CLA-2-20:OT:RR:NC:N2:232
Ms. Misty Gibbins
Pacific Customs Brokers Inc.
2150 Peace Portal Dr., Suite 1
Blaine, WA 98230
RE: The tariff classification and eligibility of the United States-Mexico-Canada Agreement (USMCA) of Yogurt-Covered Fruit from Canada
Dear Ms. Gibbins:
In your letter dated February 27, 2024, you requested a binding ruling on the tariff classification and United States-Mexico-Canada Agreement (USMCA) eligibility of five confectionery products on behalf of your client, Foley's Candies Limited Partnership (Richmond, BC, Canada).
An ingredients breakdown and process flow charts accompanied your inquiry.
Yogurt Covered Freeze Dried Blueberries are described as being panned in flavored yogurt confectionary coating and finished with polish and confectioners glaze. The product is composed of sugar from Canada (55 percent), hydrogenated palm kernel oil from the United States, Malaysia, and India (24 percent), freeze dried blueberries from Canada, the United States or Chile (11 percent), yogurt powder from Canada (4 percent), whey powder from the United States or Canada (3 percent), powdered whey protein concentrate from the United States or Canada (3 percent), and less than 0.5 percent of the following four ingredients: confectioners glaze from Germany, glucose from Canada, soy lecithin from the United States, Canada, and India, and tapioca dextrin from the United States. The item is ready to eat in the form imported and will be packed in a 10 kg bulk corrugated cardboard box lined with a polyethylene bag to be repackaged for retail sale.
Yogurt Covered Freeze Dried Raspberries are described as being panned in flavored yogurt confectionary coating and finished with polish and confectioners glaze. The product is composed of sugar from Canada (58 percent), hydrogenated palm kernel oil from the United States, Malaysia and India (26 percent), freeze dried raspberries from Canada, the United States or Chile (4 percent), yogurt powder from Canada (4 percent), whey powder from the United States or Canada (3 percent), powdered whey protein concentrate from the United States or Canada (3 percent), confectioners glaze from Germany (1 percent), and less than 0.5 percent of the following three ingredients: glucose from Canada, soy lecithin from the United States, Canada, and India, and tapioca dextrin from the United States. The item is ready to eat in the form imported and will be packed in a 10 kg bulk corrugated cardboard box lined with a polyethylene bag to be repackaged for retail sale.
Yogurt Covered Mango is described as being panned in flavored yogurt confectionary coating and finished with polish and confectioners glaze. The product is composed of sugar from Canada (42 percent), hydrogenated palm kernel oil from the United States, Malaysia, and India (19 percent), dried mango from Canada, the United States or Chile (30 percent), yogurt powder from Canada (3 percent), whey powder from the United States or Canada (2 percent), powdered whey protein concentrate from the United States or Canada (2 percent), and less than 0.5 percent of the following five ingredients: glucose from Canada, confectioners glaze from Germany, and citric acid from Canada, soy lecithin from the United States, Canada, and India, and tapioca dextrin from the United States. The item is ready to eat in the form imported and will be packed in 12 kg bulk corrugated cardboard lined with a polyethylene bag. Its intended use in the United States is said to be for blending into a tropical fruit mix of mango, papaya, and pineapple and packaged for retail sale or sold in bulk bins at retail.
Yogurt Covered Papaya is described as being panned in flavored yogurt confectionary coating and finished with polish and confectioners glaze. The product is composed of sugar from Canada (44 percent), dried papaya from Canada, the United States, or Chile (27 percent), hydrogenated palm kernel oil from the United States, Malaysia, and India (20 percent), yogurt powder from Canada (3 percent), whey powder from the United States or Canada (2 percent), powdered whey protein concentrate from the United States or Canada (2 percent), and less than 0.5 percent of the following six ingredients: glucose from Canada, confectioners glaze from Germany, citric acid from Canada, soy lecithin from the United States, Canada, and India, tapioca dextrin from the United States, and natural flavor from the United States and Canada. The item is ready to eat in the form imported and will be packed in bulk corrugated cardboard lined with a polyethylene bag. Its intended use in the United States is said to be for blending into a tropical fruit mix of mango, papaya, and pineapple and packaged for retail sale or sold in bulk bins at retail.
Yogurt Covered Pineapple is described as being panned in flavored yogurt confectionary coating and finished with polish and confectioners glaze. The product is composed of sugar from Canada (42 percent), dried pineapple from Canada, the United States, or Chile (30 percent), hydrogenated palm kernel oil from the United States, Malaysia, and India (19 percent), yogurt powder from Canada (3 percent), whey powder from the United States or Canada (2 percent), powdered whey protein concentrate from the United States or Canada (2 percent), and less than 0.5 percent of the following six ingredients: glucose from Canada, confectioners glaze from Germany, citric acid from Canada, soy lecithin from the United States, Canada, and India, tapioca dextrin from the United States, and natural flavor from the United States and Canada. The item is ready to eat in the form imported and will be packed in 12 kg bulk corrugated cardboard lined with a polyethylene bag. Its intended use in the United States is said to be for blending into a tropical fruit mix of mango, papaya, and pineapple and packaged for retail sale or sold in bulk bins at retail.
Classification:
In your letter, you suggested that the products may be classified under subheading 1704.90.3590, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Sugar confectionery (including white chocolate), not containing cocoa: other: confections or sweetmeats ready for consumption: other: other: other. We agree. The rate of duty will be 5.6 percent ad valorem.
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
(i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
(iii) 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)); or
Since the confectionery products contain non-originating ingredients, they are not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor are the products produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the product qualifies under GN 11(b)(iii). As previously noted, the confectionery products are classified under subheading 1704.90.3590, HTSUS. The applicable rule of origin for goods classified under subheading 1704.90.3590, HTSUS, is in GN 11(o)/17.2, HTSUS, which provides [a] change to heading 1704 from any other heading.
All five confectionery products are said to contain the following non-originating ingredients that need to undergo the tariff shift: hydrogenated palm kernel oil from Malaysia and India; blueberries, raspberries, mango, papaya, and pineapple from Chile; confectioners glaze from Germany; and soy lecithin from India.
Since the non-originating ingredients are all classified in a Heading other than Heading 1704, the tariff shift rule is met. Accordingly, the products are eligible for preferential tariff treatment under the USMCA.
Based on the facts provided, the confectionery products described above qualify for USMCA preferential tariff treatment because they will meet the requirements of HTSUS General Note 11(b)(iii). The confectionery products will therefore be entitled to a free rate of duty under the USMCA upon compliance with all applicable laws, regulations, and agreements.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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.
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 and Border Protection Regulations (19 C.F.R. 177).
CLA-2-20:OT:RR:NC:N2:232
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, please contact National Import Specialist Frank Troise at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division