CLA-2-21:OT:RR:NC:N2:228
Mr. Michael E. Roll
Pisani & Roll LLP
1875 Century Park East – Suite 600
Los Angeles, CA 90067
RE: The tariff classification, and status under the North American Free Trade Agreement (NAFTA), of a sugar and dairy solids blend from Mexico; Article 509
Dear Mr. Roll:
In your letters dated May 2 and July 12, 2013, on behalf of Rafi Industries, Inc., you requested a ruling on the status of a sugar and dairy solids blend from Mexico under the NAFTA.
An ingredients breakdown and a sample were submitted with your May letter. Additional information was provided in your July letter. The sample was examined and disposed of. The sugar and dairy solids blend, a white-colored granulated product, is said to consist of 99 percent refined sugar and 1 percent of dairy solids (modified whey powder). The product will be imported in a variety of sizes ranging from 50-pound bags to 3000-pound totes, and be used as ingredients in the manufacture of bakery, confectionery, and beverage products. The refined sugar in the blend will be a product of the United States or Mexico, and the dairy solids will be a product of the United States. The blending will take place in Mexico.
The applicable subheading for the blend will be 2106.90.9400, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included … other … 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.
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 the World Wide Web at http://www.usitc.gov/tata/hts/.
General Note 12(a)(ii), HTSUS, requires that, for NAFTA eligibility, goods produced in Mexico must originate in the territory of a NAFTA party, under the terms of GN 12 (b), and must also qualify to be marked as goods of Mexico under the terms of the NAFTA marking rules (Customs Regulations, 19 CFR 102).
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—
they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
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 good described above is eligible for NAFTA preferential duty treatment because it meets the requirements of HTSUS General Note 12 (b)(i). The good 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.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
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.
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 when using the Mexican-origin refined sugar, the country of origin of the blend is Mexico.
When using the U.S.-origin refined sugar, the country of origin of the blend for marking purposes is the United States. The country of origin of the blend for Customs duty purposes will be Mexico.
Products of the United States are not subject to the country of origin marking requirements of 19 U.S.C. 1304. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you direct any questions on this issue to the FTC.
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 website 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 Bruce N. Hadley, Jr. at (646) 733-3029.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division