OT:RR:CTF:VS H286682 RMC
Center Director
Agriculture and Prepared Products
Center of Excellence and Expertise
U.S. Customs & Border Protection
3450 NW 62nd Ave.
Miami, FL 33166
ATTN: Seth Winterholler
Re: Internal Advice Request; NAFTA Eligibility of Salad Topper; GN 12(s)(ii)
Dear Center Director:
This is in response to the request for internal advice (“IA”) initiated by counsel for NaturSource, Inc. (“NaturSource”). The IA concerns the eligibility of the NaturSource Smart Life salad topper product for preferential tariff treatment under the North American Free Trade Agreement (“NAFTA”).
FACTS:
NaturSource is a Canadian producer of specialty nuts, trail mixes, and granolas. One product offered by NaturSource is the Smart Life organic salad topper. The Smart Life salad topper is a mix of dry roasted sunflower seeds, dried cranberries, dry roasted pumpkin seeds, and tamari sauce that is designed to be sprinkled on top of a salad.
On February 23, 2017, a shipment of NaturSource Smart Life salad topper was entered at Port Huron, Michigan, with a claim for preferential tariff treatment under NAFTA. Several weeks later, the Center initiated a verification of the NAFTA preference claim and issued a Request for Information (CBP Form 28) asking for documentation to substantiate the NAFTA preference claim. NaturSource responded with a completed NAFTA Verification of Origin Questionnaire (CBP Form 446) providing information about the production process and ingredients used in the Smart Life salad topper. While the verification was being conducted, counsel for NaturSource also filed a binding ruling request with this office, asking us to determine whether the Smart Life salad topper is eligible for NAFTA preferential tariff treatment. As CBP regulations limit binding rulings to prospective transactions, 19 C.F.R. § 177.11, counsel agreed to recharacterize the submission as a request for IA rather than withdraw the ruling request.
According to the information provided, the sunflower and pumpkin seeds used in the product are imported from China into Canada in a raw state. In Canada, the raw pumpkin seeds are received, screened, “baked in a dry, hot-air oven,” weighed, and air-filter cooled. The raw sunflower seeds are received, screened, and then cooked. Counsel has requested confidential treatment for some of sunflower seeds’ cooking processes, which need not be disclosed here. After the sunflower seeds are cooked, a measured quantity of tamari sauce is added. Counsel characterizes this as “an additional cooking process” and states that this ensures that the tamari sauce is cooked evenly onto the sunflower seeds. Once dry, the sunflower seeds are transferred to bins.
To complete the production process, the pumpkin seeds, sunflower seeds, and U.S.- or Canadian-origin cranberries are mixed in specified portions, with the sunflower seeds constituting the most important ingredient by weight. The product is then packaged, after which it is ready for sale.
It is undisputed that the product is classified in subheading 2008.19.85, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “[f]ruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not otherwise specified or included: Nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together: Other, including mixtures: Mixtures.” The tariff classification and country of origin of the product’s non-originating materials are also not at issue:
Sunflower Seeds: 1206.00, HTSUS (China);
Pumpkin Seeds: 1212.99, HTSUS (China); and
Tamari Sauce: 2103.10, HTSUS (Japan).
ISSUE:
Whether the Smart Life salad topper qualifies for preferential tariff treatment under the NAFTA.
LAW AND ANALYSIS:
To be eligible for tariff preferences under the NAFTA, goods must be “originating goods” within the rules of origin set forth in GN 12(b), HTSUS, and qualify to be marked as goods from Mexico or Canada under 19 C.F.R. Part 102. Goods imported into the United States may be considered goods originating in the territory of a NAFTA party if “they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States,” or “they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials.” See GN 12(b)(i) and (iii), HTSUS. Goods may also be considered originating if they have been “transformed in the territory of Canada, Mexico and/or the United States” pursuant to GN 12(b)(ii)(A), HTSUS, which states:
except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein . . . .
