CLA-2-08:OT:RR:NC:N2:228
Ms. Sara Gradilla
Richard L. Jones Customhouse Brokers, Inc.
P.O. Box 7350
San Luis, AZ 85349
RE: The tariff classification, country of origin, and status under the North American Free Trade Agreement (NAFTA) of fresh pitted dates from Mexico; Article 509
Dear Ms. Gradilla:
In your letter dated August 7, 2014, on behalf of Global Agricultural Products you requested a ruling on classification, country of origin, and the status of fresh pitted dates from Mexico under the NAFTA.
You state that U.S. grown Medjool fresh dates would be exported to Mexico for processing, such as cleaning, washing, sorting, removing the pits, and packing in retail and bulk containers. The pitted dates would then be imported back into the United States. We presume that for the purposes of this ruling the pitted dates are whole and are not chopped, sliced, shredded, etc.
The applicable tariff provision for the fresh pitted dates, when packed in units weighing (with the immediate container, if any) not more than 4.6 kg, will be 0804.10.2000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for dates ... fresh or dried ... dates ... whole, with or without pits ... packed in units weighing (with the immediate container, if any) not more than 4.6 kg. The general rate of duty will be 13.2 cents per kilogram. When packed in units weighing (with the immediate container, if any) more than 4.6 kg, the applicable tariff provision for the product will be 0804.10.6000, which provides for dates ... fresh or dried ... dates ... whole, with or without pits ... other ... with pits removed. The general rate of duty will be 2.8 cents per kilogram.
In your letter, you asked whether the operations performed in Mexico constituted an alteration under subheading 9802.00.50 of the HTSUS.
Subheading 9802.00.50, HTSUS, provides a full or partial duty exemption for articles exported from and returned to the United States after having been advanced in value or improved in condition abroad by repairs or alterations, provided the documentary requirements of section 181.64 (for articles returned from Canada or Mexico) or section 10.8 (for articles returned from any other country), CBP Regulations (19 C.F.R. § 181.64 and 10.8), are satisfied.
Section 181.64(a), CBP Regulations (19 C.F.R. § 181.64(a)) defines "repairs or alterations" for purposes of NAFTA as follows:
“Repairs or alterations” means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new and commercially different good from, the good exported from the United States.
The application of this tariff provision is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff’d C.D. 1752, 36 Cust. Ct. 46 (1956), and Guardian Industries Corp. v. United States, 3 CIT 9 (1982). The partial duty exemption provided by subheading 9802.00.50, HTSUS, is also precluded where the exported articles are incomplete for their intended use and the foreign operation constitutes an intermediate processing operation, which is performed as a matter of course in the preparation or the manufacture of finished articles. See Dolliff & Co. v. United States, 81 Cust. Ct. 1, C.D. 4755, 455 F. Supp. 618 (1978), aff’d, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015, 1019 (1979).
Based upon the information provided, the proposed Mexican processing of U.S.-origin fresh dates does not constitute an "alteration" as that term is defined under section 181.64 (a), CBP Regulations (19 C.F.R. § 181.64(a)). It is our opinion that pitting the dates abroad created a necessary finishing step in the manufacture of the finished article (pitted dates), which resulted in a commercially different article than that exported from the U.S. Therefore, the returned product would be precluded from preferential treatment under subheading 9802.00.50 of the HTSUS.
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 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; . . . .
Based on the facts provided, the product described above qualifies for NAFTA preferential treatment because it meets the requirement of HTSUS General Note 12(b)(i). The good will therefore be entitled to a free rate of duty under the NAFTA 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, CBP Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304.
The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate CBP Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, CBP Regulations. The marking requirements of these goods are set forth in Part 134, CBP Regulations.
Section 134.1(b) of the regulations, defines "country of origin" as:
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this Part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.
Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the country of origin of the fresh pitted dates for marking purposes is the United States. The country of origin for Customs duty purposes will be Mexico.
Products of the United States are not subject to the country of origin marking requirements of 19 U.S.C. 1304. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you direct any questions on this issue to the FTC.
This ruling is being issued under the provisions of Part 181 of the CBP 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 Bruce N. Hadley, Jr. at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division