CLA-2-23:OT:RR:NC:N2:231
Ms. Rachelle Catellier
Fresh Hemp Foods Ltd
69 Eagle Drive
Winnipeg, MB R2R 1V4
Canada
RE: The tariff classification, country of origin, marking and status under the North American Free Trade Agreement (NAFTA) of HempBev 65 from Canada, Article 509
Dear Ms. Catellier:
In your letter dated November 16, 2018, you requested a tariff classification ruling.
The subject merchandise is HempBev 65. HempBev 65 is described as a light tan to greenish fine powder with a nutty flavor and aroma. This product is said to be a highly dispersible hemp protein designed for ready-to-drink powdered beverage applications. It is composed of hemp protein concentrate (>99.9 percent) and Cytoguard® OX-WS (0.05-0.1 percent). The latter product is said to be a natural water soluble antioxidant extracted from the Origanum Vulgare plant. It serves to maintain the freshness of the product. According to the manufacturing process and a subsequent telephone conversation, you state that at your facilities, Fresh Hemp Foods Ltd, the hemp seed (Canada) is cleaned twice to remove debris, weed seeds, other crop seeds and foreign materials. The seeds are cold pressed mechanically to extract oil. The defatted hemp seed cake is extracted from the presses, milled and sifted to produce powders of varying particle size and grades of protein. The ensuing product, which is labeled Hemp Protein Powder 50%, is sent to the company GFR Ingredients for further processing to make the product water-soluble. At GFR Ingredients, the product undergoes a decanting process and an aqueous extraction is added to the powder, followed by pH adjustment and the removal of solid materials. You state that potable water (Canada), food grade potassium hydroxide (USA), citric acid and phosphoric acid are used during the aqueous extraction of hemp protein powder in order to produce the Hemp Protein Concentrate. Upon the addition of the Cytoguard® OX-WS oregano extract to the aqueous extract, the product is spray dried. The spray dried solubilized hemp protein concentrate powder now termed HempPro-70 is sent to the company Zumbro River Bran, Inc. in the United States. In the United States, HempPro-70 is mixed, sifted, post blended, sprayed with compressed air, agglomerated with impelled air, sorted for magnets, sifted, sorted for metal fragments and packaged. The packaged product is returned to Canada and subsequently imported into the United States in 50-pound multi-wall polyethylene lined bags.
The applicable subheading for the HempBev 65 will be 2306.90.0130, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Oilcake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable fats or oils, other than those of heading 2304 or 2305: Other: of hemp seeds.” The rate of duty will be 0.32 cents 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 the World Wide Web at https://hts.usitc.gov/current.
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 administered by the agencies listed below. It is suggested that you contact them for further information.
U.S. Drug Enforcement Administration (DEA)
2401 Jefferson Davis Highway
Alexandria, VA 22301
Telephone: (800) 882-9539
U.S. Department of Agriculture
APHIS
Plant Protection and Quarantine Permit Unit
4700 River Road, Unit 136
Riverdale, MD 20737-1236
Telephone: (877) 770-5990
Email Address: [email protected]
U.S. Food and Drug Administration (FDA)
Division of Import Operations and Policy
12420 Parklawn Drive (Room 3109)
Rockville, MD 20857
Telephone: (301) 796-0356
Email address: [email protected]
As for your request regarding the item’s status under the North American Free Trade Agreement,
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
For items classified in heading 2306, GN 12/23.1 requires:
A change to headings 2301 through 2308 from any other chapter.
The non-originating materials are identified from the following countries and classified as follows:
Cytoguard® OX-WS (Oregano extract) – 1302 (China)
Citric Acid – 2918 (China)
Phosphoric Acid – 2809 (China)
Based on the facts provided, the HempBev 65, described above qualifies for NAFTA preferential treatment because it will meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
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.
"Foreign material" is defined in 19 CFR 102.1(e) as a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced. Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the HempBev 65 is manufactured from materials originating in Canada, United States and China and therefore is neither wholly obtained or produced, nor produced exclusively from domestic materials. Since an analysis of sections 102.11(a) (1) and 102.11(a) (2) will not yield a country of origin determination, we look to section 102.11(a) (3).
Section 102.11(a)(3) provides that the country of origin is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 CFR 102.20. Since we have determined that HempBev 65 is classified in heading 2306, HTS, the applicable tariff shift rule found in section 102.20(a) requires:
A change to headings 2301 through 2308 from any other chapter.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the non-originating materials does undergo the applicable shift in tariff classification. Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that HempBev 65 is a good of Canada for marking purposes. 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 134.45(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.” 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.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
The label representation you submitted with your ruling submission that is printed with the phrase “Product of Canada” is deemed acceptable.
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 Ekeng Manczuk at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division