CLA-2-22:OT:RR:NC:2:235
Mr. Steven Becker
Becker Law Firm PLLC
600 Third Avenue
New York, NY 10016
RE: RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of bulk, over-proof undenatured ethyl alcohol from Canada;
Dear Mr. Becker:
In your letter dated January 04, 2013 you requested a tariff classification ruling on behalf of Brown-Forman Corporation.
In your request letter you indicated that:
The prospective imports will consist of bulk, overproof undenatured hydrous ethyl alcohol distilled in Canada from a fermented mash of U.S. and/or Canadian grown corn and from which most of the secondary constituents, or congeners (i.e., higher alcohols, esters, aldehydes, acids, etc.), will be removed. The imported merchandise will be approximately 95% alcohol by volume (ABV) and, in its condition as imported, fit for human consumption. After importation, the prospective imports will be used in the production of alcohol beverages.
Hydrous (or wet) ethanol is the most concentrated grade of ethanol that can be produced by simple distillation, without the further dehydration step necessary to produce anhydrous (or dry) ethanol. Hydrous ethanol (also sometimes known as azeotropic ethanol) typically ranges from 186 proof (93% ethanol, 7% water) to 192 proof (96% ethanol, 4% water).
In your letter you suggest that the instant product should be classified “as a “spirit” under heading 2208.90.75, HTSUS”. We disagree with that assessment.
You correctly state that: “Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher” is provided for under heading 2207, HTSUS, whereas “Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.” is classifiable in heading 2208, HTSUS.
However, the instant product does not meet any of the established definitions of spirit which are classifiable in Heading 2208. In addition the instant product which you correctly indicate is:
“Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher” is provided for under heading 2207, HTSUS.
It is not as you later state “Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.” … classifiable in heading 2208, HTSUS.
The instant product is an undenatured hydrous ethyl alcohol, distilled in Canada from a fermented mash of U.S. and/or Canadian grown corn. The alcohol has, as stated in your letter, had “most of the secondary constituents, or congeners (i.e., higher alcohols, esters, aldehydes, acids, etc.),” removed. The imported merchandise will be approximately 95% alcohol by volume (ABV) in its condition as imported.
The applicable subheading for the bulk, over-proof undenatured ethyl alcohol will be 2207.10.3000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher; ethyl alcohol and other spirits, denatured, of any strength: 2207.10 Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher: For beverage purposes. The rate of duty will be 18.9¢/pf.liter .
In addition imports under this subheading may be subject to Federal Excise Tax (26 U.S.C. 5001, 26 U.S.C. 5041 or 26 U.S.C. 5051).
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 World Wide Web at http://www.usitc.gov/tata/hts/.
You also indicate in your request letter, that you believe the instant merchandise will be eligible for preferential Tariff Treatment under the NAFTA.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if--
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--
(A) 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, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12 (t).
Specifically the prospective import will need to meet the Tariff Shift note in Section 12 (t) of NAFTA to Chapter 22 (Note 7) which indicates the need for:
A change to headings 2203 through 2207 from any other heading, except from tariff items 2106.90.12, 2106.90.15 or 2106.90.18 or headings 2208 through 2209.
You have not provided specific information on the exact nature of the condition of the source “Corn Mash”. Providing it is not classifiable in the noted exceptions above, the goods will be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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 Paul Hodgkiss at (646) 733-3046.
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 and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division