Binding Ruling Request; Country of Origin Marking Requirements for specialty oils and essential fatty acids

HQ H266602 May 10, 2016 CLA-2 OT: RR: CTF: TCM: H266602 ERB CATEGORY: Marking Mr. Neil Helfand Sandler Travis & Rosenberg, P.A. 550 Sansome Street, Suite 1475 San Francisco CA 94111 RE: Binding Ruling Request; Country of Origin Marking Requirements for specialty oils and essential fatty acids Dear Mr. Helfand: This letter is in response to your request, dated June 16, 2015, made on behalf of your client, Bioriginal Food & Science Corporation (“Bioriginal”) for a binding ruling regarding the country of origin marking of imported specialty oils and essential fatty acids to food and nutraceutical industries across North America. No samples were provided for this analysis, but photos were submitted. Specifically, you requested a binding ruling pursuant to 19 CFR § 177.1, regarding whether a proposed method of marking satisfies the marking requirements, where the container in which the products are imported have the country of origin marking in lieu of marking the article itself, and whether this is an acceptable country of origin marking for the imported items. FACTS: We are informed that Bioriginal manufactures and bottles various plant and marine based specialty oils and essential fatty acids at its facility in Saskatoon, Saskatchewan, Canada. In its submission Bioriginal explains and proposes a marking scheme which it argues fulfills its requirements under CBP regulations. In Canada, Bioriginal fills bottles with the oils. The bottles themselves are unmarked and unlabeled. Bioriginal then packages the bottles in containers which are marked on the outside with the country of origin (“Made in Canada”). Bioriginal then imports the containers of glass bottles to its customers in the United States, which are distributors of the oils. Subsequent to importation, the containers of the bottles are opened, unpacked, and inspected by the distributor. To be clear, the oil is not removed from the bottles; rather, the bottles of oils are removed from the containers for inspection and labelling. The distributor then individually labels each filled glass bottle with its own label that includes dietary and ingredient information about the oil. A photocopy of one of the labels was provided with Bioriginal’s submission and it states in part relevant to this analysis the following: “Dist. By: Nutri-West, P.O. Box 950, Douglas WY 82633 Product of Canada.” After labelling, the bottles of oil are repacked in new marked cartons for shipment to retail locations throughout the United States. Bioriginal’s submission states that a Certificate of Marking by Importer – Repacked Articles Subject to Marking is completed by Bioriginal. Additionally a Notice to Subsequent Purchaser or Repacker is sent to the purchaser/repacker. Bioriginal states that this notice is usually provided on the Packing List. Samples of both certifications were provided with Bioriginal’s submission. ISSUE: Whether the marking scheme proposed by Bioriginal satisfies the applicable marking requirements. LAW & 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. 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).       Part 134, CBP Regulations (19 CFR § 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.41(b) CBP Regulations (19 CFR § 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. See 19 CFR § 134.41(b). Section 134.1(d) defines the ultimate purchaser as generally the last person in the United States who will receive the article in the form in which it was imported; however, for a good of a NAFTA country, the “ultimate purchaser” is the last person in the United States who purchases the good in the form in which it was imported. The latter half of that clause is relevant here, as the bottles of oils are imported to the United States from Canada, which are both NAFTA countries. Section 134.1(d) continues to provide helpful examples. It states: (1) 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, even though the process may not result in a new or different article, or for a good of a NAFTA country, a process which results in one of the changes prescribed in the NAFTA Marking Rules as effecting a change in the article's country of origin. (2) If the manufacturing process is merely a minor one which leaves the identity of the imported article intact, the consumer or user of the article, who obtains the article after the processing, will be regarded as the “ultimate purchaser.” With respect to a good of a NAFTA country, if the manufacturing process does not result in one of the changes prescribed in the NAFTA Marking Rules as effecting a change in the article's country of origin, the consumer who purchases the article after processing will be regarded as the ultimate purchaser. (3) If an article is to be sold at retail in its imported form, the purchaser at retail is the “ultimate purchaser.” (4) If the imported article is distributed as a gift the recipient is the “ultimate purchaser”, unless the good is a good of a NAFTA country. In that case, the purchaser of the gift is the ultimate purchaser. Section 134.1(d)(1) and (2) are not relevant here, as the bottles will not be used in manufacture. Section 134.1(d)(4) is not relevant, as the bottles are not gifts. This leaves example (3) of § 134.1(d), if an article is to be sold at retail in its imported form, the purchaser at retail is the “ultimate purchaser.” Here, the ultimate purchaser for purposes of § 134.1(d) is the final retail consumer in the United States, not Bioriginal’s distributors of the bottles of oil. Bioroginal proposes to utilize the procedures set forth in 19 C.F.R. § 134.26(a) to fulfill the country of origin marking requirements. Section 134.26(a) provides that if an article subject to country of origin marking is intended to be repacked after its release from Customs custody, or the port director having custody of the article has reason to believe that the article will be repacked after its release, the importer shall certify to the port director that: 1) if the importer does the repacking, he shall not obscure or conceal the country of origin marking appearing on the article, or else the new container shall be marked to indicate the country of origin of the article; or 2) that if he does not repack the article he will give notice to subsequent purchasers or repackers of their obligations under section 19 U.S.C. 1304 and Part 134, Customs Regulations. It is important to note that the procedures set forth at 19 C.F.R 134.26 apply only to articles which are legally marked at the time of importation. If the articles are not legally marked at the time of importation, the presentation to Customs of the certification and notice to subsequent purchasers or repackers specified in 19 C.F.R 134.26 will not serve to satisfy the importer's obligations under 19 U.S.C. § 1304 and Part 134, Customs Regulations (19 C.F.R Part 134). In determining whether the imported articles are legally marked, however, we point out that an article otherwise subject to individual marking may be excepted from this requirement where its container will reasonably indicate the country of origin, pursuant to 19 C.F.R § 134.32(d). Therefore, where the outermost container of the bottles of oil to be repacked in the United States is correctly marked with the country of origin of the bottles of oil contained within, the certification procedures of 19 C.F.R § 134.26 may be utilized, provided that the containers in which the repackaged bottles of oil will reach the retail purchaser will be marked in accordance with the requirements of 19 U.S.C. § 1304 and 19 C.F.R. Part 134. Based on the photocopy of the label that will be placed on the bottle, which was provided by Counsel, the proposed scheme complies with the requirements of 19 U.S.C. § 1304 and 19 C.F.R. Part 134. We will also note that as mentioned above, the label affixed onto the filled bottles post- importation contains a United States address (i.e. Douglas, Wyoming). This triggers the requirements of 19 CFR § 134.46, which provides for, “Marking when name of country or locality other than country of origin appears”. Section 134.46 explains that when any other locality other than the country or locality in which the article was manufactured or produced appears on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin of the article, 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. See 19 CFR § 134.46. In this case, the label is acceptable in that regard, since the words “Product of Canada” are in lettering of identical size, and are in close proximity to the Wyoming address. HOLDING: Based upon the facts provided, the bottles of oil may be excepted from individual marking as the outermost container will be properly marked with the origin of the oil, provided Bioriginal executes the certification set forth in 19 C.F.R. § 134.26, and each repacked bottle of oil will reach the retail purchaser marked in accordance with the requirements of 19 U.S.C. § 1304 and 19 C.F.R. Part 134. The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1), which states that a ruling letter is issued on the assumption that all information furnished in connection with the ruling request and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of origin or eligibility of the articles for an exception to marking requirements of 19 U.S.C. 1304. 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, Ieva K. O’Rourke, Chief Tariff Classification & Marking Branch