RE: Internal Advice Request; Country of Origin of Tuna Imported from the Republic of the Marshall Islands

HQ H355349 August 26, 2026 OT:RR:CTF:FTM H355349 MJD CATEGORY: Origin Center Director Agriculture and Prepared Products CEE U.S. Customs and Border Protection 6601 NW 25th Street Miami, Florida 33122 RE: Internal Advice Request; Country of Origin of Tuna Imported from the Republic of the Marshall Islands Dear Center Director: This letter is in response to a request for internal advice made pursuant to 19 C.F.R. § 177.11 regarding the country of origin of fresh, chilled, headed, and gutted tuna (“H&G Tuna”) imported from the Republic of the Marshall Islands (“RMI”) to the United States. The request was filed by Neville Peterson LLP on November 18, 2025, on behalf of HKH JVC LLC dba Norpac Fisheries Export (“Norpac”). On December 22, 2025, Neville Peterson LLP submitted a supplemental letter to the internal advice request. As such, December 22, 2025, will be considered the date that Norpac perfected its request for internal advice. Pursuant to a request from Neville Peterson LLP, on behalf of Norpac, a meeting was held with Neville Peterson LLP on March 4, 2026. FACTS: The product at issue is Yellowfin and Bigeye tuna caught in the RMI’s Exclusive Economic Zone (“EEZ”). The catching vessels are flagged in the People’s Republic of China (“China”) and the Federated States of Micronesia (“Micronesia”). The tuna is caught and processed in the following manner: H&G Tuna is caught by line. On the catching vessel, the tuna is gutted and gilled. The gutted and gilled tuna is landed in the RMI from the catching vessels. At an onshore processing facility, the Marshall Islands Fishing Vessel, Inc. Processing 1 Facility, in Majuro, the tuna is headed, detailed, washed, scanned, labeled, wrapped in bubble wrap with approximately 6 to 10 gel ice packs, and packaged 1 Removing of the fish tail. two to three tunas together in approximately 150-pound boxes and palletized for air shipment to Honolulu. Norpac provides that the Chinese- and Micronesian-flagged vessels are chartered by the Government of the RMI and operate under fishing permits issued by the RMI. ISSUE: What is the country of origin of H&G Tuna caught by Chinese- and Micronesian- flagged vessels in the EEZ of the RMI? LAW AND ANALYSIS: Country of Origin When determining the country of origin for customs purposes, the substantial transformation analysis applies. A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use, which differs from the original material subjected to the process. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). However, 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. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). The U.S. Court of International Trade (“CIT”) stated in Koru North America v. United States, 701 F. Supp. 229, 232 (Ct. Int’l Trade 1988), that the “Law of the Flag” applies to the country of origin of seafood, which means that the country of origin of the seafood follows the flag of the catching vessel. However, the CIT also indicated that we need to consider whether the seafood is subsequently substantially transformed in another country. Id. at 234. In Koru, Koru North America imported New Zealand Hoki fish that were caught in the EEZ of New Zealand. Id. at 230. The catching vessels were “ships chartered by Fletcher Fishing, Ltd (Fletcher), the largest fishing company in New Zealand while flying the flags of New Zealand, Japan and the Union of Soviet Socialist Republic{s}.” Id. The fish were later sent to South Korea where they were “thawed, skinned, boned, trimmed, glazed, refrozen and packaged for exportation to the United States.” Id. The CIT concluded that the fish had been substantially transformed in South Korea and were therefore a product of South Korea. Id. at 235. Specifically, the court noted that the fish’s name was changed due to the processes in South Korea. Id. When the fish arrived in South Korea it was identified as “headed and gutted” Hoki, and when it was exported to the United States it was called “individually quick-frozen fillets.” Id. The character of the fish had also changed due to the processes in South Korea. Id. When the fish arrived in South Korea it still looked like a whole fish, but when the fish was exported, it “no longer possess[ed] the essential shape of the fish” as it was turned into fish fillets. Id. Finally, the CIT provided that “the fillets are considered discrete commercial goods and are sold in separate areas and markets.” Id. As such, because of the transformation 2 mentioned above, the fish was “transformed, both in name and in character.” Id. The CIT also acknowledged that had the fish not been substantially transformed in South Korea, the country of origin of the fish would be New Zealand, Japan, or the Soviet Union, depending on the flag of the catching vessel. Id. Likewise, CBP has consistently held that absent a substantial transformation, the country of origin of seafood caught outside of the territorial waters of a foreign country is the country of the flag of the catching vessel. For example, in Headquarters Ruling Letter (“HQ”) 732939, dated October 9, 1990, CBP determined that crabs caught by U.S.