CLA-2-19:OT:RR:NC:N2:231
Ms. Lisa Miller
Concept Gourmet du Village ULC
539 Chemin du Village
Morin-Heights, QC J0R 1H0
Canada
RE: The tariff classification, country of origin, marking and status under the North American Free Trade Agreement (NAFTA) of Chocolate Cake Mix from Canada, Article 509
Dear Ms. Miller:
In your letter dated June 14, 2019, you requested a tariff classification ruling.
The subject merchandise is “Chocolate Cake in a Mug” composed of icing sugar, enriched wheat flour, cocoa powder, salt, canola oil, natural flavor and baking soda. You state that your supplier combines and packs the above-described raw materials into 200-gram pouches. The pouches are shipped to your company where they are inserted into a cardboard box, and packed six boxes to each master carton for exportation to the United States. The ultimate purchaser is directed to mix the contents of the pouch along with other recommended ingredients into a 10-ounce mug, which is not supplied and baked in a microwave.
The applicable subheading for the “Chocolate Cake in a Mug”, if imported in quantities that fall within the limits described in additional U.S. note 3 to chapter 19, will be 1901.20.6500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations of flour…not containing cocoa or containing less than 40 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included: Mixes and doughs for the preparation of bakers’ wares of heading 1905: Other: Other: Mixes and doughs described in additional U.S. note 1 to chapter 19: Described in additional U.S. note 3 to this chapter and entered pursuant to its provisions. The general rate of duty will be 10 percent ad valorem.
If the quantitative limits of additional U.S. note 3 to chapter 19 have been reached, the “Chocolate Cake in a Mug” will be classified in subheading 1901.20.7000, HTSUS, and dutiable at the general rate of 42.3 cents per kilogram plus 8.5 percent ad valorem. In addition, products classified in subheading 1901.20.7000, HTSUS, will be subject to additional duties based on their value, as described in subheadings 9904.19.11 - 9904.19.19, 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 https://hts.usitc.gov/current.
Trade Agreement - NAFTA
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 subheading 1901.20, GN 12/19.4 requires:
A change to subheading 1901.20 from any other chapter.
The non-originating materials are identified from the following countries and classified as follows:
Icing Sugar – 1701, HTSUS. The article is produced from a combination of sugars from Australia, Brazil, Belize, Colombia, Costa Rica, El Salvador, Guatemala, Guyana, Honduras, Mexico and Nicaragua
Cocoa Powder – 1805, HTSUS. The article is produced from cocoa, from France, Germany, Ivory Coast, Malaysia, Netherlands, Nicaragua, Singapore and South Africa
Based on the facts provided, the “Chocolate Cake in a Mug”, described above, qualifies for NAFTA preferential treatment because it will meet the requirements of HTSUS General Note 12(b)(ii)(A) and 12(t)/19.4, as each of the non-originating materials, the Icing Sugar and Cocoa Powder, undergoes an applicable change in tariff classification. 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
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 “Chocolate Cake in a Mug” is manufactured from materials originating in Canada, United States and various other countries 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 “Chocolate Cake in a Mug” is classified in subheading 1901.20, HTS, the applicable tariff shift rule found in section 102.20(a) requires:
A change to subheading 1901.20 from any other subheading.
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 do undergo the applicable shift in tariff classification. We find that “Chocolate Cake in a Mug” is a good of Canada for both marking and origin purposes.
Marking
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. As previously stated, 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.
Based on the information above, the country of origin is determined to be Canada. The cardboard boxes containing the product at issue should be marked accordingly.
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 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