CLA-2-03:OT:RR:NC:N2:231
Mr. Louis DeMarco
Edward J Zarach & Associates
20 W. Lincoln Avenue
Suite No. 203
Valley Stream, NY 11580
RE: The tariff classification, country of origin, marking and status under the United States Mexico Canada Trade Agreement (USMCA), of U.S.-origin lobsters that have been processed in Canada.
Dear Mr. DeMarco:
In your letter dated November 4, 2020, you requested tariff classification, country of origin, marking and the applicability of USMCA to frozen lobster tails on behalf of your client, Harbor Seafood Inc. (New Hyde Park, NY).
You have outlined a scenario in which live lobsters, grown and harvested in U.S. waters, will be shipped from the United States to Canada. In Canada, the following processing steps will occur:
a) Lobster tail is removed from live lobster using a knife.
b) Tails are placed in fresh ice water for a few hours.
c) Tails are graded according to size (weight).
d) Tails are then packed in 10-lb trays and frozen.
e) Once tails are frozen, they are placed into a cardboard box.
f) Product is then placed into a master case 1 x 10 lb.
g) Product is labeled “Frozen Raw Lobster Tails.”
h) The product is not in an airtight container.
i) The Product is not soaked in brine at completion of packaging
j) The Frozen Lobster Tails are palletized and returned to the United States.
The master cartons packed with the frozen lobster tails will then be imported into the United States. You seek the tariff classification, USMCA status and country-of-origin/marking status of this importation.
The applicable tariff provision for the frozen raw 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 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 the World Wide Web at https://hts.usitc.gov/current.
Trade Agreement (USMCA)
The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or
(A) the good is produced entirely in the territory of one or more USMCA countries;
(B) one or more of the nonoriginating materials provided for as parts under the tariff schedule and used in the production of the good do not satisfy the requirements set forth in this note because—
(1) both the good and its materials are classified under the same subheading or under the same heading that is not further subdivided into subheadings; or
(2) the good was imported into the territory of a USMCA country in unassembled form or disassembled form but was classified as an assembled good pursuant to general rule of interpretation 2(a) of the tariff schedule, and
Based on the facts provided, the frozen lobster tails described above qualify for USMCA preferential treatment, because they will meet the requirements of HTSUS General Note 11(b)(i). The goods will therefore be entitled to preferential treatment under USMCA upon compliance with all applicable laws, regulations, and agreements.
Country of Origin Marking
In your letter, you contend that the finished product should be marked “Product of the U.S.A” upon importation into the United States. To allow for a more seamless transition period, at this time, CBP continues to utilize the marking rules set forth in 19 C.F.R. Part 102, with the exception of 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11. Paragraph (a) of this section provides that the country of origin of a good is the country in which (1) the good is wholly obtained or produced, or (2) the good is produced exclusively from domestic materials, or (3) each foreign material incorporated into that good undergoes an applicable change in tariff classification set out in section 102.20 of the regulations.
In this case, nothing is added to the U.S-origin lobster in Canada; therefore, we find it is wholly obtained in the United States, and that the finished, packaged frozen lobster tails is a good of the United States for marking purposes.
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 U.S. Federal Trade Commission, Bureau of Consumer Protection, Division of Enforcement, which may be contacted for advice at 600 Pennsylvania Avenue N.W., Washington, D.C. 20580, or through the FTC’s website at http://www.ftc.gov.
Please note that seafood is subject to the Mandatory Country of Origin Labeling (“COOL”) requirements administered by the USDA’s Agricultural Marketing Service (AMS), we advise you to check with that agency for their further guidance on your scenario. Contact information for AMS is as follows:
USDA-AMS-LS-SAT
Room 2607-S, Stop 0254
1400 Independence Avenue, SW
Washington, DC 20250-0254
Tel. (202) 720-4486
Website: www.ams.usda.gov/COOL
Email address for inquiries: [email protected]
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