OT:RR:CTF:FTM H335912 TSM
Sheri G. Lawson
Willson International Inc
160 Wales Avenue, Suite 100
Tonawanda, NY 14150
RE: Tariff Classification; Country of Origin Marking; USMCA Eligibility; Certain Potato
Preparation
Dear Ms. Lawson:
This letter is in response to your request, on behalf of InnoFoods Inc. (“Requestor” or “IFI”),
dated October 30, 2023, for a binding ruling regarding the tariff classification under the Harmonized
Tariff Schedule of the United States (“HTSUS”), country of origin marking, and eligibility for
preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”) of a
certain potato preparation.
FACTS:
The product at issue is Just Real Spuds (“JRS”), which is described as dried potato flakes
that are yellowish in color and somewhat coarse granular. JRS is said to contain agglomerated
potato flakes and sea salt of U.S. origin, and butter powder of Canadian origin. Approximately 27
percent of the product passes through a sieve with an aperture of 1.25 mm. Instructions on the
product label direct the consumer to boil water and unsalted butter, remove from heat, stir in the
potatoes, let it stand for one minute, and add milk while continuing to stir until the desired
consistency is achieved. JRS will be manufactured in Canada and is said to be prepared by
removing the materials from storage, weighing the raw ingredients following the recipe, mixing all
of the dry ingredients and ensuring they are blended thoroughly, depositing the mixed ingredients
into a holding container, and bulk packaging the product followed by transfer to storage at the
primary warehouse. Following the receiving, storage, and shipping program, JRS will be
packaged into retail pouches and packed into cartons, and subsequently imported in an ambient
condition into the United States.
ISSUES:
What is the tariff classification of the JRS product? What is the country of origin of the
JRS product for marking purposes? Is the JRS product eligible for preferential tariff treatment
under USMCA?
LAW AND ANALYSIS:
Tariff Classification
Classification under the HTSUS is determined in accordance with the General Rules of
Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined
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
headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be
applied in order.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized
Commodity Description and Coding System may be utilized. The ENs to the Harmonized
Commodity Description and Coding System represent the official interpretation of the tariff at the
international level. While neither legally binding nor dispositive, the ENs provide a commentary
on the scope of each heading of the HTSUS and are generally indicative of the proper
interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
0712 Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared
* * *
1105 Flour, meal, powder, flakes, granules and pellets of potatoes
* * *
2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen,
other than products of heading 2006
* * *
Note 3 to Chapter 7 provides as follows:
Heading 0712 covers all dried vegetables of the kinds falling in headings 0701 to 0711,
other than:
(a) Dried leguminous vegetables, shelled (heading 0713);
(b) Sweet corn in the forms specified in headings 1102 to 1104;
(c) Flour, meal, powder, flakes, granules and pellets of potatoes (heading 1105);
(d) Flour, meal and powder of the dried leguminous vegetables of heading 0713
(heading 1106).
* * *
Note 1 to Chapter 11 provides as follows:
This chapter does not cover:
(a) Roasted malt put up as coffee substitutes (heading 0901 or 2101);
(b) Prepared flours, groats, meals or starches of heading 1901;
(c) Corn flakes or other products of heading 1904;
(d) Vegetables, prepared or preserved, of heading 2001, 2004 or 2005;
(e) Pharmaceutical products (chapter 30); or
(f) Starches having the character of perfumery, cosmetic or toilet preparations
(chapter 33).
* * *
Note 1 to Chapter 20 provides as follows:
This chapter does not cover:
(a) Vegetables, fruit or nuts, prepared or preserved by the processes specified in
chapter 7, 8 or 11;
(b) Vegetable fats and oils (Chapter 15);
(c) Food preparations containing more than 20 percent by weight of sausage, meat,
meat offal, blood, insects, fish or crustaceans, molluscs or other aquatic
invertebrates, or any combination thereof (chapter 16);
(d) Bakers’ wares and other products of heading 1905; or
(e) Homogenized composite food preparations of heading 2104.
* * *
Note 3 to Chapter 20 provides as follows:
Heading 2001, 2004 and 2005 cover, as the case may be, only those products of
chapter 7 or of heading 1105 or 1106 (other than flour, meal and powder of the
products of chapter 8), which have been prepared or preserved by processes other
than those referred to in note 1(a).
