## Facts

- Koru North America imported frozen hoki fillets entered at Seattle in February 1988, packaged and marked “Product of New Zealand.”
- The fish (New Zealand hoki) were caught within New Zealand’s Exclusive Economic Zone by vessels flying New Zealand, Japanese, and Soviet flags, under charter to a New Zealand fishing company.
- On the vessels, the fish were beheaded, eviscerated, and frozen; they were then landed in New Zealand, commingled, stored under New Zealand control, and inspected and certified by New Zealand authorities as of New Zealand origin and compliant with New Zealand requirements.
- The headed-and-gutted fish were shipped to Korea, where they were thawed, skinned, boned, trimmed, glazed, refrozen, and packaged into fillets for export to the United States.
- Customs issued a Notice of Redelivery and excluded the shipment, asserting the marking was incorrect; Customs first required “Product of the Soviet Union” and later required “Product of the Soviet Union, Japan and New Zealand,” based on the flags of the catching vessels.
- Koru sued in the Court of International Trade, arguing the goods were correctly marked as products of New Zealand and that Customs’ exclusion and notice were unlawful.

## Issues

1. Whether, for country-of-origin marking, the origin of fish caught within a coastal state’s EEZ is determined by the catching vessels’ flags (“law of the flag”) or by harvesting under the coastal state’s EEZ rights and control.
2. Whether processing in Korea (converting headed-and-gutted fish into packaged fillets) changed the country of origin for marking purposes.

## Decision

- The Court of International Trade ruled for Koru and held Customs’ exclusion and Notice of Redelivery improper.
- The court rejected Customs’ “law of the flag” approach for these facts and held the merchandise could be marked “Product of New Zealand.”
- The court treated the harvesting and New Zealand’s regulatory control and certification as controlling for origin, despite mixed vessel flags.
- The court concluded the Korean processing did not shift origin away from New Zealand for marking purposes.

## Legal Principles

- Country-of-origin marking must identify the country of origin in a manner consistent with the purpose of informing the ultimate purchaser.
- For fish taken within a coastal state’s EEZ, the coastal state’s recognized rights and actual control over harvesting and certification may support treating the catch as originating in that coastal state, rather than attributing origin to vessel nationality.
- Further processing in a second country does not change origin absent a substantial transformation into a new and different article of commerce.

## Conclusion

The court held that hoki harvested within New Zealand’s EEZ under New Zealand control and certification was properly marked as a product of New Zealand, and that later processing in Korea into frozen fillets did not alter the country of origin; Customs therefore acted unlawfully in excluding the shipment based on vessel-flag marking requirements.


Koru N. Am. v. United States, 701 F. Supp. 229 (Ct. Int’l Trade 1988)