CLA-2-21:OT:RR:NC:2:228
Ms. Zhenli Wang
Sirio Nutrition Co., Ltd.
13502 Whittier Blvd
Whittier, CA 90605
RE: The tariff classification and country of origin of sugar-coated krill oil gummies from China
Dear Ms. Wang:
In your letter dated January 5, 2022, you requested a tariff classification and a country of origin ruling.
An ingredients breakdown, a close-up high-resolution photograph of the product, a description of the manufacturing process, and a manufacturing flowchart accompanied your inquiry.
The product, “Krill Oil Gummy (Sugar Coated),” is said to contain krill oil, natural lemon flavouring and natural grapefruit flavouring from the United States, glucose syrup, sucrose, water, caster sugar, bovine gelatin, orange juice concentrate, apple juice concentrate, citric acid, L-ascorbic acid, lactic acid and two types of natural orange flavouring, lecithin, and natural flavouring (eucalyptus/mint flavouring) from China, wheat starch and acacia gum from France, and black carrot juice concentrate from Denmark.
In China, manufacturing commences with mixing and cooking the ingredients to form a syrup. The gelatin is liquified and added to the syrup, which is further processed by blending the solution with the krill oil and remaining ingredients. Subsequently, the liquid is poured into a mould and dried under a controlled environment until the desired moisture content is appropriate. The gummy is demoulded and polished with castor sugar in a polishing machine and packed into a sealed container.
The “Krill Oil Gummy (Sugar Coated)” product will be marketed as a dietary supplement upon importation, which will be sold to nutritional supplement brands and wholesalers, not to individuals or directly to the consumer. The label and marketing information has not been determined yet, as it in the developmental stage. However, it may also be imported in bulk or retail. Presently, the “Krill Oil Gummy (Sugar Coated)” product is packaged in bags of 1000 gummies, 4 bags per carton.
The applicable subheading for the product, “Krill Oil Gummy (Sugar Coated),” when imported in non-retail containers, if imported in quantities that fall within the limits described in additional U.S. note 8 to chapter 17, will be 2106.90.9500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included … other … other … articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17… described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions. The general rate of duty will be 10 percent ad valorem. If the quantitative limits of additional U.S. note 8 to chapter 17 have been reached, the product will be classified in subheading 2106.90.9700, HTSUS, and dutiable at the general rate of 28.8 cents per kilogram plus 8.5 percent ad valorem.
The applicable subheading for the product, “Krill Oil Gummy (Sugar Coated),” when imported in retail packaging, will be 2106.90.9897, HTSUS, which provides for food preparations not elsewhere specified or included . . . other . . . 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 the World Wide Web at https://hts.usitc.gov/current.
As defined in 19 CFR 134.1(b), “country of origin” means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to change the country of origin of the article. A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. See United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and National Juice Products Association v. United States, 628 F. Supp. 978 (Ct. Int’l Trade 1986).
In the present case, the krill oil of United States origin has undergone a substantial transformation. The operations performed in China result in a product with a different name, character, or use. The essential character of the krill oil is changed. Accordingly, the country of origin of the finished product is China.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 2106.90.95 or 2106.90.97, HTSUS, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, in addition to subheading 2106.90.95 or 2106.90.97, HTSUS, listed above.
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 Timothy Petrulonis at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division