* * *
EN 3 to Chapter 7 provides in relevant part:
Heading 07.12 covers all dried vegetables of the kinds falling in headings 07.01 to
07.11, other than:
(a) dried leguminous vegetables, shelled (heading 07.13);
(b) sweet corn in the forms specified in headings 11.02 to 11.04;
(c) flour, meal, powder, flakes, granules and pellets of potatoes (heading 11.05);
(d) flour, meal and powder of the dried leguminous vegetables of heading 07.13
(heading 11.06).
* * *
General EN to Chapter 7 provides in relevant part:
Vegetables not presented in a state covered by any heading of this Chapter are
classified in Chapter 11 or Section IV. For example, flour, meal and powder of dried
leguminous vegetables and flour, meal, powder, flakes, granules and pellets of
potatoes are classified in Chapter 11, and vegetables prepared or preserved by any
process not provided for in this Chapter fall in Chapter20.
* * *
EN 07.12 provides as follows:
This heading covers vegetables of headings 07.01 to 07.11 which have been dried
(including dehydrated, evaporated or freeze-dried) i.e., with their natural water
content removed by various processes. The principal kinds of vegetables treated in
this way are potatoes, onions, mushrooms, wood ears (Auricularia spp.), jelly fungi
(Tremella spp.), truffles, carrots, cabbage and spinach. They are usually prepared in
strips or slices, either of one variety or mixed (julienne).
The heading also covers dried vegetables, broken or powdered, such as asparagus,
cauliflower, parsley, chervil, onion, garlic, celery, generally used either as flavouring
materials or in the preparation of soups.
The heading excludes, inter alia:
(a) Dried leguminous vegetables, shelled (heading 07.13).
(b) Dried, crushed or ground fruits of the genus Capsicum or of the
genus Pimenta (heading 09.04), potato flour, meal, powder, flakes, granules and
pellets (heading 11.05), flour, meal and powder of the dried leguminous
vegetables of heading 07.13 (heading 11.06).
(c) Mixed condiments and mixed seasonings (heading 21.03).
(d) Soup preparations based on dried vegetables (heading 21.04).
* * *
EN 1 to Chapter 11 provides as follows:
This Chapter does not cover:
(a) Roasted malt put up as coffee substitutes (heading 09.01 or 21.01);
(b) Prepared flours, groats, meals or starches of heading 19.01;
(c) Corn flakes or other products of heading 19.04;
(d) Vegetables, prepared or preserved, of heading 20.01, 20.04 or 20.05;
(e) Pharmaceutical products (Chapter 30); or
(f) Starches having the character of perfumery, cosmetic or toilet preparations
(Chapter 33).
* * *
EN to heading 1105 provides as follows:
This heading applies to dried potatoes presented as flour, meal, powder, flakes,
granules or pellets. The flour, powder, flakes and granules of the heading may be
obtained by steam-cooking and mashing fresh potatoes and subsequent drying of the
resulting mash either to a flour, powder or granules or to thin sheets which are cut
into small flakes. The pellets of the heading are usually obtained by agglomeration
of flour, meal, powder or pieces of potato.
Products of this heading may be improved by the addition of very small amounts of
anti- oxidants, emulsifiers or vitamins.
However, the heading excludes products to which other substances have been added
so that they take on the characteristics of potato preparations.
The heading also excludes:
(a) Potatoes which have been simply dried, dehydrated or evaporated, without
further processing (heading 07.12).
(b) Potato starch (heading 11.08).
(c) Tapioca substitutes prepared from potato starch (heading 19.03).
* * *
EN 1 to Chapter 20 provides as follows:
This Chapter does not cover:
(a) Vegetables, fruit or nuts, prepared or preserved by the processes specified in
Chapter 7, 8 or 11;
(b) Vegetable fats and oils (Chapter 15);
(c) Food preparations containing more than 20 % by weight of sausage, meat, meat
offal, blood, insects, fish or crustaceans, molluscs or other aquatic invertebrates,
or any combination thereof (Chapter 16);
(d) Bakers’ wares and other products of heading 19.05; or
(e) Homogenised composite food preparations of heading 21.04.
* * *
General EN to Chapter 20 provides as follows:
This Chapter includes:
(1) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by
vinegar or acetic acid.
(2) Vegetables, fruit, nuts, fruit-peel and other parts of plants preserved by sugar.
(3) Jams, fruit jellies, marmalades, fruit or nut purées, fruit or nut pastes, obtained by
cooking.
(4) Homogenised prepared or preserved vegetables and fruit.
(5) Fruit or vegetable juices, neither fermented nor containing added alcohol, or of
an alcoholic strength by volume not exceeding 0.5 % vol.
(6) Vegetables, fruit, nuts and other edible parts of plants prepared or preserved by
other processes not provided for in Chapter 7, 8 or 11 or elsewhere in the
Nomenclature.
(7) Products of heading 07.14, 11.05 or 11.06 (other than flour, meal and powder of
the products of Chapter 8), which have been prepared or preserved by processes
other than those specified in Chapter 7 or 11.
(8) Fruit preserved by osmotic dehydration.
These products may be whole, in pieces or crushed.
The Chapter does not cover:
(a) Food preparations containing more than 20 % by weight of sausage, meat, meat
offal, blood, insects, fish or crustaceans, molluscs or other aquatic invertebrates,
or any combination thereof (Chapter 16).
(b) Products such as fruit tarts, prepared with pastry (heading 19.05).
(c) Soups and broths and preparations therefor and homogenised composite food
preparations of heading 21.04.
(d) Fruit or vegetable juices of an alcoholic strength by volume exceeding 0.5 % vol
(Chapter 22).
* * *
The JRS product at issue contains dried agglomerated potato flakes, butter powder, and sea
salt. Dried vegetables are classified in heading 0712, HTSUS, which provides for “Dried
vegetables, whole, cut, sliced, broken or in powder, but not further prepared.” However, consistent
with Note 3(c) to Chapter 7, HTSUS, EN 3(c) to Chapter 7, and General EN to Chapter 7, heading
0712, HTSUS, covers all dried vegetables of the kinds falling in headings 0701 to 0711, other
than, among others, flour, meal, powder, flakes, granules and pellets of potatoes, which are
classified in heading 1105, HTSUS. Because the product at issue contains dried agglomerated
potato flakes, it is excluded from classification in heading 0712, HTSUS.
Next we turn to heading 1105, HTSUS, which provides for “Flour, meal, powder, flakes,
granules and pellets of potatoes.” The subject JRS product contains butter powder and sea salt in
addition to dried agglomerated potato flakes. At issue is the effect of butter powder and sea salt on
the product’s eligibility for classification in heading 1105, HTSUS. In this regard, Note 1(d) to
Chapter 11, HTSUS, and EN 1(d) to Chapter 11, provide that this chapter does not cover
“Vegetables, prepared or preserved, of heading 2001, 2004 or 2005.” Moreover, EN 11.05 further
provides, in relevant part, that this heading applies to dried potatoes presented as flour, meal,
powder, flakes, granules or pellets, which may be improved by the addition of very small amounts
of anti-oxidants, emulsifiers or vitamins, but products to which other substances have been added,
so that they take on the characteristics of potato preparations, are excluded from this heading.
Upon review, we find that butter powder and sea salt are not “anti-oxidants, emulsifiers or
vitamins” as described in EN 11.05. Instead, they are “other substances” that transform the
agglomerated potato flakes into potato preparations. Therefore, we conclude that the JRS product
is not classified in heading 1105, HTSUS. See HQ 952788, dated January 14, 1993 (finding that a
dried dehydrated potato product containing substances such as corn starch, guar gum, salt, artificial
beef flavor, and onion powder, in addition to small amounts of anti-oxidants, emulsifiers or
vitamins, is a potato preparation excluded from classification in heading 1105, HTSUS).
Heading 2005, HTSUS, provides for “Other vegetables prepared or preserved otherwise
than by vinegar or acetic acid, not frozen, other than products of heading 2006.” Consistent with
Notes 1 and 3 to Chapter 20, HTSUS, as well as EN 1 and General EN to Chapter 20, heading
2005 covers only those products of heading 1105 that have been prepared or preserved by the
processes other than those specified in Chapter 11. As discussed above, the dry agglomerated
potato product at issue is excluded from classification in heading 1105, HTSUS, because it
contains sea salt and butter powder. As such, it is a potato preparation provided for in heading
2005, HTSUS, and specifically in subheading 2005.20.00, HTSUS, which provides for “Other
vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than
products of heading 2006: Potatoes.”
