The tariff classification and country of origin of fish oil dietary supplements from Peru and Iceland

N307553 November 22, 2019 CLA-2-21:OT:RR:NC:N2:228 CATEGORY: Classification, Country of Origin, Marking TARIFF NO.: 2106.90.9898 Ms. Rae Martin Continuum Partner Consulting 11926 Aneta St. Culver City, CA 90230 RE: The tariff classification and country of origin of fish oil dietary supplements from Peru and Iceland Dear Ms. Martin: In your letter dated November 12, 2019, you requested a tariff classification and country of origin ruling on behalf of your client, Sirio Nutrition Co, Ltd., CA. Ingredients breakdowns and narrative descriptions of the manufacturing processes were provided with your inquiry. The two products are said to be encapsulated cod liver oil from Iceland and encapsulated krill oil from either Peru or Iceland. The two products are harvested, purified, and blended with antioxidants in either Peru or Iceland, and then sent to China for encapsulation. After encapsulation, the fish oils are shipped to their final destination, the United States. The applicable subheading for the encapsulated fish oil supplements will be 2106.90.9898, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included . . . other . . . other . . . other . . . other . . . other . . . other. The general rate of duty will be 6.4 percent ad valorem. You inquire as to the country of origin of fish oil dietary supplements from Peru and Iceland. The "country of origin" is defined in 19 CFR 134.1(b) as "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. The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or 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); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (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 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). The encapsulation process performed in China does not change the origin of the fish oil products because the process in China does not result in a substantial transformation of the subject fish oils. In short, the process begins with fish oil and ends with fish oil. As a result, the encapsulated fish oil products will be considered products of the country in which the fish oil is produced, namely Peru or Iceland.  The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that Except as hereinafter provided, every article of foreign origin (or its container, as provided in subsection (b) hereof) 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 an ultimate purchaser in the United States the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain. With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable. Therefore, marking the individual containers of fish oil products with “Product of Peru,” or “Product of Iceland,” depending on where the fish oil products were manufactured, would be acceptable markings. 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 Bruce N. Hadley Jr. at bruce.hadleyjr@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division