CLA-2-84:OT:RR:NC:N1:104
Matthew A. Clark
Kuehne+Nagel
1001 Busse Road
Elk Grove Village, IL 60007
RE: The eligibility of the United States-Mexico-Canada Agreement (USMCA) of a contaminated food product removal system
Dear Mr. Clark:
In your letter dated May 17, 2022, you requested a binding ruling on the eligibility of a
contaminated food product removal system under the United States-Mexico-Canada Agreement (USMCA) on behalf of P&P Optica Inc.
The P&P Optica, PP Smart Imaging System, uses hyperspectral-imaging technology to detect, identify, sort, and remove contaminated food on a production line. This system includes a control and electrical panel, electric motor-driven conveyors, a pneumatic sorting mechanism, halogen lights, and a specialized near infrared hyperspectral vision camera system. The continuous action belt-type conveyors, arranged in three tiers, transport the material through the machinery. The first tier and third tier conveyors interface with an established production line. Customers provide the manufacturer with a list of the types of materials they wish to be removed, and the system’s software algorithms determine the difference between materials, the conveyor itself, and actual product. After the PP Smart’s vision system identifies a foreign object, it sends a signal to the system’s PLC (programmable logic controller) which in turn signals a mechanical sorter at the end of the second (middle) conveyor. Contaminated food is automatically sorted into a reject bin. The system does not remove foreign objects from the product, but rather removes contaminated product from the conveyor-driven production line.
The applicable subheading for the PP Smart Imaging System will be subheading 8479.89.9599, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other: Other”. The rate of duty will be 2.5 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 World Wide Web at https://hts.usitc.gov/current.
In your submission you inquire whether the PP Smart Imaging System is eligible for preferential treatment under the USMCA.
Per the information provided, the components of the system, which includes the hyperspectral-imaging technology, a control and an electrical panel, conveyors, a sorting system, halogen lights, and an infrared camera system, hail from a variety of countries (including the U.S., United Kingdom, Turkey, Taiwan, Italy, Germany, Denmark, Belgium, Canada, and China, among others). The myriad components are combined with one another in Canada and packaged together to form the complete PP Smart Imaging System.
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 non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o));
The subject PP Smart Imaging System contains non-originating materials and is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i). Moreover, under GN 11(b)(ii), the PP Smart Imaging System is not a good produced entirely in Canada exclusively from originating materials. Therefore, we must next determine whether the non-originating materials undergo the tariff shift and satisfy other applicable requirements provided for in GN 11(b)(iii) and GN 11(o).
The applicable tariff shift rule for merchandise classifiable under heading 8479.89 HTSUS, is in GN 11(o), HTSUS, which provides, in relevant part:
(B) A change to any other good of subheading 8479.89 from any other subheading.
Since all the foreign materials are classified outside of subheading 8479.89, HTSUS, the requisite tariff shift rule is met, and the finished PP Smart Imaging System is considered an originating good under the USMCA and eligible for preferential treatment.
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 Denise Hopkins at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division