CLA-2-18:OT:RR:NC:N2:232
Daniel J. Gluck
Simon Gluck & Kane LLP
535 Fifth Avenue, 4th Floor
New York, NY 10017-8020
RE: The tariff classification, country of origin marking, and status under the United States-Singapore Free Trade Agreement (SFTA) of a chocolate preparation from Singapore
Dear Mr. Gluck:
In your letter dated August 2, 2017, on behalf of your client, Asian Blending Industrial, you requested a ruling on the tariff classification and status of a chocolate preparation from Singapore under the SFTA. You provided a sample that will be retained for future reference.
Ingredients breakdowns and a description of the manufacturing process were submitted with your letter. The subject merchandise is a chocolate preparation which consists of all non SFTA origin ingredients: 75 percent refined cane sugar (Australia) (Heading 1701), 20 percent skim milk powder (New Zealand) (Heading 0402), and 5 percent chocolate powder (Indonesia) (Heading 1805).
The chocolate preparation will be manufactured in Singapore by testing, passing through sieves and blending the ingredients to the final required composition as indicated above. The product will be imported into the United States in heat sealed dairy standard 25 kg Kraft bags with polyethylene inner liners. The product will be used as a refined ingredient in the production of chocolate confectionery
The applicable subheading for the chocolate preparation will be 1806.20.7300, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Chocolate and other food preparations containing cocoa: Other preparations in blocks, slabs or bars, weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: Other: Containing more than 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17: Other. The general rate of duty will be Free.
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 https://hts.usitc.gov/current.
In your submission you request a determination on the eligibility of the chocolate preparation to qualify for preferential treatment under the United States-Singapore Free Trade Agreement (SFTA).
General Note 25, HTSUS, sets forth the criteria for determining whether a good is originating under the SFTA. General Note 25(b) indicates that, for the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, goods imported into the customs territory of the United States are eligible for treatment as originating goods of a SFTA country under the terms of this note only if they-
were wholly obtained or produced entirely in the territory of Singapore or the United States, or both;
are goods that, in their condition as imported, are enumerated in subdivision (m) of this note and imported from the territory of Singapore; or
have been transformed in the territory of Singapore or of the United States, or both, so that each nonoriginating material:
undergoes an applicable change in tariff classification set out in subdivision (o) of this note as a result of production occurring entirely in the territory of Singapore or of the United States or both; or
if no change in tariff classification is required, the good otherwise satisfies the applicable requirements set forth in such subdivision (o).
Based on the information provided, the chocolate preparation is manufactured in Singapore from nonoriginating ingredients. For goods classified in heading 1806, General Note 25(o) indicates that a change to subheading 1806.20 from any other heading is required. The nonoriginating ingredients of the chocolate preparation (refined cane sugar, skim milk powder and cocoa powder) all meet the requisite tariff shift requirement.
Taking the above facts into account, the chocolate preparation qualifies for SFTA preferential treatment as the products meet the requirements of HTSUS General Note 25(b)(iii)(a), subdivision (o) 18.3. The goods will therefore be entitled to a free rate of duty under the SFTA upon compliance with all applicable laws, regulations, and agreements.
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. Part 134, U.S. Customs and Border Protection Regulations (19 C.F.R. §134) implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304.
Part 134.1(b) of the regulations (19 C.F.R. § 134.1(b)), defines "country of origin" as:
[T]he 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…
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
In this case, the mixture of ingredients results in a substantial transformation. The ingredients lost their separate identities and became an integral part of a new product. The country of origin of the chocolate preparation is Singapore.
This merchandise is subject to The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling FDA at 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
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 Frank Troise at frank.l.troise.cbp.dhs.gov.
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division