CLA-2-18:RR:NC:SP:232 D80530
Mr. Patrick E. Mines
P. Mines Customs Services
28 Princess Street
P.O. Box 1197
Fort Erie, Ontario L2A 5Y2
RE: The tariff classification and status under the North American Free Trade
Agreement (NAFTA), of drink crystals from Canada; Article 509
Dear Mr. Mines:
In your letter dated June 5, 1998, on behalf of Western Basic Ingredients
Limited, you requested a ruling on the status of drink crystals from Canada
under the NAFTA. Your request also asks for the country of origin for marking
purposes of the product.
Samples were included with your request. The subject merchandise consists
of drink crystals in four flavors: Pink Lemonade, Cherry, Orange and Grape.
The products are stated to contains 95 percent sugar, 3.61 percent acid, 0.56
percent natural and artificial flavors, 0.5 percent gum, 0.3 percent silicone
dioxide, and 0.03 percent colors. There are three possible situations for the
origin of the ingredients. The sugar is grown in non-NAFTA countries and
refined in Canada. The other ingredients are of Canadian or United States
origin. The sugar is grown and refined in the United States and the other
ingredients are of Canadian or U.S. origin. The sugar is grown in non-NAFTA
countries and refined in the United States. The other ingredients are of
Canadian and U.S. in origin. It is assumed that the ingredients will be
processed in Canada. The drink crystals will be shipped to the United States
in 450 gram, 540 gram and 900 gram pouches or tins for sale to the retail
consumer.
The applicable tariff provision for the drink crystals, if imported in
quantities that fall within the limits described in additional U.S. note 8 to
chapter 17, will be 1701.91.5400 Harmonized Tariff Schedules of the United
States (HTS), which provides for cane or beet sugar and chemically pure sucrose
in solid form: other...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...described in
additional U.S. note 8 to chapter 17 and entered pursuant to its provisions.
The general rate of duty will be 6 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 1701.91.5800, HTS, and dutiable at the rate of
35.9 cents per kilogram plus 5.4 percent ad valorem.
If the sugar is grown and refined in the United States, and the other
ingredients are from the United States and Canada, the drink crystals, being
wholly obtained or produced entirely in the territory of the United States and
Canada, will meet the requirements of HTSUSA General Note 12(b)(i), and, if
classifiable under subheading 1701.91.5400, HTS, will be entitled to a free rate
of duty under the NAFTA upon compliance with all applicable laws, regulations,
and agreements.
If the sugar is grown in non-NAFTA countries, the drink crystals will not
qualify for preferential treatment under the NAFTA because the non-originating
sugar used in the production of the good will not undergo the change in tariff
classification required by General Note 12(t)/17, HTSUSA.
This ruling is being issued under the provisions of Part 177 of the Customs
Regulations (19 C.F.R. 177).
This ruling letter is binding only as to the party to whom it is issued and
may be relied on only by that party.
Your inquiry also requests a ruling on the country of origin marking
requirements for imported articles which are processed in a NAFTA country prior
to being imported into the U.S. A marked sample was 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.
The imported drink crystals are processed in a NAFTA country "Canada" prior
to being imported into the U.S. Since, "Canada" 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 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 situation were the sugar is grown and refined in the United States, we
find that the imported 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
drink crystals for Customs duty purposes and for the tariff rate quota
allocation is "Canada".
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations
to the situations were the sugar is grown in non-
NAFTA countries, the drink crystals are goods of the countries where the sugar
is grown, noting Section 102.11(b)(1).
This ruling is being issued under the provisions of Part 181 of the Customs
Regulations (19 C.F.R. Part 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 John Maria at 212-466-5730.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division