Here, the GN 12(t) tariff shift rule applicable to good classified in subheading 2008.19.85, HTSUS, requires “[a] change to subheadings 2008.19 through 2008.99 from any other chapter.” Because the non-originating materials in the Smart Life salad topper are classified in Chapter 12 (sunflower seeds and pumpkin seeds) and Chapter 21 (tamari sauce), the GN 12(t) tariff shift rule appears to be satisfied. However, even if a product meets any applicable tariff shift rule in GN 12(t), an exception provided for in GN 12(s) may apply. At issue in this case is whether the exception in GN 12(s)(ii) prevents the Smart Life salad topper from originating under the NAFTA.
GN 12(s)(ii) provides that:
Fruit, nut and vegetable preparations of chapter 20 that have been prepared or preserved merely by freezing, by packing (including canning) in water, brine or natural juices, or by roasting, either dry or in oil (including processing incidental to freezing, packing, or roasting), shall be treated as an originating good only if the fresh good were wholly produced or obtained entirely in the territory of one or more of the NAFTA parties.
In other words, although the Smart Life salad topper meets the GN 12(t) tariff shift rule, it will not be considered an originating good if (1) the product is a “fruit, nut [or] vegetable preparation of chapter 20”; (2) the product was prepared or preserved merely by roasting, either dry or in oil (including processing incidental to roasting); and (3) the fresh good was wholly produced or obtained outside the territory of one of the NAFTA parties.
“Fruit, Nut [or] Vegetable Preparations of Chapter 20”
As noted above, it is undisputed that the product is classified in chapter 20 (specifically, in 2008.19.85, HTSUS). Furthermore, the inclusion of the language “otherwise prepared or preserved” in 2008.19.95, HTSUS, clearly indicates that the product is a preparation. Based on the plain meaning of these terms, the product is a “preparation . . . of chapter 20” within the meaning of GN 12(s)(ii).
The issue, however, is whether the Smart Life salad topper is a preparation of “fruit, nut[s] [or] vegetable[s].” The type of preparation that is formed when ingredients are combined is generally determined by the ingredient that imparts the essential character of the product. See Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed. Cir. 1998) (“The term ‘prepared’ suggests, but does not require, the addition of incidental ingredients that do not affect the essential character of the product.”). Here, the sunflower seeds are by far the most significant ingredient by weight in the product.
The NAFTA does not define the term “fruit” for purposes of GN 12(s)(ii). Accordingly, we look to the dictionary definition of “fruit” to understand its common meaning. In relevant part, a fruit is defined as “the usually edible reproductive body of a seed plant, especially one having a sweet pulp associated with the seed.” See Webster’s New Collegiate Dictionary (1977) at 463. Sunflower seeds are the edible reproductive body of the sunflower plant and are therefore botantically considered to be a fruit. See G. Saupe, Ph.D., Plant Taxonomy: Fruits/Seeds, College of Saint Benedict Saint John’s University, https://employees.csbsju.edu/SSAUPE/biol308/lecture/ fruits.htm (last visited July 16, 2018) (“Seeds vs. Fruits. These terms are often incorrectly applied (from a strict botanical sense) by the non-botanist. For example, sunflower seeds and corn grains are actually fruits.”).
The Federal Circuit’s interpretation of the common meaning of “sunflower seeds” provides additional support. In Well Luck Co. v. United States, 887 F.3d 1106 (Fed. Cir. 2018), the Federal Circuit considered a dictionary definition describing sunflower seeds as “fruits” in order to determine the common meaning of “sunflower seeds” as used in HTSUS heading 1206. Among other definitions, the court cited the Oxford English Dictionary’s definition of “sunflower seed” as “any of the edible, oil-rich grey seeds of a sunflower; the fruit (an achene with a thin, hard shell) containing such a seed; (as a mass noun) such seeds or fruits collectively.” See id. at 1113 (quoting The Oxford English Dictionary (3d ed. 2018). Based on this precedent and our review of dictionary definitions, sunflower seeds, which are the primary ingredient in NaturSource’s product, fall within the common meaning of the term “fruit.” Accordingly, the product is considered a “fruit . . . preparation of Chapter 20” for purposes of GN 12(s)(ii).
