duty exemption. Dated: May 5, 1995. SANDRA L. GETHERS, (for John Durant, Director, Commercial Rulings Division.) PROPOSED RULING REGARDING COUNTRY OF ORIGIN MARKING REQUIREMENTS FOR SINGLE SPICE PRODUCTS AGENCY: U.S. Customs Service, Department of the Treasury. ACTION: Notice of proposed ruling regarding country of origin marking requirements for products made from a single foreign spice ingredient. SUMMARY: Pursuant to section 625(c)(2), Tariff Act of 1930 (19 U.S.C. 1625(c)(2)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), this notice advises interested parties that Customs intends to issue a ruling which specifies country of origin marking requirements pertaining to single spice products. Comments are invited on the correctness of the proposed ruling. DATE: Comments must be received on or before June 23, 1995. ADDRESS: Written comments (preferably in triplicate) are to be addressed to U.S. Customs Service, Office of Regulations and Rulings, Attention: Commercial Rulings Division, 1301 Constitution Avenue, N.W., Franklin Court, Washington, DC 20229. Comments submitted may be inspected at the Commercial Rulings Division, Office of Regulations and Rulings, located at Franklin Court, 1099 14th Street, N.W., Suite 4000, Washington, DC. FOR FURTHER INFORMATION CONTACT: David Cohen, Special Classification and Marking Branch, (202) 482-7076. SUPPLEMENTARY INFORMATION: BACKGROUND Pursuant to section 625(c)(2), Tariff Act of 1930 (19 U.S.C. 1625(c)(2)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), this notice advises interested par ties that Customs intends to issue a ruling which will have the effect of modifying treatment previously accorded by Customs with respect to the country of origin marking of repackaged single spice products. The proposed ruling letter is set forth in Attachment A to this document. Customs proposes to rule that imported single-spice products (e.g. cloves, pepper) are not substantially transformed as a result of cleaning, grinding, and retail packaging operations in the United States. Therefore, the consumer who obtains the packaged spices after the above domestic processing will be the ultimate purchaser of the imported spices under Title 19, United States Code, Section 1304. Accordingly, the country of origin of the spices will be the country where the imported spices were grown and the retail container in which the ground spices is sold must be marked in accordance with section 1304 and Part 134, Customs Regulations (1 9 CFR Part 134). Section 134.25, Customs Regulations (19 CFR 134.25), provides in pertinent part that: If an article subject to these requirements is intended to be repacked in new containers for sale to an ultimate purchaser after its release from Customs custody, or if the district director having custody of the article, has reason to believe such article will be repacked after its release, the importer shall certify to the district director that: (1) If the importer does the repacking, the new container shall be marked to indicate the country of origin of the article in accordance with the requirements of this part; or (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacked, the importer shall notify such purchaser or transferee, in writing, at the time of the sale or transfer, that any repacking of the article must conform to these requirements. Historically, Customs has not enforced the section 134.25 repackaging requirements consistently with respect to imported single-spice products. Some districts reportedly have demanded the repackaging certification for bulk importations of single spice products that will be further processed only by cleaning, grinding, and repackaging in the United States, while other districts reportedly have allowed the imports without repackaging certifications for these bulk products. Since the proposed ruling concludes that the operations described above do not substantially transform the foreign spices into products of the United States and that the ultimate purchaser of the foreign spices is the retail purchaser or consumer, the effect of this ruling will modify Customs past treatment of substantially identical products. Therefore, before taking this action, consideration will be given to any written comments timely received. Dated: May 2, 1995. [Attachment] JOHN DURANT, Commerce Rulings Division. Re: Country of origin of spices, substantial transformation; National Juice Products Ass'n v. U.S.; HRL 555684; HRL 734989; 19 CFR 134.25; NAFTA Article 509; HRL 733207; HRL 733945; HRL 734076; 19 CFR 134.35; 19 CFR 102.11. DEAR SIR: This is in response to your memorandum dated May 27, 1994, in which you seek internal advice with respect to the appropriate country of origin marking of various spices which are imported into the United States from Canada. Facts: In your memorandum, you indicated that your district has accepted an entry of spices imported in bags which were marked to indicate the various countries of origin. Since you believed that the goods would be simply repacked or minimally processed in the United States, your office issued a section 134.25, Customs Regulations (19 C. F. R. 134.25), marking certification request. When the certification was not provided, redelivery of the goods was ordered. At that time, the importer, Specialty Brands, indicated that no other port through which they import had requested a marking certification. The information you provided in your internal advice request pertained to products imported by Specialty Brands. In a January 25, 1994, letter, Specialty Brands provided the following as a brief explanation of the processing performed in the United States with respect to a variety of the items that they import. The country in which each spice is grown appears parenthetically. 1. Cloves are cleaned by density to remove extraneous matter, such as stems and stones. This cleaned material is then ground to a specified granulation and packaged into a 1 oz. can (Madagascar). 2. White Pepper is initially treated with Ethylene Oxide (a sterilant gas) to reduce the microbial activity. This product is then cleaned by density to remove extraneous matter, ground and packaged into a 1 oz. can (Indonesia). 3. Rosemary Leaves are treated with Ethylene Oxide and then cracked to make the product less irregular. They are then cleaned to remove extraneous material and packaged into a large commercial bottle (France). 4. Sage Leaves are treated with Ethylene Oxide, ground, and packaged into a 1 oz. can (Turkey). 5. Thyme Leaves are treated with Ethylene Oxide and then cleaned to remove extraneous matter. They are then ground and packaged into a 2 oz. can (Spain). 6. Whole Ginger is Ethylene Oxide treated to reduce microbial activity. It is then ground, and packaged into a 2 oz. can (India). 7. Salt and Coriander are ingredients used in the blending of curry powder. The Coriander is ethylene oxide treated, cleaned, and ground. Salt and other unspecified ingredients are blended in before the spice is packaged in a 2 oz. can (Canada). 8. Foenugreek Seed is used in the whole form as a bulking ingredient. It is blended with other spices and packaged in a 2 oz. can (Canada). 9. Ground celery Seed is mixed with salt, blended, and then packaged into a large commercial bottle (Canada). You indicated that, in your opinion, few imported spices and related products are processed sufficiently in the United States to be exempt from country of origin marking. In addition, you maintain that the simple processes at issue in this case do not transform the goods into articles with a different name, character or use nor do they cause the articles to undergo an applicable tariff shift pursuant to the North American Free Trade Agreement ("NAFTA") Marking Rules. Accordingly, you conclude that the goods should be marked after the United States processing to indicate the country of growth as the country of origin and section 134.25 should be applied with respect to the repackaging of this merchandise. In addition, you indicated that the source country of these products changes depending on the price and availability to the importer. Consequently, you suggested that "major source marking" would be the appropriate origin marking method. It is believed that seventy-five percent (75%) of the respective spices originate in countries which could be readily identified on the retail packaging. Upon further inquiry by this office, Specialty Brands identified the most current mixtures of ingredients and their source country(s) used in the production of the various mixed spices listed in numbers 7, 8, and 9, above (see March 15, 1995, facsimile transmission from Specialty Brands, copy enclosed). More specifically, the curry powder (number 7) contains the following ingredients (country(s) of origin are noted parenthetically): 1. Cumin seed (India) 2. Celery seed (India) 3. Mace (Indonesia) 4. Salt (U.S.) 5. Black pepper (Indonesia or India) 6. Allspice (Jamaican) 7. Pepper cayenne (U.S.) 8. Caraway (Netherlands) 10. Cloves (Madagascar) 12. Foenugreek (India) The ingredients of the pickle spice (number 8) are as follows (country(s) of origin are noted parenthetically): 1. Cinnamon (Indonesia) 2. Dill seed (India) 3. Celery seed (India) 4. Cloves (Madagascar) 5. Black pepper (Indonesia or India) 6. Mustard seed-yellow (Canada) 7. Foenugreek (India) 8. Ginger (India) 9. Bay leaves (Turkey) 11. Crushed red pepper (India) The ingredients of the celery salt (number 9) are as follows ingredients (country(s) of origin are noted parenthetically): Issue: 1. Celery seed (India) 2. Salt (U.S.) 1. Whether the non-NAFTA spices that are cleaned, ground, and packaged undergo a substantial transformation in the United States, thereby excepting the spices from country of origin marking. 2. Whether the Canadian origin spices that are imported into the United States from Canada for processing and blending become products of the United States under the NAFTA Marking Rules, thereby excepting the spices from country of origin marking. 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 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. 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." United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). SINGLE-SPICE PRODUCTS (NON-NAFTA ORIGIN) Part 134 of the 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), mandates that the ultimate purchaser in the United States must be able to find the marking easily and read it without strain. |