CLA-2-17:OT:RR:E:NC:232
Mr. Daniel E. Waltz
Patton Boggs
Attorneys at Law
2550 M Street, NW
Washington, DC 20037-1350
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of refined sugar from Mexico; Article 509
Dear Mr. Waltz:
In your letter dated April 4, 2008, on behalf of your client, Redpath Sugar Ltd., of Toronto Canada, you requested a ruling on the status of refined sugar from Mexico under the NAFTA.
The subject merchandise is described as refined cane sugar that will be produced from Mexican raw sugar. Mexican raw sugar is processed at the sugar refining plant located in Canada. It is stated that before any of the refinery process commences, most of the Mexican origin raw sugar is segregated from the other (non-Mexican origin) sugars in the shed. The sugar is processed separately and any residual sugar liquor remaining in the process from the previous non-Mexican raw sugar that cannot be drained will be purged from the process. Syrups in the remelt plant will be emptied into trucks and will not be mixed in or used as an input to the Mexican sugar production run. As a result, the final product will be the refined cane sugar that will be stored at the refining plant until it is imported into the United States.
The applicable subheading for the refined cane sugar will be 1701.99.1090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for cane or beet sugar and chemically pure sucrose, in solid form: Other: Other… Other. The general rate of duty will be 3.6606 cents per kilogram less 0.020668 cents per kilogram for each degree under 100 degrees (and fractions of a degree in proportion) but not less than 3.143854 cents per kilogram. If not described in additional U.S. note 5 to chapter 17 and not entered pursuant to its provisions, the applicable subheading will be 1701.99.5090, HTS. The duty rate will be 35.74 cents per kilogram.
The refined sugar, being wholly obtained or produced entirely in the territory of Mexico, will meet the requirements of HTSUS General note 12(b)(i), and will therefore be entitled to a free rate of duty, when classified under subheadings 1701.99.1090 and 1701.99.5090, HTS, under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
Your inquiry also requests a ruling on the country of origin marking requirements for an imported article which is claimed to be a good of a NAFTA country, which is later processed in a NAFTA country prior to being imported in the United States. A marked sample was not submitted with your letter for review.
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 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. You state that the imported refined sugar is produced from raw sugar originating in a NAFTA country, "Mexico" prior to being imported into the U.S. Since, "Mexico" is defined under 19 CFR 134.1(g), as a NAFTA country, we must first apply the NAFTA Marking Rules in order to determine whether the imported sugar blend is a good of a NAFTA country, and thus subject to the NAFTA marking requirements.
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 refining process does not create a new article with a new name, character or use. In September 1989, Headquarters Ruling Letter, (HQ) 082033 supports the question of whether the refining of sugar is a substantial transformation. The qualities sought after in sugar (its sweetness and nutritional value) are still present after the refining process. To paraphrase the court in National Juice Products Assn. v. the United States, 10 CIT 49, 628 F. Supp. 978 (1986), while refining may make raw sugar more suitable for retail sale, the processing of the cane into raw sugar imparted the essential character of the sugar. We find for marking purposes, the imported refined sugar is a good of a NAFTA country prior to being further processed in Canada. Since the raw sugar is produced in Mexico, it satisfies the requirements of Section 102.11(b)(1).
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/.
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 telephone number (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 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 Frank Troise at 646-733-3031.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division