CLA-2-18:RR:NC:SP:232 G89377
Mr. David M. Dunbar
Katten Muchin Zavis
525 West Monroe Street
Suite 1600
Chicago, IL 60661-3693
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of chocolate crumb from Canada or Mexico; Article 509
Dear Mr. Dunbar:
In your letter dated March 26, 2001, on behalf of Kerry Inc. of Beloit Wisconsin, you requested a ruling on the status of chocolate crumb from Canada or Mexico under the NAFTA.
The subject merchandise is stated to contain 10 to 13 percent chocolate liquor, 30 to 32 percent whole milk powder and 55 to 60 percent sucrose. The product will have a butterfat content of 8 to 9 percent. The chocolate crumb will be imported in powder form in 50 pound bags or in one ton totes. It will be used as an ingredient in the chocolate and confectionery industry. The origin of the chocolate liquor will be Africa, Brazil or Malaysia. The origin of the whole milk powder will be Canada, European Union or New Zealand. The origin of the sucrose will be Canada or Mexico. The chocolate crumb will be manufactured in Canada or Mexico.
When produced in Canada, the applicable subheading for the chocolate crumb, if imported in quantities that fall within the limits described in additional U.S. note 2 to chapter 18, will be 1806.20.2400, Harmonized Tariff Schedules of the United States (HTS), which provides for Chocolate and other food preparations containing cocoa: Other preparations in blocks or slabs weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar...other...containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection)...other, containing over 5.5 percent by weight butterfat...described in additional U.S. note 2 to chapter 18 and entered pursuant to its provisions. The general rate of duty will be 5 percent ad valorem. If the quantitative limits of additional U.S. note 2 to chapter 18 have been reached, and the product contains 21 percent or more by weight of milk solids, classification is under subheading 1806.20.2800, HTS, and dutiable at the rate of 52.8 cents per kilogram plus 4.3 percent ad valorem.
Each of the non-originating materials used to make the chocolate crumb has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/18. When produced in Canada, the chocolate crumb will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. This rate will apply only if the chocolate crumb is classified under subheading 1806.20.2400, HTS.
When produced in Mexico, the applicable subheading for the chocolate crumb will be 1806.20.2800, HTS, which provides for Chocolate and other food preparations containing cocoa: Other preparations in blocks or slabs weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar...other ... containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection)...other, containing over 5.5 percent by weight butterfat: other…other. The general rate of duty will be 52.8 cents per kilogram plus 4.3 percent ad valorem.
In the case where the chocolate crumb is produced in Mexico, each of the non-originating materials used to make the product has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/18. The chocolate crumb will be entitled to a free rate of duty under subheading 9906.18.14, HTS, subject to the quantitative limits specified in U.S. note 7 to subchapter VI. If the quantitative limits of U.S. note 7 to subchapter VI have been reached, and the product is valued not over 59 cents per kilogram, the rate of duty will be 11.3 cents per kilogram under subheading 9906.18.15, HTS. If the quantitative limits specified in U.S. note 7 to subchapter VI have been reached, and the product is valued over 59 cents per kilogram, the rate of duty will be 18.9 percent ad valorem under subheading 9906.18.16, HTS, under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.
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 John Maria at 212-637-7059.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division