OT:RR:CTF:VS H312974 RMC
Steve Clyde
Axxess International, Inc.
3041 Commerce Dr., Suite A-1
Fort Gratiot, MI 48059
RE: Tariff Classification and USMCA Eligibility of Cranberry Syrup Imported from Canada
Dear Mr. Clyde:
This is in response to your correspondence dated August 3, 2020, in which you request a ruling on behalf of your client Fruit d’Or. Your ruling request concerns the tariff classification of Fruit d’Or’s cranberry syrup and the eligibility of that product for duty-free treatment under the United States-Mexico-Canada Agreement (“USMCA”). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for response.
FACTS:
Fruit d’Or, based in Villeroy, Quebec, Canada, is involved in the growing and processing of organic berries. This ruling request concerns a product described as a “cranberry syrup.” The technical specifications provided state that the cranberry syrup will contain 97.4% liquid sugar and 2.6% cranberry juice. The brix value of the cranberry syrup will be between 65 and 67, with a pH level of 4.00-6.50. You state that U.S. food manufacturers will use the finished product to produce dried cranberries.
Production of the cranberry syrup will occur at Fruit d’Or’s facilities in Canada. Production begins with non-originating granulated raw sugar from Brazil, which you state is classified in subheading 1703.13.5000, Harmonized Tariff Schedule of the United States (“HTSUS”). A supplier also based in Canada will process the raw sugar into 100% liquid sucrose of 1702.90.5800, HTSUS. This process will involve adding water and a trace amount of originating calcium hydroxide to the sugar, heating it to the correct temperature, and filtering the mixture. The supplier will then supply the liquid sugar to Fruit d’Or to produce the final product.
Fruit d’Or will produce the finished cranberry syrup by mixing the liquid sugar with originating concentrated cranberry juice. You state that the cranberry syrup will be classified in subheading 2106.90.9897, HTSUS. After production is complete, Fruit d’Or will place the cranberry syrup into bulk 1000-liter containers for importation into the United States.
ISSUES:
Whether the cranberry syrup will be properly classified in subheading 2160.90.9897, HTSUS.
Whether the cranberry syrup will be eligible for USMCA preferential tariff treatment when it is imported from Canada into the United States.
LAW AND ANALYSIS:
Classification
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
In understanding the language of the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
ENs to heading 2106 provide in relevant part as follows:
Provided that they are not covered by any other heading of the Nomenclature, this heading covers:
Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption. Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.)…
In view of the “not elsewhere specified or included” text in heading 2106, HTSUS, before classifying the product under heading 2106, HTSUS, we must first determine whether it can be classified in any other heading. The cranberry syrup at issue will contain liquid sugar of Chapter 17 (specifically, of 1702.90.5800, HTSUS) and concentrated cranberry juice of Chapter 20 (specifically, of 2009.81.0000, HTSUS). We must therefore consider whether the finished product is classified in either Chapter 17 or Chapter 20.
Heading 1702 provides for “other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar syrups not containing added flavoring or coloring matter; artificial honey, whether or not mixed with natural honey; caramel.” Here, because the cranberry syrup will consist of liquid sucrose flavored with cranberry juice concentrate, it will not be classifiable in heading 1702.
Heading 2009 provides for “fruit juices (including grape must) and vegetable juices, not fortified with vitamins or minerals, unfermented and not containing added spirit; whether or not containing added sugar or other sweetening matter.” The EN to heading 2009 states, in part, that “the juices of this heading may be concentrated” . . . and:
Provided they retain their original character, the fruit or vegetable juices of this heading may contain substances of the kinds listed below, whether these result from the manufacturing process or have been added separately :
(1) Sugar.
(2) Other sweetening agents, natural or synthetic, provided that the quantity added does not exceed that necessary for normal sweetening purposes . . . .
Accordingly, heading 2009 includes concentrated juice with added sugar but only if the product retains the character of the original fruit or vegetable juice. Here, the finished product will be overwhelmingly composed of liquid sugar (97.4%). Only 2.6% of the product will be attributable to the cranberry juice concentrate. Because the finished cranberry syrup will not retain the original character of cranberry juice, it will not be classifiable in heading 2009.
Heading 2106, HTSUS, provides for “food preparations not elsewhere specified or included.” Food preparations of heading 2106 are generally considered to be mixtures of food ingredients to be used in or with other foods. This is illustrated by EN 2106, which lists several examples of goods composed of a mixture of ingredients. The product at issue is a cranberry syrup consisting of a mixture of pure sucrose syrup and concentrated cranberry juice, which is intended for use in the production of dried cranberries. We therefore find that it is a “preparation consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption” within the meaning of EN 2106.
Based on the foregoing, the cranberry syrup will be classified under heading 2106, and specifically under 2106.90.9897, HTSUS, which provides for “Food preparations not elsewhere specified or included: other: other: other: other: other: other: other: other: containing sugar derived from sugar cane and/or sugar beets.”
Eligibility for USMCA Preferential Tariff Treatment
The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (GN) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or
…
Here, the cranberry syrup will be produced in Canada using originating and non-originating materials. Therefore, the merchandise will not qualify as originating pursuant to GN 11(b)(i) or (ii). We must therefore consider whether the merchandise qualifies as originating pursuant to GN 11(b)(iii).
As noted above, the cranberry syrup will be classified in subheading 2106.90.9897, HTSUS. The applicable rule of origin in GN 11(o)/21.15 requires “a change to heading 2106 from any other chapter.”
In this case, the only non-originating material used in the production of the merchandise is the liquid sugar of 1702.90.5800, HTSUS. As that material is classified outside chapter 21, the merchandise will qualify as originating goods pursuant to GN 11(o)/21.15. Provided that all other requirements are met, the merchandise will be eligible for preferential tariff treatment under the USMCA when imported into the United States.
HOLDING:
Based on the information provided, the cranberry syrup will be classified in subheading 2106.90.9897, HTSUS, and will be eligible for preferential tariff treatment under the USMCA when imported into the United States from Canada.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch