OT:RR:NC:N3:140
Mr. Charles Spoto
Alba Wheels Up Intl LLC
1 E. Lincoln Ave.
Valley Stream, NY 11580
RE: The country of origin and classification of SB-9503, tradename Midori Biofungicide
Dear Mr. Spoto:
In your letter dated April 25, 2023, you requested a binding ruling on behalf of your client, Gowan Company LLC, on the tariff classification and country of origin of SB-9503, tradename Midori Biofungicide.
The subject product, SB-9503, tradename Midori Biofungicide, is a fungicide preparation containing the Bacillus amyloliquefaciens strain AT 332 (30% by weight) as the active ingredient. It is intended to be used for the control of fungal diseases on vegetables, grapes, and fruit crops.
Classification:
The SB-9503 tradename Midori Biofungicide will be classified under heading 3808, HTSUS, specifically under subheading 3808.92.5080, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulfur-treated bands, wicks and candles, and flypapers): Other: Fungicides: Other: Other: Other.”
Country of Origin:
You state that SB-9503 is a formulated product that is not produced by an integrated system. During the formulation process, no chemical reactions are intended or expected. The raw materials have origins in multiple countries but are mixed, milled, granulated, dried, and sieved in Japan. The finished product is a water dispersible granule formulation of Bacillus amyloliquefaciens strain AT 332 and is intended for use to control fungal diseases mainly powdery mildew and gray mold on vegetables, grapes and fruit crops.
The Bacillus amyloliquefaciens strain AT 332 is mixed with a dispersant, a surfactant and other inert materials to enable granulization. After quality control inspection, it is ready for shipping. The finished product SB-9503 tradename Midori Biofungicide will be shipped to the United States in 300-500KG cardboard boxes or 25Kg fibre drums from Japan for further packing.
In the instant case, the active ingredient, the Bacillus amyloliquefaciens strain AT 332 from China already possesses the essential character of the finished product (Fungicide). You indicate that no chemical reaction occurred in Japan.
The "country of origin" is defined in 19 CFR 134.1(b) 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.”
The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In the instant case, we find that the formulation of the Bacillus amyloliquefaciens strain AT 332 into a field-ready product involves merely a dilution and blending of the single active ingredient. The processing in Japan does not transform the imported ingredient. It simply facilitates its use. This scenario has been addressed in numerous court and administrative decisions. We find that the country of origin of the finished fungicide will be the country of origin of the active ingredient, namely China.
Pursuant to U.S. Note 20(f) to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 3808.92.5080, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty under 9903.88.03, HTSUS. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 3808.92.5080, HTSUS, listed above. 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 at https://hts.usitc.gov/current.
This merchandise may be subject to the requirements of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), which are administered by the U.S. Environmental Protection Agency, Office of Pesticide Programs. Information on the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) can be obtained by contacting the National Pesticide Information Center (NPIC) at 1-800-858-7378, or by visiting the EPA website at www.epa.gov.
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 Evan Thomas at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division