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NY I83001

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June 19, 2002

MAR-2 RR:NC:SP:232 I83001

CATEGORY: MARKING

Mr. Brian Kavanaugh
Deringer Logistics Consulting Group
1 Lincoln Blvd., Suite 225
Rouses Point, NY 12979

RE: COUNTRY OF ORIGIN MARKING OF IMPORTED Milk Chocolate Toffee Macadamias; ARTICLE 509

Dear Mr. Kavanaugh:

This is in response to your letter dated June 5, 2002, on behalf of Mauna Loa Macadamia Nut Corporation, requesting a ruling on the country of origin marking requirements for an imported article which is processed in a NAFTA country prior to being imported into the U.S. A marked sample was not submitted with your letter for review.

Photographs were submitted with your request. The subject merchandise is a 28 ounce bag of Milk Chocolate Toffee Macadamias. You state that the macadamias originate in Hawaii, and the chocolate and other ingredients are of United States origin. The processing is performed in the United States. The macadamias are sent in bulk to Canada, where they are packaged (we assume for retail sale), and then returned to the U.S. The photograph of the front of the packaging shows an emblem with the words “Belgian Style Chocolate.” The photograph of the back of the packaging indicates “PACKED FOR MAUNA LOA MACADAMIA NUT CORP. HC 01 BOX 3 HILO, HAWAII 96720 U.S.A.” Below the address is a telephone number, followed by a web site address, and then the words “Packaged in Canada. Country of Origin: United States of America.”

The marking statute, section 304, 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. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.

Section 134.1(b) of the regulations, defines "country of origin" as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

You state that the imported Milk Chocolate Toffee Macadamias are processed in a NAFTA country "Canada" prior to being imported into the U.S. Since "Canada" is defined under 19 CFR 134.1(g), as a NAFTA country, we must first apply the NAFTA Marking Rules in order to determine whether the imported macadamias are "goods of a NAFTA country", and thus subject to the NAFTA marking requirements.

Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.

Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the imported Milk Chocolate Toffee Macadamias are goods of the United States for marking purposes. The macadamias do not undergo the applicable change in tariff classification specified in Section 102.20 by the retail packaging in Canada, noting Section 102.17 (c). The essential character of the product is the Milk Chocolate Toffee Macadamias, noting Section 102.11 (b) (1). Since the country of origin for marking purposes of the subject merchandise is the United States, it is not required to be marked with the country of origin.

Section 134.46, Customs Regulations (19 CFR 134.46), deals with cases in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or locality in the United States, or the name of any foreign country or 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. In such a case, 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 preceded by "Made in," Product of," or other words of similar meaning.

In order to satisfy the close proximity requirement, the country of origin marking must generally appear on the same side(s) or surface(s) in which the name or locality other than the actual country of origin appears.

Because the Milk Chocolate Toffee Macadamias are of U.S. origin an ultimate purchaser of the merchandise would not be misled, within the meaning of Section 134.46, by the U.S. address which appears on the back of the product packaging.

In contrast, we believe that the reference to “Belgian Style Chocolate” on the front of the packaging will confuse or mislead an ultimate purchaser as to the origin of the imported article. One option is to remove this reference. Indicating the actual origin of the product in close proximity to this reference is acceptable to this office. However, whether an article may be marked with the phrase “Packaged in Canada. Country of Origin: United States of America”, "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the U.S.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).

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 John Maria at 646-733-3031.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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