OT:RR:CTF:VS H323401 RB
Mr. John M. Peterson
Neville Peterson LLP
One Exchange Plaza
55 Broadway, Suite 2602
New York, NY 10006
RE: Subheading 9801.00.10, HTSUS; Frozen Fruit
Dear Mr. Peterson:
This is in response to your letter, dated January 3, 2022, on behalf of your client, Nature’s Touch Frozen Foods Inc. (“Nature’s Touch”), concerning the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (“HTSUS”) to frozen fruit. Your request was forwarded to this office from the National Commodity Specialist Division for review. Our ruling is set forth below.
FACTS:
Nature’s Touch is a Canadian company headquartered in Montreal, Quebec. According to Nature’s Touch, bulk frozen fruit from Chile, Ecuador, Mexico, Serbia and various other countries will be imported into the United States and entered for consumption at the Port of Champlain, New York, where all required duties, taxes and fees will be paid. Subsequently, the goods will be exported to the company’s Canadian plant, where they will be stored and segregated within the warehouse management reporting system for traceability purposes.
Thereafter, the bulk frozen fruit will be repackaged into retail bags. You state that no operations will be performed other than repacking the fruit into individual portion-controlled retail bags. No substances will be added to the fruits, and no operations will be performed other than repacking.
In some cases, the retail bags will contain a single fruit product, e.g., strawberries or raspberries. In other cases, Nature’s Touch will pack multiple fruits together in a single retail bag, as a “fruit medley” or similar combination.
Nature’s Touch plans to enter the fruit under the provisions of subheading 9801.00.10, HTSUS.
ISSUES:
Whether the merchandise is eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
LAW AND ANALYSIS:
Section 904(b) of the Trade Facilitation and Trade Enforcement Act of 2015 (Pub. L. 114-125, February 24, 2016) amended subheading 9801.00.10, HTSUS, to include any products which are returned within 3 years after having been exported. Previously, subheading 9801.00.10, HTSUS, only applied to products of the United States. Subheading 9801.00.10, HTSUS, now provides for the duty-free treatment of:
Products of the United States when returned after having been exported, or any other products when returned within 3 years after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.
In the instant case, you state that the frozen fruit products are not products of the United States, but from Chile, Ecuador, Mexico, Serbia and various other countries. Although we have not been provided with any information on the value of your planned shipments, we assume for purposes of your inquiry that they would be valued at over $2,500.
Section 10.1, CBP Regulations (19 C.F.R. § 10.1) sets forth the documentary requirements for entry under subheading 9801.00.10, HTSUS. We note that CBP has not yet amended the regulations to implement the change to subheading 9801.00.10, HTSUS. Nonetheless, 19 C.F.R. § 10.1(a)(1) provides that the foreign shipper declare the following information with regard to articles in a shipment valued over $2,500: the port of exportation, the date of exportation, the quantity, the description of the merchandise, the value of the merchandise, the date of the declaration, and whether the articles were returned without having been advanced in value or improved in condition by any process of manufacture or other means. In addition, the documentation is to be filed “in connection with the entry.”
Section 10.1(a)(2), CBP Regulations (19 C.F.R. § 10.1(a)(2)), requires the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry to declare that the foreign shipper’s statement is true, and, that the articles were not manufactured or produced in the United States under subheading 9813.00.05, HTSUS, and that the articles were exported from the United States without benefit of drawback. The information required also pertains to the name of the manufacturer, the location of the manufacturer, and the date of the declaration.
You state that the merchandise will be imported into the United States within three years after having been exported to Canada. Further, you state that the goods will be exported from the United States to Canada without the benefit of drawback. You also provide that while the merchandise is in Canada, it is stored in a warehouse and Nature’s Touch inventory tracks the merchandise by shipment, product, and all of the merchandise can be traced back to specific U.S. Customs entries, export bills of lading, and Canadian B-2 Customs entries for consumption transaction, which would help verify that the returned article is the same article that was exported from the United States. You also state that the frozen fruit exported to Canada will not undergo any operations, other than storage and repacking the shipments.
In United States v. John v. Carr & Sons, Inc., 347 F. Supp. 1390 (Cust. Ct. 1972), 496 F.2d 1225 (CCPA 1974), the court stated that absent some alteration or change in the item itself, the mere repackaging of the item, even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified under item 800.00, Tariff Schedules of the United States (TSUS) (now subheading 9801.00.10, HTSUS). Since mere repackaging does not advance in value or improve in condition the frozen goods at issue, the merchandise will be eligible for duty-free treatment under subheading 9801.00.10, HTSUS, provided the documentary requirements of 19 C.F.R. § 10.1 are satisfied.
HOLDING:
Based on the information presented, the frozen fruit products at issue are eligible for duty-free treatment under subheading 9801.00.10, HTSUS, provided the documentary requirements of 19 C.F.R. § 10.1 are satisfied.
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 conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch