CLA-2-17:RR:NC:SP:232 C89506
Mr. Robert V. Tinkham
Chicago Sweeteners Incorporated
1700 Higgins Road, Suite 610
Des Plaines, Illinois 60018
RE: The tariff classification and status under the North American Free Trade
Agreement (NAFTA), of Powdered Drink Crystals from Mexico; Article 509
Dear Mr. Tinkham:
In your letter dated June 23, 1998 you requested a ruling on the status of
various powdered drink crystals from Mexico under the NAFTA. Your request also
asks for the country of origin for marking purposes and for tariff rate quota
allocation purposes.
The subject merchandise will consist of powdered drink crystals in five
flavors: orange, lemon, cherry, punch and grape. The products will contain 75
percent to 95 percent granulated sugar, 0 percent to 18 percent fructose, 4
percent to 10 percent citric acid, malic acid, sorbic acid, silicon dioxide,
flavorings and colors. The granulated sugar and the fructose will be of United
States origin. The balance of the ingredients may be from a NAFTA or non-NAFTA
country. The ingredients are blended and packaged in Mexico into 2000 pound
sacks, and then shipped to the United States for retail packaging. The powdered
drink crystals require only the addition of water by the retail consumer.
The applicable tariff provision for the powdered drink crystals will be
1701.91.5800, Harmonized Tariff Schedule of the United States Annotated
(HTSUSA), which provides for cane or beet sugar and chemically pure sucrose, in
solid form...containing added flavoring matter whether or not containing added
coloring... articles containing over 10 percent by dry weight of sugar described
in additional U.S. note 3 to chapter 17...other. The general rate of duty will
be 35.9 cents per kilogram plus 5.4 percent ad valorem.
If all of the ingredients are from NAFTA countries, the powdered drink
crystals, being wholly obtained or produced entirely in the territory of the
United States, Canada, and Mexico will meet the requirements of HTSUSA General
Note 12(b)(i), and will therefore be entitled to a free rate of duty if entered
under the terms of general note 12 of the Harmonized Tariff Schedule of the
United States, and imported in quantities that fall within the quantitative
limits described in U.S. note 20 to subchapter 6 of chapter 99 HTS pursuant to
subheading 9906.17.39. If the quantitative limits of U.S. note 20 to subchapter
6 of chapter 99 have been reached, and if the product is valued not over 31.5
cents per kilogram, it will be dutiable at the rate of 19 cents per kilogram in
subheading 9906.17.40, HTS. If valued over 31.5 cents per kilogram, the rate of
duty will be 60.2 percent ad valorem, pursuant to subheading 9906.17.41, HTS,
upon compliance with all applicable laws, regulations, and agreements.
If the ingredients, other than the granulated sugar, or fructose, are from
non-NAFTA countries, each of the non-originating materials used to make the
powdered drink crystals have satisfied the changes in tariff classification
required under HTSUSA General Note 12(t)/17, and will therefore be entitled to a
free rate of duty if entered under the terms of general note 12 of the
Harmonized Tariff Schedule of the United States, and imported in quantities that
fall within the quantitative limits described in U.S. note 20 to subchapter 6 of
chapter 99 HTS pursuant to subheading 9906.17.39. If the quantitative limits of
U.S. note 20 to subchapter 6 of chapter 99 have been reached, and if the product
is valued not over 31.5 cents per kilogram, it will be dutiable at the rate of
19 cents per kilogram in subheading 9906.17.40, HTS. If valued over 31.5 cents
per kilogram, the rate of duty will be 60.2 percent ad valorem, pursuant to
subheading 9906.17.41, HTS, 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 processed in a NAFTA country prior
to being imported into the U.S., and on the country of origin for duty and quota
allocation purposes. 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 C.F.R.
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 powdered drink crystals are processed in a
NAFTA country "Mexico" prior to being imported into the U.S. Since, "Mexico" is
defined under 19 C.F.R. 134.1(g), as a NAFTA country, we must first apply the
NAFTA Marking Rules in order to determine whether the imported powdered drink
crystals are goods 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 imported powdered drink crystals are
goods of the "United States" for marking purposes, since they satisfy the
requirements of Section 102.11(b)(1). Therefore, they are not required to be
marked with the country of origin for Customs marking purposes.
Noting Section 102.19(b) of the regulations, the country of origin of the
powdered drink crystals for Customs duty purposes and for the tariff rate quota
allocation is "Mexico".
This ruling is being issued under the provisions of Part 181 of the Customs
Regulations (19 C.F.R. 181).
This ruling letter is binding only as to the party to whom it is issued and
may be relied on only by that party.
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 John Maria at 212-466-
5730.
Should you wish to request an administrative review of this ruling, submit
a copy of this ruling and all relevant facts and arguments within 30 days of the
date of this letter, to the Director, Commercial Rulings Division, Headquarters,
U.S. Customs Service, 1300 Pennsylvania Ave., NW, Washington, DC 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division