“Prepared or Preserved Merely by . . . or by Roasting, Either Dry or in Oil (Including Processing Incidental to Freezing, Packing, or Roasting”
Counsel also claims that even if the product is considered a “fruit, nut or vegetable preparation of chapter 20,” GN 12(s)(ii) does not apply because the preparation processes that occur in Canada exceed the scope of “roasting” and “processing incidental to . . . roasting.” This claim is based on three processing operations that occur in Canada. First, the raw, Chinese-origin pumpkin seeds are baked in “a dry, hot-air oven” and subsequently dried in a filtered air cooling system. Second, the Chinese-origin sunflower seeds are cooked. And third, an “additional cooking process” of the sunflower seeds occurs after the cooking while the seeds are cooling by adding tamari sauce. Counsel states that this step ensures that the sauce is distributed evenly onto the sunflower seeds.
The dictionary definition of “to roast” is “to cook by exposing to dry heat (as in an oven or before a fire) or by surrounding with hot embers, sand, or stones.” See Webster’s New Collegiate Dictionary (1977). As this definition indicates, the essential process involved in roasting is cooking by exposing to dry heat. Roasting can thus occur in an oven, before a fire, or in other places.
Here, although referred to as “baking,” cooking pumpkin seeds in a “dry, hot-air oven” is indistinguishable from roasting as that term is commonly understood. Similarly, exposing the sunflower seeds to dry heat in order to cook them, is a form of roasting. Both the “baking” of the pumpkin seeds and the cooking of the sunflower seeds therefore qualify as “roasting” for purposes of GN 12(s)(ii). This conclusion is supported by NaturSource’s own description of the processing on its website, which states that the sunflower seeds and pumpkin seeds are “dry roasted.” See NaturSource, Salad Topper Smart Life, http://www.natursource.com/us/products/salad-toppers/ salad-topper-smart-life-2/(last visited July 16, 2018).
Also included in the scope of GN 12(s)(ii) are processing operations that are “incidental” to roasting. In previous decisions, CBP has clarified that, for purposes of Chapter 20, HTSUS, the term “incidental” indicates a process that may happen with or as a result of freezing, packing, or roasting, but is secondary to, or of lesser importance than, these processes. See Headquarters Ruling (“HQ”) H270451, dated January 4, 2017. In HQ H270451, CBP noted that “the addition of seasoning like salt, other flavors, spices, or other ingredients is, comparatively, a relatively simple process.” As a result, CBP held that mixing with seasoning is a type of lesser processing that qualifies as “incidental.” See id.
In this case, the process of adding tamari sauce while the sunflower seeds cool is a simple process that is analogous to adding flavors, salt, spices, or other ingredients. The addition of tamari sauce is therefore a process “incidental” to the roasting of the pumpkin seeds and sunflower seeds rather than an “additional cooking process,” as counsel contends.
Based on these facts, the Smart Life product is “prepared . . . by roasting, either dry or in oil (including processing incidental to freezing, packing, or roasting)” for purposes of GN 12(s)(ii).
Originates “Only if the Fresh Good Were Wholly Produced or Obtained Entirely in the Territory of One or More of the NAFTA Parties”
As the Smart Life product is a “fruit, nut [or] vegetable preparation of chapter 20” that was prepared by “roasting . . . (including processing incidental to . . . roasting),” it will qualify as originating under GN 12(s)(ii) only if “the fresh good were wholly produced or obtained entirely in the territory of one of more of the NAFTA parties.” The term “fresh good” refers to the state of the fruit, nut, or vegetable before freezing, packing, roasting, and incidental processing. See HQ H270451. Here, the “fresh goods” are the raw sunflower seeds, raw pumpkin seeds, and cranberries. While the cranberries were wholly obtained in one or more NAFTA parties (Canada and the United States), the Chinese-origin sunflower seeds and pumpkin seeds were not. As a result, the fresh good was not “wholly produced or obtained entirely in the territory of one or more of the NAFTA parties.”
HOLDING:
The Smart Life salad topper is a “fruit, nut [or] vegetable preparation of chapter 20” that was prepared by roasting (including incidental processes), and the fresh goods were not wholly obtained or produced in the territory of one or more NAFTA parties. In accordance with GN 12(s)(ii), the product therefore does not qualify as originating and is ineligible for preferential tariff treatment.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch