CLA-2 RR:TC:FC 959946K
Mr. Roberto Castro Genera
Nuttis Closa , S.A. De C.V.
Campeche 674
Col. Independencia
Monterrey, N.L., Mexico
RE: Request For Tariff Classification Ruling for Peanuts Of U.S.
Origin Further Processed In
Mexico and Returned; Peanut Snacks; Tariff Rate Quota
Dear Sir:
Your undated letter received on October 11, 1996, at the
Office of the Director, National Commodity Specialist Division,
New York, New York, requesting a tariff classification ruling
concerning certain peanut products, has been referred to our
office for a direct response. Our decision follows.
FACTS:
Raw peanuts of U.S. origin will be exported to a Mexican
bonded warehouse. In the Mexican bonded warehouse, the peanuts
will be deposited into a rotating coating machine where wheat
flour and a sugar syrup are added. Once coated and dried, the
peanuts are roasted and then coated with a flavoring such as
lemon, chili, etc., and returned to the United States as various
peanut snack products. Samples were submitted.
You requested exemptions from any tariff rate quotas under
the Harmonized Tariff Schedule of the United States (HTSUS).
ISSUE:
The issue is what is the classification of the peanuts in
there condition as imported into the United States and are there
any exemptions from tariff rate quotas for this merchandise.
LAW AND ANALYSIS:
General Note, 2, HTSUS, defines the "term 'Customs Territory
of the United States', as used in the tariff schedule, includes
only the States, the District of Columbia and Puerto Rico".
Section 101.1 of the Customs Regulations, defines, in part, the
term "exportation" as meaning "a severance of goods from the mass
of things belonging to this country with the intention of uniting
them to the mass of things belonging to some foreign country."
General Note 1, HTSUS, provides in part, with certain exceptions
not applicable here, that "all goods provided for in this
schedule and imported into the customs territory of the United
States from outside thereof...are subject to duty or exempt
therefrom..."
A Mexican bonded warehouse is not part of the customs
territory of the United States. The peanuts exported from the
United States to a Mexican bonded warehouse and there processed
into roasted and flavored peanuts have merged with the mass of
things belonging to a foreign country and the peanuts are subject
to the tariff schedule upon importation into the customs
territory of the United States. We have no authority to waive
the provisions of the tariff schedule.
Heading 9801.00.10, HTSUS, provides for a general free rate
of duty for products of the United States when returned after
having been exported, without having been advanced in value or
improved in condition by any process of manufacture or other
means while abroad. Raw U.S. peanuts as described above that are
exported to a foreign country where they are roasted, flavored ,
and processed into finished peanut snacks are not eligible as
products of the United States that are returned after being
exported, without having been advanced in value or improved in
condition by any process of manufacture or other means while
abroad.
Heading 2008, HTSUS (1997), provides for fruit, nuts and
other edible parts of plants, otherwise prepared or preserved,
whether or not containing added sugar or other sweetening matter
or spirit, not elsewhere specified or included. Subheading
2008.11, HTSUS, at the six digit level, specifically provides for
prepared or preserved peanuts (ground-nuts), whether or not
containing added sugar or other sweetening matter or spirit, not
elsewhere specified or included. Subheading 2008.11, has
further breakouts at the eight digit levels, subheadings
2008.11.02 through subheadings 2008.11.60, containing tariff rate
quotas for peanut butter and paste,
blanched peanuts, other prepared or preserved peanut products as
follows:
RATES OF DUTY (1997)
General Special
Column 2
2008.11 Peanuts (ground-nuts):
Peanut butter and paste:
2008.11.02 Described in general
note 15 of the tariff
schedule and entered
pursuant to its provisions....
0.6›/kg Free (E,IL,J,MX) 15›/kg
0.6›/kg (CA)
(s) 1/
2008.11.05 Described in additional
U.S. note 5 to this
chapter and entered
pursuant to its provisions.....
