The tariff classification and country of origin marking of fragrance oil of US origin processed in India

N250626 March 17, 2014 CLA-2-33:OT:RR:NC:2:240 CATEGORY: Classification TARIFF NO.: 3307.49.0000; 9802.00.50 Mr. Steven Steinman Hosley International 20530 Stony Island Avenue Lynwood, IL 60411 RE: The tariff classification and country of origin marking of fragrance oil of US origin processed in India Dear Mr. Steinman: In your letter dated February24, 2014, you requested a tariff classification and country of origin ruling. A retail sample of the Highly Fragranced Warming Oil and ingredients breakdown were submitted with your inquiry. You state that concentrated fragrance oil of US origin is exported to India. The concentrated fragrance oil is blended with dipropylene glycol, which is added as a solvent and diluent. The mixture is poured into 15 ml bottles, labeled, and packaged for retail sale. The dipropylene glycol, bottles, and labels are products of India. The Highly Fragranced Oil, packaged for retail sale, is a scented oil for use with an oil diffuser or oil warmer. The applicable subheading for the Highly Fragranced Warming Oil will be 3307.49.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorizers, whether or not perfumed or having disinfectant properties: Preparations for perfuming or deodorizing rooms, including odoriferous preparations used during religious rites: Other. The rate of duty will be 6 percent ad valorem. Subheading 9802.00.50, HTSUS, provides a partial duty exemption for articles that are returned after having been exported to be advanced in value or improved in condition by means of repairs or alterations, provided that the documentary requirements of 19 CFR 10.8 are met. For qualifying articles, duty is assessed only on the cost or value of the foreign processing. The process of adding dipropylene glycol solvent in India to the US origin concentrated fragrance oil constitutes an acceptable alteration within the meaning of subheading 9802.00.50, HTSUS (Headquarters ruling 561918 noted). The Highly Fragranced Warming Oil is entitled to classification under this tariff provision with duty to be assessed only upon the cost or value of the operations performed in India, provided the documentary requirements of 19 CFR 10.8. Section 304 of the Tariff Act of 1930, as amended, 19 U.S.C. 1304, provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. 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 U.S. 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 at 302; C.A.D. 104 (1940). The term "country of origin" is defined in 19 CFR 134.1(b) as follows: Country of origin means 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. A substantial transformation occurs when a new and different article of commerce emerges from a process with a new name, character, and use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940). The processing that occurs in India involves the simple combination of the concentrated fragrance oil and dipropylene glycol. The fundamental character of the concentrated fragrance oil is not altered and has not been substantially transformed. The processing of the concentrated fragrance oils in India into Highly Fragranced Warming Oil does not constitute a substantial transformation for country of origin marking purposes under 19 U.S.C. § 1304. While the finished Highly Fragranced Warming Oil is made suitable for use as a warming oil by diluting the highly concentrated fragrance oil, it retains the same chemical identity and character. In this case, mere changes in concentration do not result in a substantial transformation. Therefore, for the purposes of 19 U.S.C. § 1304, the country of origin of the concentrated fragrance oil, which determines the essential character of the Highly Fragranced Warming Oil, remains the United States. 19 C.F.R. § 134.32(m) excepts from country of origin marking requirements products of the United States which are exported and returned. Even though this provision is included as an “exception” articles which qualify under 19 C.F.R. § 134.32(m) are actually outside the scope of 19 U.S.C. § 1304. This is because the marking requirements set forth in 19 U.S.C. § 1304 apply only to “articles of foreign origin (or its container) imported into the United States.” 19 C.F.R. § 134.11. Pursuant to 19 CFR 134.32(m), products of the United States exported and returned are excepted from country of origin marking. Accordingly, by application of 19 C.F.R. § 134.32(m), the Highly Fragranced Warming Oil is exempt from country of origin marking requirements under 19 U.S.C. § 1304. We note that marking the Highly Fragranced Warming Oil as a product of the United States is a matter under the jurisdiction of the Federal Trade Commission (FTC). Therefore, should you wish to mark the articles with the phrase “Made in the U.S.A.,” we recommend that you contact them at: U.S. Federal Trade Commission, Bureau of Consumer Protection, Division of Enforcement, 600 Pennsylvania Avenue N.W., Washington, D.C. 20580, or at the FTC’s website, http://www.ftc.gov. Perfumery, cosmetic, and toiletry products are subject to the requirements of the Food, Drug and Cosmetic Act, and the Fair Packaging and Labeling Act (FPLA), which are administered by the U.S. Food and Drug Administration. Questions regarding FDA requirements may be addressed to the U.S. Food and Drug Administration, Office of Cosmetics and Colors, 5100 Paint Branch Parkway, College Park, MD 20740-3835, telephone number 888-463-6332, or by visiting their website at: www.fda.gov. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Stephanie Joseph at (646) 733-3268. Sincerely, Gwenn Klein Kirschner Acting Director National Commodity Specialist Division