CLA-2-21:OT:RR:NC:N2:228
Mr. Jose Eloy Cantu
Laredo CHB
505 Union Pacific Blvd
Laredo, TX 78045
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) for organic ghee and sunflower oil non-stick cooking spray from Mexico
Dear Mr. Cantu:
In your letter dated September 20, 2019, you requested the tariff classification and status of the organic ghee and sunflower oil non-stick cooking spray from Mexico under the NAFTA on behalf of your client, Maeva USA, Inc.
An ingredients breakdown and the manufacturing process were provided with your inquiry. You describe the product as containing approximately 60 percent organic ghee oil from India and 40 percent sunflower oil from the United States. The product will be packaged in cans each 7 ounces, net weight. You state in your inquiry that the materials are imported into Mexico, where the manufacturing takes place to produce the cooking spray prior to its importation into the United States.
The applicable subheading for the product will be 2106.90.9898, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included . . . other . . . other . . . other . . . other . . . other . . . other. The general rate of duty will be 6.4 percent 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 the 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 North American Free Trade Agreement (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 the non-originating material, organic ghee oil from India, meets the tariff shift requirements of HTSUS General Note 12(b)(ii)(A) and 12(t)/21.14, “A change to heading 2106 from any other chapter.” The country of origin for Customs duty purposes will be Mexico. The product 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
Except as hereinafter provided, every article of foreign origin (or its container, as provided in subsection (b) hereof) imported into the United States 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 an ultimate purchaser in the United States 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.
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 country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the 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, 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 United States. 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 the meaning of 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 organic ghee and sunflower oil non-stick cooking spray for marking purposes is Mexico. That is, based on the facts provided, the rule of origin that applies is 19 Code of Federal Regulations 102.11 (a) (3) that states:
the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in §102.20, and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. The §102.20 rule for Chapter 21, HTSUS, subheading 2106.90, requires “A change to a good of subheading 2106.90, other than to compound alcoholic preparations, from any other subheading, except from Chapter 4, Chapter 17, heading 2009, subheading 1901.90 or subheading 2202.90.” The foreign ingredient, 60 percent organic ghee oil from India, included in the non-stick cooking spray of subheading 2106.90, HTSUS, undergoes a change in tariff classification, therefore, the product for marking purposes is Mexico, and may be marked “product of”, or “made in” Mexico.
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 ww.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 Bruce N. Hadley, Jr. at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division