Country of Origin Marking
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 to the ultimate purchaser in
the U.S. the English name of the country of origin of the article. By enacting 19 U.S.C. § 1304,
Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the
marking on the imported goods the country of which the goods are the product. “The evident
purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by
knowing where the goods were produced, be able to buy or refuse to buy them, if such marking
should influence his will.” See United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D.
104 (1940).
Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. §
134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304.
Title 19, § 134.1(b) defines “country of origin” as “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 [the marking laws and regulations].”
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate
quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR
35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin
for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11
provides a required hierarchy for determining the country of origin of a good for marking
purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. §
102.21. See 19 C.F.R. § 102.11. Applied in sequential order, 19 C.F.R. Part 102.11(a) provides
that the country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in
tariff classification set out in Part 102.20 and satisfies any other applicable
requirements of that section, and all other applicable requirements of these rules are
satisfied.
“Domestic material” is defined in Section 102.1(d), as “a material whose country of origin
as determined under these rules is the same country as the country in which the good is produced.”
“Foreign material” is defined in Section 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.”
Because the JRS potato flakes product at issue is comprised of U.S. and Canadian
components, it is not wholly obtained or produced in a single country within the meaning of
Section 102.11(a)(1). Moreover, because the JRS product is manufactured in Canada from both
U.S. and Canadian components, it is also not produced exclusively from “domestic materials,” as
defined in Section 102.1(d), within the meaning of Section 102.11(a)(2). Therefore, we look to
section 102.11(a)(3), which provides that the country of origin is the country in which “each
foreign material incorporated in that good undergoes an applicable change in tariff classification as
set forth in 19 C.F.R. § 102.20 and satisfies any other applicable requirements of that section.”
Each foreign material must be separately analyzed under 19 C.F.R. § 102.11(a)(3).
The tariff shift requirement in Part 102.20 for headings 2001-2007, HTSUS, states: “A
change to heading 2001 through 2007 from any other chapter.” Consistent with the referenced
Section 102.1(e) definition, the foreign materials contained in the JRS product are potato granules
and sea salt of U.S. origin, which are classified, respectively, in headings 1105, HTSUS, and 2501,
HTSUS. As determined above, the product at issue is classified in heading 2005. Accordingly,
the tariff shift requirement is met. Therefore, in accordance with 19 C.F.R. § 102.11(a)(3), the
country of origin of the JRS dried agglomerated potato product for marking purposes is Canada.
Eligibility for Preferential Tariff Treatment under USMCA
The United States-Mexico-Canada Agreement (“USMCA”) was signed by the
Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was
approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA
Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note
(“GN”) 11 of the HTSUS implements the USMCA.
GN 11(a) provides as follows:
(i) Goods that originate in the territory of Mexico, Canada or the United States
(hereinafter referred to as “USMCA country” or “USMCA countries” as further
defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of
this note and regulations issued by the Secretary of the Treasury (including
Uniform Regulations provided for in the USMCA), and goods enumerated in
subdivision (p) of this note, when such goods are imported into the customs
territory of the United States and are entered under a subheading for which a rate of
duty appears in the “Special” subcolumn, followed by the symbol “S” in
parentheses, are eligible for such duty rate, in accordance with section 202 of the
United States-Mexico-Canada Agreement Implementation Act; and
(ii) Goods that originate in the territory of a USMCA country under the terms of
subdivision (b) of this note and regulations issued by the Secretary of the
Treasury, when such goods are imported into the customs territory of the United
States and are entered under a subheading for which a rate of duty appears in the
“Special” subcolumn, followed by the symbol “S+” in parentheses, or under a
subheading whose article description provides for originating goods of one or
more USMCA countries, as the case may be, are eligible for such duty rate, in
accordance with section 202 of the United States-Mexico-Canada Agreement
Implementation Act.
