Country of Origin of an Instant Noodle Product; Substantial Transformation

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H315290 February 8, 2021 OT:RR:CTF:FTM H315290 MD CATEGORY: Origin Ms. Isabel Khoo Noodie Foods 515 Park Avenue New York City, New York 10022 Re: Country of Origin of an Instant Noodle Product; Substantial Transformation Dear Ms. Khoo, This is in response to your correspondence, dated October 22, 2020, requesting a binding ruling, on behalf of Noodie Goods, concerning the country of origin of certain instant noodle product that will be ultimately imported from Vietnam. Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division (“NCSD”) for review. Our ruling is set forth below. FACTS: An instant noodle product at issue in this ruling is comprised of three component ingredients – individually packaged noodles from Thailand, freeze-dried vegetables from China, and a sauce from Japan. These ingredients possess their own ingredients, undergo production processes in Thailand, China, and Japan, respectively, and are ultimately shipped to Vietnam, where these components are packaged into the instant noodle product. An ingredients breakdown, description of the manufacturing process, manufacturing flowchart, and pictures of the product were all provided for our consideration. Pursuant to the manufacturing flowcharts, the component ingredients of the instant noodle product are produced by the following processes. The noodle is produced in Thailand by mixing the raw ingredients, churning, cutting, steaming, and drying. In Japan, the raw ingredients for the soup broth concentrate are boiled together to create the desired mixture. In China, the vegetables are grown before processing via chopping, steaming, and freeze-drying. After each of these processes, the component ingredients of the instant noodle product are packaged into individual units before being shipped to Vietnam, where they are ultimately packaged together into a box to form the instant noodle product. From Vietnam, the instant noodle product would then be imported into the United States without further processing. ISSUE: What is the country of origin of the instant noodle product? 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. 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) (emphases added). Part 134, U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b) defines “country of origin” as: [T]he 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 [the marking regulations]… A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. M.B.I. Merchandise Industries, Inc. v. United States, 16 C.I.T. 495, 502 (1992) (citing United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267, 270 (C.A.D. 98) (1940)). The question of whether a substantial transformation occurs for marking purposes is a question of fact, to be determined on a case-by-case basis. National Hand Tool Corp. v. United States, 16 C.I.T. 308, 311 (1992) (quoting Uniroyal Inc. United States, 3 C.I.T. 220 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983)). As discussed, the three component ingredients of the instant noodle product undergo processing operations in three different countries. In Thailand, the noodles are created via the mixture of water and flour into a dough; which is subsequently kneaded, rolled, slit, steamed, cut, dried, and cooled. The noodles are then subject to a metal detection process, wrapped, packaged, and shipped to a warehouse before being shipped to Vietnam. In Japan, raw ingredients are boiled in water to create the soup broth concentrate, which is then packaged and shipped to Vietnam. In China, raw vegetables are chopped and dried before undergoing the process of freeze-drying. This process of low temperature dehydration involves the freezing of the vegetables, the lowering of pressure, and the removal of ice via heat sublimation. After freeze-drying, the vegetables are packaged into individual units and shipped to Vietnam. When the three component ingredients arrive in Vietnam, they arrive individually packaged and require no further processing. Rather, they are placed into a box and sealed for final sale and shipment into the United States as the instant noodle product. Due to its manufacturing process, or lack thereof, the instant noodle product is not a product of Vietnam. While substantial processing operations go into the production of the noodles, soup broth concentrate, and freeze-dried vegetables in Thailand, Japan, and China, respectively, the extent of processing operations that occurs in Vietnam is the mere combination of these separately-packaged component ingredients into a single box for sale and export. If the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal Inc. United States, 3 C.I.T. 220 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983)). In such a case, the article retains its initial country of origin, since mere packaging of component ingredients does not substantially transform any of the components. See Headquarters Ruling Letter (“HQ”) H309106, dated April 15, 2020. Applied to cases involving meal kits, precedent shows that the component ingredients of a kit retain the country of origin from where they were produced. In New York Ruling Letter (“NY”) N200617, dated February 10, 2012, the merchandise at-issue was a dinner kit. While certain component ingredients were of Romanian origin, others were of American origin. CBP found that since the component ingredients were simply packed and sealed together, no substantial transformation occurred. Thus, the component ingredients possessed their initial countries of origin. Likewise, in NY N054086, dated March 26, 2009, a stir-fry kit possessed component ingredients of various countries of origin. CBP found that no substantial transformation had occurred when the ingredients; namely vegetables from the United States or Mexico and pineapple from Costa Rica, were simply packed together for sale. Rather, CBP found that the component ingredients retained their respective countries of origin. Here, the instant noodle product is merely packaged in Vietnam – no substantial transformation of its component ingredients occurs. As a result, each component ingredient retains its initial country of origin where a substantial transformation occurred. During processing in Thailand, various ingredients were mixed, churned, cut, steamed, and dried to form a completely new product with a new name, character, and use – noodles. Similarly, the boiling of raw ingredients in Japan creates a new ingredient with a different name, character, and use – soup broth concentrate. Lastly, while CBP has held that freeze-drying vegetables does not constitute a substantial transformation of the product, CBP does consider the country where the vegetables were initially grown to be their country of origin. See NY N052803, dated March 10, 2009 (discussing that freeze dried fruits and vegetables are not substantially transformed by means of the freeze drying process, and remain goods of their respective country of countries of origin). Here, each of the vegetables were both grown and processed in China. Since the component ingredients of the instant noodle product do no undergo a substantial transformation during mere packaging in Vietnam, nor any transformation beyond their initial processing, they remain goods of their respective countries. Specifically, the noodles are a product of Thailand, the soup broth concentrate is a product of Japan, and the freeze-dried vegetables are a product of China. HOLDING: Based on the facts provided, the country of origin of the instant noodle product is Thailand, Japan, and China. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a CBP field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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, Yuliya A. Gulis, Chief Food, Textiles and Marking Branch