CLA-2-16:OT:RR:NC:2:231
Mr. Patrick Murphy
Tri Marine
P.O. Box 160
Orinda, CA 94563
RE: The tariff classification and AGOA/GSP eligibility of canned tuna from Madagascar.
Dear Mr. Murphy:
In your letter dated November 24, 2009, you requested a tariff classification ruling.
You have outlined a scenario in which whole frozen tunas will be purchased from fishing vessels flagged in both AGOA and non-AGOA eligible countries. (“AGOA” refers to the African Growth and Opportunity Act.) In Madagascar, the whole fish will be processed into canned tuna, which will then be exported directly to the United States. You seek a determination on the tariff classification of the canned tuna, and whether it will be eligible for duty-free treatment under AGOA and/or under the Generalized System of Preferences (GSP). Madagascar is a “Beneficiary Sub-Saharan African Country” (“BSAC”) for purposes of AGOA (HTSUS indicator “D”), and is also a “Least Developed Beneficiary Developing Country” (“LDBDC”) for purposes of GSP (HTSUS indicator “A+”).
The first stage of the processing in Madagascar will be the conversion of the whole fish into “tuna loins.” This will entail cooking the fish, removing their heads, tails, fins, viscera and skins, and also removing their red meat and bones. The resulting loins will then be ready for the second stage, i.e., processing into canned tuna. You state that at the beginning of that stage “the loins are placed in mechanical fillers that fill cans automatically with a specific quantity of clean tuna.” (We presume that a mechanical filler functions basically by removing a specifically sized/shaped piece of tuna from a loin and placing it into a can.) A “condiment filler” will then add water, salt and/or other flavors, depending on customer requirements. (For the purposes of this ruling, it is assumed that no oil or fat will be included within any of these added ingredients.) These additives will all be products of Madagascar or another country. The filled cans will then be inspected (and their liquid adjusted) prior to being closed and hermetically sealed in automatic can-sealing machinery. Can sizes are said to be either 6 ounces or 66.5 ounces, net weight.
The applicable subheading for the canned tuna, if entered under quota, will be 1604.14.22, Harmonized Tariff Schedule of the United States (HTSUS), which provides for prepared or preserved fish … fish, whole or in pieces, but not minced: tunas, skipjack and bonito (Sarda spp.): tunas and skipjack: in airtight containers: not in oil: in containers weighing with their contents not over 7 kg each, and not the product of any insular possession of the United States, for an aggregate quantity entered in any calendar year not to exceed 4.8 percent of apparent United States consumption of tuna in airtight containers during the immediately preceding year, as reported by the National Marine Fisheries Service. The general rate of duty will be 6%.
The applicable subheading for the canned tuna, if entered after the tariff rate quota for subheading 1604.14.22 has filled, will be 1604.14.30, HTSUS, which provides for prepared or preserved fish … fish, whole or in pieces, but not minced: tunas, skipjack and bonito (Sarda spp.): tunas and skipjack: in airtight containers: not in oil: other. The general rate of duty will be 12.5%.
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/.
Articles classifiable under subheadings 1604.14.22 and 1604.14.30, HTSUS, which are products of Madagascar, may be entitled to duty-free treatment under the African Growth and Opportunity Act (AGOA/“D”), or the Generalized System of Preferences (GSP/“A+”), upon compliance with all applicable regulations. The GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check our Web site at www.cbp.gov and search for the term “GSP”.
Please note that, in order to qualify for duty-free treatment under AGOA, merchandise imported directly into the customs territory of the United States must:
(i) be the growth, product or manufacture of a designated beneficiary sub-Saharan African country, and
(ii) the sum of the cost or value of the materials produced in one or more designated beneficiary Sub-Saharan African countries, plus the direct costs of processing operations performed in the designated beneficiary sub-Saharan African country or any two or more designated beneficiary sub-Saharan countries that are members of the same association of countries which is treated as one country under section 507(a)2 of the 1974 Act, is not less than 35 percent of the appraised value of the merchandise at the time it is entered.
As was explained in detail in Headquarters Ruling Letter (HRL) 562708, which was issued to your company on June 13, 2003, the canned tuna would meet the “product of” requirement for AGOA purposes because it has undergone a (single) substantial transformation, but, in instances where the raw tuna is supplied by non-BSAC-flag vessels, the value of that raw tuna cannot be applied toward satisfaction of the 35 percent value-content requirement. That is because the raw tuna has not undergone a “double substantial transformation,” as explained in HRL 562708.
The situation is similar with respect to GSP, which also has “product of” and 35 percent value-content requirements. The canned tuna would meet the “product of an LDBDC” requirement. However, materials, in order to have their cost or value qualify for the 35 percent value-content calculation, must be produced either in the single pertinent LDBDC (in this case, Madagascar) or in 2 or more countries which are members of the same association of countries treated as one country under section 507(2) of the Trade Act of 1974. Madagascar does not currently appear to be a member of such an association. Because of that, and because a “double substantial transformation” does not occur, the value of the raw tuna cannot be applied toward satisfaction of the 35 percent value-content requirement for GSP/A+ purposes if the tuna is caught by a vessel having a flag other than that of Madagascar.
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 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 Nathan Rosenstein at (646) 733-3030.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division