GN 11(b) sets forth the criteria for determining whether a good is an originating good for
purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United
States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible
for the preferential tariff treatment provided for in the applicable subheading and quantitative
limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA
country” only if—
(i) the good is a good wholly obtained or produced entirely in the territory of one or
more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA
countries, exclusively from originating materials;
(iii) the good is a good produced entirely in the territory of one or more USMCA
countries using non-originating materials, if the good satisfies all applicable
requirements set forth in this note (including the provisions of subdivision (o)); or
* * *
GN11(l)(iv)(2) defines the term “Good wholly obtained or produced entirely in the territory
of one or more USMCA countries,” in relevant part, as follows:
The term ‘good wholly obtained or produced entirely in the territory of one or more
USMCA countries’ means any of the following:
(1) a mineral good or other naturally occurring substance extracted or taken from
the territory of one or more USMCA countries;
(2) a plant, plant good, vegetable or fungus grown, cultivated, harvested, picked or
gathered in the territory of one or more USMCA countries;
* * *
(4) a good obtained in the territory of one or more USMCA countries from a live
animal;
* * *
(11) a good produced in the territory of one or more USMCA countries exclusively
from goods referred to in any of subparagraphs (1) through (10), inclusive, of this
subdivision, or from their derivatives, at any stage of production.
The JRS dried potato flakes product at issue is comprised of U.S. and Canadian
components, specifically the agglomerated potato and sea salt of U.S. origin, and butter powder of
Canadian origin. GN11 (a)(i), HTSUS, provides that goods that originate in the territory of
Mexico, Canada, or the United States, (“USMCA countries”), qualify for preferential duty
treatment under the USMCA. GN 11(b), HTSUS, further sets forth the criteria for determining
whether a good is an originating good for purposes of USMCA. In accordance with GN 11(b)(i),
HTSUS, the subject potato flakes product is considered as a “good originating in the territory of a
USMCA country” if it is “wholly obtained or produced” entirely in the territory of one or more
USMCA countries.
GN 11(l)(iv)(2), HTSUS, defines the term “[g]ood wholly obtained or produced entirely in
the territory of one or more USMCA countries” to mean, in relevant part, “a plant, plant good,
vegetable or fungus grown, cultivated, harvested, picked or gathered in the territory of one or more
USMCA countries.” The product at issue contains potato flakes of U.S. origin, classified prior to
the addition of sea salt and butter powder, in heading 1105, HTSUS, which falls within the scope
of Section II, Vegetable Products, HTSUS. Once combined with sea salt of U.S. origin and butter
powder of Canadian origin, the product at issue is classified in heading 2005, HTSUS, which
provides for “Other vegetables prepared or preserved…” As such, the subject potato flakes
product qualifies as a “[g]ood wholly obtained or produced entirely in the territory of one or more
USMCA countries” within the meaning of GN 11(l)(iv)(2), HTSUS. The term “[g]ood wholly
obtained or produced entirely in the territory of one or more USMCA countries” also includes “a
good produced in the territory of one or more USMCA countries exclusively from goods referred
to in any of subparagraphs (1) through (10), inclusive, of this subdivision, or from their
derivatives, at any stage of production.” See GN 11(1)(iv)(11), HTSUS. Because the product at
issue contains sea salt of U.S. origin - a mineral good referred to in subparagraph (1), butter
powder of Canadian origin - a derivative of milk, a good obtained from a live animal referred to in
subparagraph (4), and potato flakes of U.S. origin – a plant good, or vegetable referred to in
subparagraph (2), the potato flakes product at issue also qualifies as a “[g]ood wholly obtained or
produced entirely in the territory of one or more USMCA countries” within the meaning of GN
11(l)(iv)(11), HTSUS.
Based on the consideration of the aforementioned provisions, we find that the JRS dried
potato flakes product is “wholly obtained or produced” entirely in the territory of one or more
USMCA countries. Therefore, the product is eligible for preferential tariff treatment under the
USMCA.
HOLDING:
By application of GRIs 1 and 6, we find that the JRS dried agglomerated potato product is
classified in heading 2005, HTSUS, and specifically in subheading 2005.20.00, HTSUS, which
provides for “Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not
frozen, other than products of heading 2006: Potatoes.” The column one, general rate of duty for
merchandise of this subheading is 6/4% ad valorem.
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 internet at
https://hts.usitc.gov/.
The country of origin of the JRS dried agglomerated potato flakes product is Canada.
Moreover, based on the information provided, the JRS product is eligible for preferential tariff
treatment under the USMCA.
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 [CBP] 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,
Sarah Kafka, Chief
Food, Textiles, and Marking Branch