CLA-2 OT:RR:CTF:TCM H278984 GaK
TARIFF NO: 1515.90.8090
Justin Burt
Natures Crops International
P.O. Box 248
12682 Route 6
Kensington, PEI Canada
COB 1M0
RE: Tariff classification of imported ahiflower oil; country of origin marking
Dear Mr. Burt:
This is in response to your letter to the U.S. Customs & Border Protection, received on September 2, 2016, requesting a binding ruling regarding the tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) and country of origin of imported refined ahiflower oil.
FACTS:
The refined ahiflower (buglossoides arvenis or lithospermum arvense) oil is derived from ahiflower seeds. It is composed of 99.9 percent ahiflower oil and 0.1 percent fortium (rosemary extract). The seeds are grown and pressed in the United Kingdom. The resulting meal is extracted with hexane to acquire crude ahiflower oil. The crude oil is subsequently shipped to Canada where it is treated with acid, degummed, bleached, filtered, deacidified, deodorized, cooled, packaged under nitrogen gas and shipped.
ISSUES:
What is the tariff classification of the imported ahiflower oil?
What is the proper country of origin of the imported ahiflower oil for marking purposes?
LAW AND ANALYSIS:
I. Classification
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The HTSUS subheading under consideration is the following:
1515.90.80 Other fixed vegetable fats and oils (including jojoba oil) and their fractions, whether or not refined, but not chemically modified: Other: Other
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTS and are thus useful in ascertaining the proper classification of the merchandise. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The general ENs to Chapter 15, HTSUS, state, in pertinent part, the following:
GENERAL
* * *
(B) Headings 15.07 to 15.15 of this Chapter cover the single (i.e., not mixed with fats or oils of another nature), fixed vegetable fats and oils mentioned in the headings, together with their fractions, whether or not refined, but not chemically modified.
Vegetable fats and oils occur widely in nature and are found in the cells of certain parts of plants (e.g., seeds and fruit), from which they are extracted by pressure or by means of solvents…
The fats and oils covered by these headings are mainly obtained from the oil seeds and oleaginous fruits of headings 12.01 to 12.07, but may also be obtained from vegetable materials classified elsewhere (e.g.: olive oil, oils obtained from kernels of peaches, apricots or plums of heading 12.12, oils obtained from almonds, walnuts, pignolia nuts, pistachio nuts, etc., of heading 08.02, oil obtained from germ of cereals).
These headings cover crude fats and oils and their fractions, as well as those which have been refined or purified, e.g., by clarifying, washing, filtering, decolourising, deacidifying or deodorising.
The instant ahiflower oil is a vegetable oil because it is derived from the seeds of the ahiflower plant. CBP has consistently found that vegetable oil with 95 percent triglyceride and above is classifiable in Chapter 15 of the HTSUS. See, e.g. Headquarters Ruling Letter (“HQ”) 964014, dated February 8, 2002; HQ 964594, dated January 30, 2002; and HQ 962314, dated May 25, 1999. This ahiflower oil contains 100 percent vegetable oil triglyceride. Accordingly, the ahiflower oil is classified in subheading 1515.90.8090, HTSUS.
II. Country of Origin Marking
Section 304 of the 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 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. The regulations implementing the requirements and exception to 19 U.S.C. § 1304 are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134).
Pursuant to 19 C.F.R. § 134.1(b), the country of origin means 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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. Since Canada is a NAFTA country, the NAFTA Marking Rules must be applied in this case.
Part 102, Customs and Border Protection Regulations (19 C.F.R. Part 102), sets forth the NAFTA Marking Rules. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes. See 19 C.F.R. § 102.11. Applied in sequential order, the required hierarchy establishes that the country of origin of a good is the country in which:
(a)(1) The good is wholly obtained or produced;
(a)(2) The good is produced exclusively from domestic materials; or
(a)(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the imported ahiflower oil is neither wholly obtained nor produced exclusively from “domestic” (Canadian, in this case) materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). “Foreign material” is defined in 19 C.F.R. § 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The applicable rule for subheading 1515.90, HTSUS, in section 102.20 requires:
[a] change to headings 1501 through 1516 from any other chapter, except from heading 3823.
As discussed above, the imported ahiflower oil is classified in subheading 1515.90, HTSUS. According to the information presented, the non-originating material is classified in heading 1515, HTSUS. The foreign material does not meet the tariff shift requirement, and the ahiflower oil may not be marked as goods of Canada.
Proceeding through the hierarchy, 19 C.F.R 102.11(b) provides that:
[e]xcept for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good…
In accordance with the rules of interpretation set forth in 19 C.F.R. § 102.18(b)(1)(iii), if there is only one material that is classified in a tariff provision for which a change in tariff classification is not allowed under the section 102.20(c)/1501-1516 specific rules, then that material will represent the single material that imparts the essential character to the good under section 102.11. In this case, the United Kingdom origin ahiflower crude oil is the single material that imparts the essential character to the good and therefore, the United Kingdom will be the country of origin for marking purposes.
HOLDING:
By application of GRI 1, the ahiflower oil is correctly classified in heading 1515, HTSUS. It is specifically provided for in subheading 1515.90.8090, HTSUSA, which provides for “[o]ther fixed vegetable fats and oils (including jojoba oil) and their fractions, whether or not refined, but not chemically modified: Other: Other: Other.” The 2017 column one general rate of duty is 3.2%. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the world wide web at www.usitc.gov.
The country of origin of the imported ahiflower oil for marking purposes is the United Kingdom.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy of this ruling, it should be brought to the attention of the CBP officer handling the transaction.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any condition on which the ruling was based.”
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classification & Marking Branch