-flagged vessels in the EEZ of the Soviet Union were not substantially transformed, and following the law of the flag, the crabs were determined to be a product of the United States. Similarly, in HQ 112287, dated August 20, 1992, CBP held that fish products that were caught and processed by a U.S.-flagged vessel within the Russian EEZ and that landed at a Russian port without a change in condition were accorded duty-free status. Also, in HQ 563123, dated December 29, 2004, CBP determined that shrimp caught and headed outside the territorial sea of Nicaragua but within its EEZ by U.S.- flagged fishing vessels and then landed in Nicaragua where the shrimp was packed and frozen, did not undergo a substantial transformation and were a product of the United States for country of origin purposes. Lastly, in HQ H326814, dated August 25, 2022, affirming New York Ruling Letter (“NY”) N326746, dated July 21, 2022, CBP stated that sea urchins harvested in Japan were not substantially transformed by processing in Japan and were therefore products of China, Mexico, or Russia for country of origin purposes, as determined by the flag of the catching vessel. In the instant case, the tuna is caught in the EEZ of the RMI by Chinese- and Micronesian-flagged vessels. On the vessels, the tuna is gutted and gilled, and then taken to an onshore processing facility in the RMI where it is headed and detailed. The operations in the RMI processing facility do not amount to a substantial transformation as they are minor operations that do not transform the fish into a different product with a new name, character, and use. The tuna retains the essential shape of a fish and is still recognized as a fish despite being gutted, gilled, headed, and detailed. Additionally, the name and use of the tuna fish remains unchanged. Thus, absent a substantial transformation, the country of origin of the tuna is the flag of the catching vessel, in this case China or Micronesia. Norpac disagrees with CBP’s determination and argues that the RMI is the country of origin of the tuna. Duty-Free Treatment of RMI Imported Articles Norpac opens its country of origin argument by asserting that the H&G Tuna is accorded duty-free treatment under the Compact Free Association between the United States and the 2 and the Harmonized Tariff Schedule of the United States Marshall Islands (“Compact”), General Note 10 (“General Note 10”), because the tuna is imported from the RMI. Norpac further notes that neither the Compact nor General Note 10 requires that the tuna be “products of” the RMI to be eligible for duty-free treatment. Norpac is incorrect. 2 Pub. L. No. 99-239, 98 Stat. 1838 (Jan. 14, 1986) (“Compact”), 48 U.S.C. § 1921, as implemented by Presidential Proclamation 6123, 71 Fed. Reg. 9425 (April 26, 1990). 3 Not only are we confident that Congress did not intend to allow any tariff to be evaded by transshipment through the RMI, but the Compact and General Note 10 unambiguously contradict Norpac’s interpretation. Specifically, Section 242(a) of the Compact states that “Unless otherwise excluded, articles imported from the Republic of the Marshall Islands, subject to the limitations imposed under sections 503(b) of title V of the Trade Act of 1974 (19 U.S.C. § 2463(b)), shall be exempt from duty” (emphasis added). While the Compact cites to specific limitations imposed by the Trade Act of 1974, we consider any provision in the Trade Act of 1974 that would impose such limitations to be an appropriate exclusion to Section 242(a) of the Compact. Specifically, section 503(a)(2)(A) of the Trade Act of 1974 states that duty-free treatment is provided only to articles that are “the growth, product, or manufacture of a beneficiary developing country…” Likewise, General Note 10 states that “any article the growth, product, or manufacture” from the Marshall Islands is subject to duty free-treatment if it meets certain requirements of General Note 10(b)(i) and (ii). Thus, for any product imported from the RMI to be eligible for duty-free treatment under the Compact or General Note 10, it must first be an article of “growth, product, or manufacture” of the RMI. With respect to wild caught fish, to be an article of “growth,” or “product” of a country, the fish would need to be caught in the territorial sea of that country. As such, it is important to define “territorial sea,” which is a term that must be distinguished from “high seas.” The territorial sea extends twelve nautical miles from the baseline, and