0.6›/kg Free (E,IL,J) 15›/kg
0.6›/kg
(CA)(s)
1/ 2008.11.15 Other
2/....................... 143.4% 3.9›/kg (MX)
155%
Blanched peanuts:
2008.11.22 Described in general
note 15 of the
tariff
schedule and
entered
pursuant to its
provisions..... 6.6›/kg Free (E,IL,J,MX) 15›/kg
0.6›/kg (CA)
2008.11.25 Described in additional
U.S. note 2 to
chapter 12
and entered
pursuant to
its
provisions................. 6.6›/kg Free (E,IL,J) 15›/kg
0.6›/kg
(CA)
2008.11.35 Other 3/....................... 143.4% See 9906.20.03- 155%
9906.20.05 (MX)
Other:
2008.11.42 Described in general
note 15 of the
tariff
schedule and
entered
pursuant to its
provisions.... 6.6›/kg Free (E,IL,J,MX) 15›/kg
0.6›/kg (CA)
2008.11.45 Described in additional
U.S. note 2 to
chapter 12
and entered
pursuant to
its
provisions................. 6.6›/kg Free (E,IL,J)
15›/kg
0.6›/kg (CA)
2008.11.60 Other 3/.......................
143.4% See 9906.20.03- 155%
9906.20.05 (MX)
1/ Rate suspended. See General Note 3(c)(iv).
2/ See subheadings 9904.20.01-9904.20.10.
3/ See subheadings 9904.12.01-9904.12.19.
The roasted and flavored peanuts, as imported, are
classified as other peanut products prepared or preserved in
subheadings 2008.11.45, HTSUS, a tariff rate quota provision as
described in U.S. note 2, to Chapter 12 and entered pursuant to
its provisions, or, 2008.11.60,
HTSUS, an over the tariff rate quota rate provision. See above.
Additional U.S. Note 2(b) to Chapter 12, HTSUS, provides as
follows.
The aggregate quantity of peanuts entered under subheadings
1202.10.40, 1202.20.40, 2008.11.25 and 2008.11.45 during the
12-month period from April 1 in any year through the
following March 31, inclusive shall not exceed the
quantities specified herein (articles the product of Mexico
shall not be permitted or included under this quantitative
limitation and no such articles shall be classifiable
therein).
Quantity
(kg)
Entered in the 12-month period from
April 1 in
any year to the
following March 31, inclusive
Argentina 29,853
Other countries or areas 5,043
The note specifically states that articles from Mexico shall
not be permitted or included under the quantitative limitation
and no such article shall be classified in subheading 2008.11.45,
HTSUS. Accordingly, the prepared peanut products are classified
in subheading 2008.11.60, HTSUS.
General Note 12(s)(I)(A) and (B), North American Free Trade
Agreement, HTSUS, states as follows;
(s) Exceptions to Change in Tariff Classification Rules.
(I) Agricultural and horticultural goods grown in the
territory of a NAFTA party shall be treated as originating in the
territory of that party even if grown from seed, bulbs,
rootstock, cuttings, slips or other live parts of plants imported
from a non-party to the NAFTA, except that goods which are
exported from the territory of Mexico and are provided for in--
(A) heading 1202, if the goods were not harvested
in the territory of Mexico,
(B) subheading 2008.11, if any material provided
for in heading 1202 used in the production of such goods was not
harvested in the territory of Mexico, or
(C) tariff items 1806.10.43, 1806.10.45,
1806.10.55, 1806.10.65, 1806.10.75, 2106.90.42, 2106.90.44 or
2106.90.46, if any material provided for in subheading 1701.99
used in the production of such goods is not a qualifying good,
shall be treated as nonoriginating goods. The
term "qualifying good" means an originating good that is an
agricultural good, except that in determining whether such good
is an originating good, operations performed in or materials
obtained from Canada shall be
considered as if they were performed in or obtained from a
non-party to the NAFTA. (Emphasis
added.)
Accordingly, the peanut products do not qualify as
originating goods for purposes of the special rate of duty for
subheading 2008.11.60, HTSUS.
HOLDING:
Prepared roasted and flavored peanut products produced in
Mexico with peanuts not harvested in Mexico, are classified as
other prepared or preserved peanut products in subheading
2008.11.60, HTSUS, and subject to the 1997 general rate of duty
of 143.4 percent ad valorem.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division