Last month, U.S. Customs and Border Protection ("CBP") published its final determination that the country where raw green coffee beans are roasted—not necessarily grown—is their country of origin for the purpose of government procurement. It based this decision on the grounds that roasting raw green coffee beans renders them "substantially transformed" into a new article of commerce under the Trade Agreements Act of 1979. Country of origin determinations matter for granting waivers of certain "buy American" restrictions in U.S. law or practice for products offered for sale to the U.S. government.
Coffee producer Keurig Green Mountain Inc. in late September requested that the agency decide whether the United States or Canada would be the country of origin for the roasted coffee it imports into the United States. The CBP wrote that "the roasting of the green coffee beans substantially transforms the coffee beans into either a product of Canada, or a product of the United States, for purposes of government procurement." Although it settled the issue of roasting, the CBP declined to address the legal effects of other processes such as decaffeination, grinding, flavoring, and packaging.
Takeaway: Producers and importers of coffee should note that the country of origin for purposes of government procurement of coffee is now the country where the raw green coffee beans are roasted. This decision may indicate persuasive evidence for determining country of origin for the purposes of advertising and marketing a given coffee's country of origin.
This article is presented for informational purposes only and is not intended to constitute legal advice.
