CLA-2-21:OT:RR:NC:N2:228
Mr. Michael Roll
Pisani & Roll
1875 Century Park East Suite 600
Los Angeles, CA 90067
RE: The tariff classification, status under the North American Free Trade Agreement (NAFTA), and country of origin marking of white chocolate compound discs and white chocolate bark from Canada; Article 509
Dear Mr. Roll:
In your letter dated December 18, 2007 on behalf of Blommer Chocolate Company, you requested a ruling on the status of white chocolate discs and white chocolate bark from Canada under the NAFTA.
Ingredients breakdowns and samples were submitted with earlier correspondence. All samples were forwarded to the U.S. Customs and Border Protection laboratory for analysis. The products are white-colored, solid materials, in disc or block form. Disc versions 1 and 2 measure one inch in diameter; version 3 measures ½-inch in diameter. The bark is a deeply-scored solid block of material approximately one inch thick. Disc version one is described as consisting of 58 percent sugar, 28 percent palm kernel oil, 5 percent, each, of whole milk and whey, and 4 percent skim milk. Version 2 is said to be composed of 59 percent sugar, 29.9 percent palm kernel oil, 4 percent whole milk, 3.5 percent, each, of skim milk and reduced mineral whey, and less than one percent, each, of lecithin, salt, and vanillin. Version 3 is said to contain 49.85 percent sugar, 40.75 percent palm kernel oil, 3.4 percent whole milk, 2.95 percent reduced mineral whey, 2.55 percent skim milk powder, and less than one percent, each, of lecithin, salt, and vanillin. The bark is said to be composed of 63 percent sugar, 29.05 percent palm kernel oil, 3 percent whole milk, 2.55 percent reduced mineral whey, 2 percent skim milk, and less than one percent, each, of salt, lecithin, and vanillin.
Laboratory analysis of the samples found disc version 1 contained 6.17 percent milk solids and 62.9 percent sucrose, by dry weight. Disc version 2 contained 6.21 percent milk solids and 67.2 percent sucrose, by dry weight, and disc version 3 contained 19.2 percent milk solids and 33 percent sucrose, by dry weight. Analysis of the white chocolate bark sample found the product contained 4.92 percent milk solids and over 65 percent sucrose, by dry weight.
The sugar and palm kernel oil are products of non-NAFTA countries. All other ingredients are products of the United States or Canada. In Canada, the ingredients are combined according to the prescribed formula, processed into chip or bark form, packed into boxes containing 25 to 50-pounds, and sold to non-retail customers who will use them, after a change in form, to enrobe or dip pastries and confections.
The applicable subheading for the white chocolate compound disc version 3, if imported in quantities that fall within the limits described in additional U.S. note 10 to chapter 4, will be 2106.90.6400, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included…other…containing over 10 percent by weight of milk solids…other, dairy products described in additional U.S. note 1 to chapter 4…described in additional U.S. note 10 to chapter 4 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 10 to chapter 4 have been reached, the product will be classified in subheading 2106.90.6600, HTSUS, and dutiable at the rate of 70.4 cents per kilogram plus 8.5 percent ad valorem.
The applicable subheading for the white chocolate compound disc version 2 and the white chocolate bark will be 2106.90.9400, HTSUS, which provides for food preparations not elsewhere specified or included…other…articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17… other. The rate of duty will be 28.8 cents per kilogram plus 8.5 percent ad valorem.
The applicable tariff provision for the white chocolate compound disc version 1 will be 2106.90.9997, HTSUS, which provides for food preparations not elsewhere specified or included…other…other…other… containing sugar derived from sugar cane and/or sugar beets. The general rate of duty will be 6.4 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 white chocolate compound disc version one and the white chocolate compound disc version three (when classified in subheading 2106.90.6400) qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A), 12(t)/21.12, and 12(t)/21.14. These discs will 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 disc versions one and three are goods of Canada for marking purposes. The country of origin of disc version two and the bark is the country of origin of the non-NAFTA sugar ingredient.
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 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.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division