CLA-2-04:OT:RR:NC:N2:231
Mr. Joseph F. Walter
Livingston International Trade Services, Inc.
670 Young Street
Tonawanda, NY 14150
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of shredded, processed cheese from Canada; Article 509
Dear Mr. Walter:
In your letter dated October 22, 2012 you requested a ruling on the status of “Old English Style Restricted Melt Processed Cheese Food with Natural Cheese Flavor” from Canada under the NAFTA. Your request was submitted on behalf of Gay Lea Foods Cooperative Limited (Mississauga, ON, Canada).
The ingredients of the product and their respective countries of origin are as follows: Cheddar cheese (80-82%) (USA), natural cheese flavor (described as “enzyme modified cheese”) (10-11%) (USA), skim milk cheese (2-3%) (Canada), sodium phosphate (Germany/USA), whey powder (Canada), lactic acid (China), salt (Canada), cellulose (USA), sorbic acid (China), and color (Taiwan). The manufacturing process, which takes place in Canada, is as follows:
The above-listed ingredients (except the cellulose) are weighed and added to the processing kettle where they are mixed and heated to a maximum temperature of 86°C and held at that temperature for less than one minute, after which the temperature is reduced. This heating process melts all of the ingredients into a homogeneous “plastic” mass.
The processed cheese is poured into plastic-lined stainless steel hoops and placed in a cooler.
After cooling, the blocks of processed cheese are sealed.
The blocks of cheese are opened and placed into a cutting machine where they are cut into smaller blocks.
The small blocks of cheese are conveyed to a shredding machine which produces shreds of cheese ranging from ½ inch to 2 inches in length. (The customer requires a distinctly visible shred in the end product, and these lengths meet that requirement.)
Cellulose powder is added (for anti-caking purposes) and thoroughly mixed with the shredded cheese.
The finished product is packaged in plastic bags and boxed for shipment.
The moisture content of the finished product is on average 42.5%, with a maximum of 46%. The fat content is on average 26%, with a maximum of 33%. The pH is on average 5.5, with a maximum of 5.6.
If entered under quota, the applicable tariff provision for the above-described shredded cheese product will be 0406.30.6500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for cheese and curd: processed (process) cheese, not grated or powdered: other, including mixtures of the above: other: containing, or processed from, Cheddar cheese: described in additional U.S. note 18 to chapter 4 and entered pursuant to its provisions. The general rate of duty will be 10 percent ad valorem.
Imports under subheading 0406.30.6500, HTSUS, require an import license, in accordance with terms and conditions provided in regulations issued by the Secretary of Agriculture, subject to the approval of the United States Trade Representative (USTR). The regulations may provide for the reallocation among supplying countries or areas of unfilled quantities, subject to USTR approval.
Questions regarding licensing procedures and applications for licenses to import cheese subject to quota should be addressed to:
Import Quota Manager for Dairy Products
U.S. Department of Agriculture
Stop 1029
1400 Independence Avenue, SW
Washington, DC 20250-1029
Tel: (202) 720-1344
If entered outside the quota (i.e., without an import license), the applicable tariff provision for the product will be 0406.30.6700, HTSUS, which provides for cheese and curd: processed (process) cheese, not grated or powdered: other, including mixtures of the above: other: containing, or processed from, Cheddar cheese: other. The general rate of duty will be $1.227 per kilogram.
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/.
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 …
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(b)(ii)(A). When properly entered under subheading 0406.30.6500, HTSUS, the goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. However, since subheading 0406.30.6700, HTSUS, does not carry a special NAFTA duty rate for Canada, the “general” rate will apply when the goods are entered under that number.
Importations of this merchandise are subject to regulations administered by various U.S. agencies. Requests for information regarding applicable regulations may be addressed to the following:
U.S. Department of Agriculture (USDA)
APHIS, VS, NCIE
Products Program
4700 River Road, Unit 40
Riverdale, MD 20737-1231
Tel: (301) 734-3277
Website: www.aphis.usda.gov
Food and Drug Administration (FDA)
10903 New Hampshire Ave.
Silver Spring, MD 20993
Tel.: (888) 463-6332
This merchandise is also 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 the 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 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 Nathan Rosenstein at (646) 733-3030.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division