CLA-2-03:OT:RR:NC:2:231
Ms. Louise Chevanelle
Formation Douane Louise Chevanelle Inc.
490 Providence, Granby, QC
Granby J2H 2H6
Canada
RE: The tariff classification, country of origin, marking, and status under the North American Free Trade Agreement (NAFTA), of U.S.-origin lobster that have been processed in Canada; Article 509
Dear Ms. Chevanelle: In your letter dated November 3, 2010, you requested a ruling on the NAFTA status of Frozen Lobster Tails imported from Canada on behalf of La Renaissance (Quebec, Canada). You indicate that live lobster (Homarus americanus) which is grown and harvested in the United States will be initially shipped to Canada where it will be processed in the following ways: the lobster tails are separated from the whole lobster before it is sized, cleaned and soaked in water for a few hours. The product is subsequently graded, weighed and cut mechanically into a butterfly style. The lobster tails are frozen and placed in boxes that weigh either 10 pounds or 520 grams. The product is not in an airtight container or soaked in brine at completion of packaging. The Frozen Lobster Tails are palletized and returned to the United States.
The applicable tariff provision for the Frozen Lobster Tails will be 0306.12.0070, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Crustaceans, whether in shell or not, live, fresh, chilled, frozen, dried, salted or in brine; …: Frozen: Lobsters (Homarus spp.): Other: 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.
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 frozen lobster tails described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(i). For entry/duty purposes, the goods will therefore be entitled to preferential treatment under NAFTA upon compliance with all applicable laws, regulations, and agreements.
However, the NAFTA Preference Override provision set forth in § 102.19(b) of the Customs Regulations (19 CFR 102.19(b)), is applicable to the subject merchandise. Specifically, § 102.19(b) states:
“If, under any provision of this part, the country of origin of a good which is originating .... is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.”
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, Customs Regulations (19 CFR 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 Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs 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 imported frozen lobster tails are goods of the United States for marking purposes. (Note, however, that under the NAFTA Preference Override, 19 CFR 102.19(b), the country of origin for entry/duty purposes will be Canada.) For Customs and Border Protection purposes, the goods (not being “foreign” within the context of marking policy) are therefore not required to be marked with their country of origin.
Please note that the question of whether the goods may be marked with a phrase such as “Product of U.S.A.” is under the jurisdiction of the Federal Trade Commission, which may be contacted for advice at 1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006.
Also, for information about the possible impact of U.S. Department of Agriculture (USDA) country of origin labeling (COOL) regulations, you may contact the Agricultural Marketing Service of the USDA at 1400 Independence Ave., SW, Room 2607-S, Stop 0254, Washington, D.C. 20250.
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 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 Ekeng Manczuk at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division