CLA-2-17:RR:NC:SP:232 C82415
Mr. Timothy C. Stanceu
Hogan & Hartson L.L.P.
555 13th Street, N.W.
Washington, D.C. 20004-1109
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Powdered Instant Beverage Products from Canada; Article 509
Dear Mr. Stanceu:
In your letter dated November 26, 1997, on behalf of Kraft Foods, Inc., you requested a ruling on the status of various powdered instant beverage products from Canada under the NAFTA. Your request also asks for the country of origin for marking purposes and for tariff rate quota allocation purposes.
The subject merchandise will consist of powdered instant beverage products in four flavors: Lemonade, Pink Lemonade, Orange and Tropical Punch. The products will contain sugar refined from sugar beets, fructose, citric acid, ascorbic acid, flavors, colors, and, in some formulations, gums, vitamins and preservatives. The beet sugar of all of the products will be produced in Canada. The fructose in all of the products will be of United States origin. The balance of the ingredients may be from the United States, Canada, or non-Nafta countries. The ingredients are blended and packaged in Canada into retail containers. The retail consumer prepares a finished beverage by the addition of water.
The applicable tariff provision for the powdered instant beverage products, if imported in quantities that fall within the limits described in additional U.S. note 8 to chapter 17, will be 1701.91.5400 Harmonized Tariff Schedules of the United States (HTS), which provides for cane or beet sugar and chemically pure sucrose in solid form: other...containing added flavoring matter whether or not containing added coloring...articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17...described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions. The general rate of duty will be 6 percent ad valorem. If the quantitative limits of additional U.S. note 8 to chapter 17 have been reached, the product will be classified in subheading 1701.91.5800, HTS, and dutiable at the rate of 36.9 cents per kilogram plus 5.6 percent ad valorem.
If all of the ingredients are from the United States and Canada, the powdered instant beverage products, being wholly obtained or produced entirely in the territory of the United States and Canada, will meet the requirements of HTSUSA General Note 12(b)(i), and, if classifiable under subheading 1701.91.5400, HTS, will be entitled to a 0.6 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
If the ingredients, other than the beet sugar, or fructose, are from non-Nafta countries, each of the non-originating materials used to make the powdered instant beverage products have satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/17. The powdered instant beverage products, if classified in subheading 1701.91.5400, HTS, will be entitled to a 0.6 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
Your inquiry also requests 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., and on the country of origin for duty and quota allocation purposes. A marked sample was not submitted with your letter for review.
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 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 powdered instant beverage products 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 powdered instant beverage products 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 powdered instant beverage products are goods of "Canada" for marking purposes, since they satisfy the requirements of Section 102.11(b)(1).
Since the powdered instant beverage products are goods of Canada for marking purposes, the country of origin of the powdered instant beverage products for Customs duty purposes and for the tariff rate quota allocation is "Canada".
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.
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 212-466-5730.
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., NW, Washington, DC 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division