is defined by statute, 46 U.S.C. § 2101(25) (defining “navigable waters of the United States”), reflective of the customary international law embodied in the United Nations Convention on the Law of the Sea 3 (“UNCLOS”). The sovereignty of the United States extends into the territorial sea. 33 C.F.R. § 2.22; 1833 U.N.T.S. at 407–408. U.S. sovereignty does not extend beyond the territorial sea to the “high seas.” See 33 C.F.R. § 2.32. Other U.S. legal authorities similarly distinguish between 4 “territorial seas” versus “high seas.” Therefore, fish caught within the limits of the territorial sea of a nation is “grown in” or a “product of” the coastal nation, whereas fish caught outside the territorial sea, i.e., the high seas, is a product of the flag of the catching vessel, absent a substantial transformation in another country. See Koru. In the instant case, the tuna is caught in the EEZ of the RMI, outside the territorial sea of the RMI, on Chinese- and Micronesian-flagged vessels, and is not substantially transformed when it is headed and detailed in the RMI into a product of the RMI. As a result, the tuna is not an article of “growth” or “product” of the RMI, because it is caught outside the territorial sea of the RMI. Instead, the tuna at issue is a product of China or Micronesia because it is caught in the high seas, specifically the EEZ of the RMI, on Chinese- and Micronesian- flagged vessels. Accordingly, the Compact and General Note 10 do not provide duty-free treatment to the tuna at issue because the tuna is not an article of “growth, product, or manufacture” of the RMI. 3 Oct. 10, 1982, 1833 U.N.T.S. 397, 400. The RMI has signed UNCLOS. The United States has not, but has adopted its geographic principles. 4 For example, under the Magnuson Act “[t]he term ‘high seas’ means all waters beyond the territorial sea of the United States and beyond any foreign nation’s territorial sea, to the extent that such sea is recognized by the United States.” 16 U.S.C. § 1802(20). The “customs waters” are also defined “within four leagues,” i.e., twelve nautical miles, “from the coast,” 19 U.S.C. § 1709, such that “the high seas [are] adjacent to customs waters.” Id. at 1701. 4 Koru and the Law of the Flag Next, Norpac argues that CBP cannot rely on the law of the flag rule in Koru to determine the country of origin of the tuna caught in the EEZ of the RMI. Specifically, Norpac provides that “Koru is not controlling, having been superseded by U.S. law.” As explained in the next section of this internal advice, Koru has not been superseded by U.S. law. Norpac further states that “the flag of the vessel rule is inapplicable because it is contrary to the definition of the ‘high seas’ enacted by Congress.” We are unpersuaded that the law of the flag, which provides that the country of origin of seafood caught on the high seas is determined by the flag of the vessel, absent a substantial transformation in another country, is contrary to U.S. law and the definition of “high seas” enacted by Congress which provides that the high seas are “all waters seaward of the territorial sea baseline.” See 33 C.F.R. § 2.32. In fact, the definition of the high seas enacted by Congress is consistent with Koru which reaffirmed that “since the EEZ is outside the territorial waters of a country, it is the high seas, and the fish caught on the high seas are products of the country of the flag of the catching vessel.” Koru at 231. Koru established that beyond the territorial sea of a nation, the flag of the vessel rule is applicable. We note that because the EEZ is beyond the territorial sea, then the flag of the vessel rule applies to the instant matter. Norpac argues that “the portion of Koru on which CBP relies on is dicta, not binding precedent,” stating that the “Koru court’s discussion of the law of the flag of a catching vessel was immaterial to the court’s holding and therefore is dicta.” Not only is this argument factually incorrect, it is also fundamentally misleading. The holding in Koru is as follows: [T]his Court finds that the Hoki were substantially transformed in South Korea and are thus a product of South Korea and should be properly marked as such. Additionally, had fish not been substantially transformed in South Korea they would have properly been marked as products of the Soviet Union, Japan, and New Zealand. Therefore, the holding in Koru is twofold, first, it addresses the law of the flag principle and, second, it addresses the issue of substantial transformation. In fact, the CIT’s opinion in Koru is similarly divided into two sections to address each part of the holding, including a subheading that reads: “A. The law of the flag,” and the second subheading reading: “B. Substantial Transformation.” The entire foundation of the holding in Koru was predicated on the fact that the fish were caught in the EEZ of one country by fishing vessels flying the flag of other countries. Thus, relegating pages of the CIT opinion that explain half of the holding as it relates to the significance of the law of the flag on the high seas and the EEZ of a country as dicta is not legally defensible. More specifically, Norpac attempts to rationalize away the language of the Koru decision, characterizing it as dicta (because the court later found a substantial transformation to have occurred). As discussed above, such a characterization is incorrect. Moreover, Norpac addresses neither the holding nor the reasoning in Procter & Gamble Mfg. Co. v. United States, 19 C.C.P.A. 415 (1932), upon which the CIT relied. In Procter & Gamble, the court considered whether whale oil harvested by a Norwegian vessel on the high seas was “imported from any 5 foreign country,” within the meaning of the Tarriff Act of 1930. Id. at 417-18. The court found that “the legislative policy of [the United States] for over 100 years” was that fisheries products caught by a foreign-flagged vessel on the high seas were of foreign origin, subject to the duties applicable to the flag state, and that “[a]ny other construction would result in an absurdity and might permit the destruction of high-seas fisheries of the United States,” with the court noting that “[t]he protective feature of the tariff acts…will be kept in mind when construing them.” Id. at 421-22. Indeed, the Procter & Gamble court’s holding is consistent with the Koru court’s determination that “since the EEZ is outside the territorial waters of a country, it is the high seas, and the fish caught on the high seas are products of the country of the flag of the catching vessel.” Koru at 231. Both outcomes reflect the long-standing position that any fish caught outside the territorial waters of the country are products of the country of the flag of the catching vessel. Norpac does not offer a persuasive counterargument to Procter & Gamble. Further, while Norpac claims that, under UNCLOS, full sovereignty attaches to the EEZ because that zone exists within the territorial seas of the relevant coastal state, that claim is incorrect. Under UNCLOS, a treaty which the United States has not ratified but which is binding on the RMI, the level of sovereignty exercised over the EEZ by the coastal state is less than that exercised over its territorial sea. In addition, according to UNCLOS, a coastal state’s full territorial sovereignty extends to the territorial sea, or that distance which does not exceed twelve 5 nautical miles from the baseline. As such, because the coastal state has full territorial sovereignty over the territorial sea, fish caught in the territorial sea are per se products of that coastal state. A coastal state’s sovereignty over its EEZ is limited; for example, in this zone, sovereignty is limited to exploring, conserving, and managing natural resources including 6 So, while a coastal state may establish its own acceptable fishing quotas within its fisheries. EEZ, control over that zone does not equate to full sovereignty exercised in the state’s territorial 7 seas. As illustrated by the Procter & Gamble and Koru decisions, the American interpretation of customary international law does not differ from UNCLOS in the context of distinguishing “territorial seas” from the “high seas” for purposes of determining that fish caught on the high seas are of foreign origin subject to the flag of the catching vessel. U.S. courts have determined that “the high seas” are “the waters not within any nation's territorial seas—i.e., the high seas are the waters beyond the coastal state's sovereignty, meaning those greater than twelve miles from 8 In United States v. Carvajal, the court conducted an extensive analysis of maritime the coast.” territorial jurisdiction and sovereignty under the UNCLOS regime, incorporating the decision of the International Court of Justice (ICJ) in Territorial & Maritime Dispute (Nicaragua v. Colombia), 2012 I.C.J. No. 124, which noted that the limited nature of jurisdiction in the EEZ, opining, “{s}tates enjoy specific rights, rather than sovereignty, with respect to the continental 9 Thus, the EEZ is not an extension of the territorial sea but shelf and exclusive economic zone.” 5 UNCLOS, Arts. 2, 3. See also, 46 U.S.C. § 2101(25). 6 Id. at Art. 56(1)(a), which provides, “... the coastal State has: (a) sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation and exploration of the zone, such as the, production of energy from the water, currents and winds;…” 7 Compare id. at Art. 3 with Art. 56. 8 United States v. Carvajal, 924 F. Supp. 2d 219, 234 (D.D.C. 2013) (citations omitted). 9 Id. 6 is instead considered the high seas. See also, Koru at 231. Therefore, it cannot be automatically said under either UNCLOS or U.S. law that fish caught in the EEZ of a coastal st