Mr. Scott Hoffman
Trans American CHB, Inc.
Buffalo, NY 14227
RE: The tariff classification, country of origin marking, and status under the North American Free Trade Agreement (NAFTA), of a cake mix from Canada; Article 509
Dear Mr. Hoffman:
In your letters dated January 11, 2010 and February 24, 2010, on behalf of Dr. Oetker Canada, Ltd., you requested a ruling on the status of a cake mix from Canada under the NAFTA.
A sample and ingredients breakdown were provided with your second letter. Additional information about the ingredients was provided in an email transmission dated March 1, 2010. The sample was examined and disposed of. Dr. Oetker brand Marzipan Cake Mix consists of a plastic film pouch containing a dry cake mix and a foil pouch containing a chocolate-flavored frosting, packed together for retail sale in a sealed cardboard box containing 15.9 ounces (450 grams), net weight. The front panel of the box contains the name of the product and an illustrated “suggested serving.” The rear panel contains printed instructions for making the cake. One side panel contains the “nutrition facts” information, and the other side panel bears the producer’s name and address and the statement “product of Canada.”
The cake mix is composed of approximately 56 percent wheat flour, 39 percent sugar, 2 percent emulsifier, and less than one percent, each, of sodium acid pyrophosphate, sodium bicarbonate, artificial flavor, cellulose gum, and salt. The frosting is composed of approximately 32 percent hydrogenated vegetable oil, 29 percent sugar, 14 percent cocoa, and less than one percent, each, of lecithin and natural and artificial flavor. The marzipan cake is prepared by combining the mix with eggs, butter, and milk, and baking. The frosting is first warmed to bring it to a fluid state, and then applied to the finished cake.
The wheat flour in the cake mix is a product of Canada, the sugar is a product of India or Brazil, refined in Canada, the emulsifier is a product of Germany, the sodium acid pyrophosphate and sodium bicarbonate may be products of the United States or Germany, the flavor and gum are products of the United States, and the salt may be a product of the United States or Canada. The frosting is made in Germany. In Canada, the cake mix ingredients are blended according to the prescribed formula, packed in a plastic pouch, and inserted into the cardboard box along with the frosting pouch.
The applicable subheading for the Dr. Oetker Marzipan Cake Mix, if imported in quantities that fall within the limits described in additional U.S. note 3 to chapter 19, will be 1901.20.6500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40 percent by weight or cocoa calculated on a totally defatted basis, not elsewhere specified or included… mixes and doughs for the preparation of bakers’ wares of heading 1905…other…other…mixes and doughs described in additional U.S. note 1 to chapter 19…described in additional U.S. note 3 to this chapter and entered pursuant to its provisions. The rate of duty will be 10 percent ad valorem. If the quantitative limits of additional U.S. note 3 to chapter 19 have been reached, the product will be classified in subheading 1901.20.7000, HTSUS, and dutiable at the rate of 42.3 cents per kilogram plus 8.5 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 http://www.usitc.gov/tata/hts/.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if--
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein,…
Based on the facts provided, the Dr. Oetker Marzipan Cake Mix described above qualifies for NAFTA preferential treatment, because it will meet the requirements of HTSUS General Note 12(b)(ii)(A) and 12(t)/19.4. It will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a “good of a NAFTA country” are also determined in accordance with Annex 311 of the North American Free Trade Agreement (“NAFTA”), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.
Section 134.1(b) of the regulations, defines “country of origin” as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).
Section 134.1(j) of the regulations, provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a “good of a NAFTA country” may be marked with the name of the country of origin in English, French or Spanish.
Part 102 of the regulations, sets forth the “NAFTA Marking Rules” for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the imported product, Dr. Oetker Marzipan Cake Mix, is a good of Canada for marking purposes. The sample is conspicuously, legibly and permanently marked in satisfaction of the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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 Stanley Hopard at (646) 733-3029.
Robert B. Swierupski
National Commodity Specialist Division