CLA-2-15:OT:RR:NC:N4:231
Ms. Rachelle Catellier
Hemp Oil Canada Inc.
PO Box 300
Ste. Agathe, Manitoba R0G 1Y0
Canada
RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA) of encapsulated hemp seed oil from Canada; Article 509
Dear Ms. Catellier:
In your letter dated October 29, 2015, you requested a ruling on the status of “Hemp Seed Oil Veggie Green Caps” from Canada under the NAFTA. In a telephone response to an informal inquiry by this office, you clarified certain information contained in various supporting documents accompanying your letter.
You have outlined a scenario in which your company will produce (in Canada) hemp seed oil by cold-pressing Canadian-grown hemp seeds via expeller press. The pure oil, in bulk, will then be shipped to the United States, where it will be encapsulated, without additives, into 1000-mg softgel capsules suitable for human consumption as dietary supplements. (The softgel capsule shells will be made in the United States from a combination of Malaysian-origin glycerin and U.S.-origin modified corn starch, carrageenan and water.) The oil-filled capsules will then be shipped back to your company in Canada, where they will be packaged and labeled for both bulk sale (e.g., containers of 4000 capsules) and private-label retail sale (e.g., bottles of 90 capsules). These finished bulk and retail units will then be imported into the United States. Your inquiry concerns various aspects of their status at that time.
The applicable tariff provision for the finished “Hemp Seed Oil Veggie Green Caps” will be 1515.90.8010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other fixed vegetable fats and oils (including jojoba oil) and their fractions, whether or not refined, but not chemically modified: other: other: hemp oil. The general rate of duty will be 3.2% 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 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)(iii). The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
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 merchandise may also be subject to regulations or requirements administered by the Drug Enforcement Administration (DEA). Inquiries may be directed to that agency at the following location:
Drug Enforcement Administration
8701 Morrissette Drive
Springfield, VA 22152
Telephone: (202) 307-1000
Website: www.dea.gov
With regard to country of origin and marking thereof, 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, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Pursuant to 19 CFR Section 134.1(b), the country of origin is the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to a foreign article in the United States must effect a substantial transformation in order to render the final product a good of the U.S. However, for a good of a NAFTA country, the NAFTA Marking Rules (set forth in 19 CFR Part 102) will determine the country of origin. The NAFTA rules will govern in the current scenario.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the finished, packaged hemp oil capsules are goods of Canada for marking purposes. Your proposed “bulk label” and “private label,” which are printed with the phrase “Product of Canada,” are acceptable in that regard.
You have advised that in some instances the imported bulk units will be broken down and repackaged in the United States following importation. Please note that in such instances the certification procedures set forth in 19 CFR 134.25/134.26 should be followed to ensure that ultimate purchasers of the repacked goods are made aware of the fact that the country of origin is Canada.
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 the email address [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division