CLA-2-38:OT:RR:E:NC:N2:238
Ms. Susan Parker
Arysta Lifescience N.A.
15401 Weston Parkway, Suite 150
Cary, NC 27513
RE: The tariff classification and country of origin marking of Orthene® Pellet
Dear Ms. Parker:
In your letter dated April 6, 2009, you requested a tariff classification ruling, as well as a country of origin confirmation.
The subject product, Orthene® Pellet, is a concentrated organophosphate insecticide containing Acephate (CAS-30560-19-1) (97.4%) as the active ingredient. Orthene® Pellet is a form of Acephate in which Acephate Technical powder (see NY Ruling Letter N045356) is extruded into pellets with the aid of a vinyl pyrollidone-vinyl acetate copolymer. In this form, the merchandise may be applied directly by professional pest control operators after dilution with water. It is used as a spray to control cockroaches, ants, crickets, firebrats, earwigs, pillbugs, sowbugs, pantry pests, and wasps within industrial, institutional and commercial buildings, including restaurants, warehouses, stores, hospitals, hotels, manufacturing plants and ships. Acephate Technical powder is a product used for further manufacturing of direct application pesticides. It is not used in the field. Orthene® Pellet is intended for direct application by professional pest control applicators in the field. It is the opinion of this office that, for tariff classification purposes, Orthene® Pellet has the characteristics of a pesticidal preparation.
The applicable subheading for the Orthene® Pellet will be 3808.91.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulfur-treated bands, wicks and candles, and flypapers): Other: Insecticides: Other: Other.” The rate of duty will be 5% ad valorem.
You also requested confirmation as to whether or not the processing that takes place in the United States to convert Acephate Technical to Orthene® Pellet is enough to change the country of origin to US origin. As we have seen previously in NY Ruling Letter N045356, you import Acephate Technical from India in bulk powder form. In the United States it is mixed with additional processing aids (such as the vinyl pyrollidone-vinyl acetate copolymer mentioned above) and converted to a solid pellet. The bulk powder has a tendency to clump or agglomerate. It has a short shelf life and also presents health and safety problems for formulators, end users, and the environment. Previous formulations of Acephate such as dusts and organic solvent sprays presented similar difficulties. The pelletized form affords a stable product reducing dust problems, odors, and safety hazards to the end users or the environment. It is also easier and more economical to apply since it requires simple dilution in water with no organic solvents, emulsifiers or binding agents.
We have examined the technical literature in order to better understand the processing involved in pelletizing Acephate. In U.S. Patent 6,337,323 we found the following:
“Acephate technical powder having a minimum purity of about 97% by weight (preferably 98% or greater, more preferably 99% or greater and most preferably 99.5% or greater purity) is first subjected to a delumping step in a conventional mill or the like, if necessary to reduce or eliminate clumps of material that may have formed due to the material's agglomeration tendency described above. Delumped technical powder provides for better flowability during extrusion. Next, the delumped acephate technical powder can be blended with a small quantity (e.g., from about 0.5 to about 3.0% by weight) of a processing aid (other than water), such as the Agrimer VA-6 [the vinyl pyrollidone-vinyl acetate] copolymer described above. However, such a step is not necessary to achieve pellets in accordance with the present invention, but may assist flowability during extrusion, particularly for some insecticidal compounds…As described above, however, such processing aids are not essential in practicing the present invention. If desired, however, other processing aids besides Agrimer VA-6 can be used, as would be apparent to one of ordinary skill in the art. The blend thus formed, or the delumped technical, can be stored in drums until needed. Alternatively, delumping and blending, if carried out, can be part of a continuous in-line process. The Acephate technical powder is then placed into a suitable apparatus for supplying the powder to the extruder. The supply can either be continuous over the course of a desired production run, or alternatively, measured batches can be supplied. In one embodiment, the powder feed system to the extruder was an Acrison Auger type feeder, modified with a large feed hopper into which the powder is placed. Using this apparatus the powder feed rate can be controlled as desired by calibrating a variable speed drive before start-up, and controlling the feed rate during operation. During pilot plant tests, the unit was calibrated to allow for a variable flow rate of from about 90 lb/hour to about 250 lb/hour, although it would be understood that actual flow rates during commercial production runs would depend on the particular equipment in use.”
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 134.45(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. 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. The rules for determining when, for marking purposes, the country of origin of an imported good is one of the parties to "NAFTA" are set forth in Part 102, Customs Regulations. 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.
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. The regulations implementing the requirements and exceptions to 19 U.S.C. §1304 are set forth in Part 134, Customs & Border Protection Regulations (19 C.F.R. Part 134). Section 134.1(b), Customs & Border Protection Regulations (19 C.F.R. §134.1(b)), defines the 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 the meaning of this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin." A substantial transformation occurs when articles lose their identity and become articles having a new name, character or use. United States v. Gibson-Thomsen Co., 27 CCPA 267 at 270 (1940), National Juice Products v. United States, 10 CIT 48, 628 F. Supp. 978 (CIT 1986).
In the instant case, we find that the processing of Acephate Technical powder into Orthene® Pellet involves only a physical transformation. Orthene® Pellet in its “new form” is still 97.4 per cent pure Acephate active ingredient. The pelletization is directed to create a more chemically stable, low moisture active ingredient product. No other active ingredient is added and no chemical changes are made. The addition of processing aids during pelletization, while serving to assist flowability during extrusion, does not transform the imported chemical into a new article with a new end use. Pellets have the practical advantages of reducing dust safety problems, eliminating odors, increasing stability, and facilitating use. The end use is not changed. The end user shifts from a manufacturer/formulator to a field applicator, but there is no impact on the insecticide. This scenario has been addressed in numerous court and administrative decisions. We find that the country of origin of the finished insecticide will be the country of origin of the active ingredient, namely India.
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 product may be subject to the requirements of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), which are administered by the U.S. Environmental Protection Agency, Office of Pesticide Programs. Information on the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) can be obtained by contacting the National Pesticide Information Center (NPIC) at 1-800-858-7378, or by visiting the EPA website at www.epa.gov.
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 Harvey Kuperstein at (646) 733-3033.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division