CLA-2-14:OT:RR:NC:N2:235
Mr. Robert Gaydo
Deringer Logistics Consulting Group
6930 Metroplex Drive
Romulus, MI 48174
RE: The tariff classification of Coco Peat from Canada
Dear Mr. Gaydo:
In your letter dated March 11, 2009, on behalf of Envirotex, you requested a tariff classification ruling. In your letter you also request a determination on the Country of Origin for the product. The samples which you submitted were examined and disposed of. Information received from you and the Import Specialist in Detroit, indicate that you have had discussions with the Department of Agriculture regarding fumigation requirements for this product. We will not address that issue in this ruling and suggest you contact the Department of Agriculture for a written ruling on that issue.
The subject product, “Coco Peat” is comprised of used coconut shell coir pith. The pith is originally imported into Canada from Sri Lanka. The coconut shell coir pith is in the form of condensed blocks when imported into Canada. You indicate that the product has phytosanitary certificates and that the containers are fumigated prior to export from Sri Lanka. The coconut shell coir pith is used in Canada as a growth medium for hydroponic plants. After the growing season the plants are removed and the bags of coconut shell coir pith are collected, filtered and any plastic bags and plant pieces are removed. The coconut shell coir pith is then sold and exported to the United States for use in potting soil. There is no chemical, structural or physical change in the coir pith between the export from Sri Lanka, and the ultimate importation into the United States. No change in classification or substantial transformation occurs.
The applicable subheading for the “Coco Peat” will be 1404.90.9090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Vegetable products not elsewhere specified or included: Other: Other… Other. The rate of duty will be Free.
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 World Wide Web at http://www.usitc.gov/tata/hts/.
Your letter also requests a determination of Country of Origin for the Coco Peat.
In your letter you suggest that you believe the country of origin should be determined based on substantial transformation, de minimis value, or divestiture considerations of the imported product.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that:
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if-- (i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or (ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that-- (A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, … 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 to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR 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.
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.
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).
Based on the facts provided, the “Coco Peat” described above does not qualify for NAFTA preferential treatment, because the product fails to meet the requirements of HTSUS General Note 12(b) and 12(t)/14, noting GN 12(f)(v). The product’s Country of Origin cannot be determined by NAFTA regulations cited above.
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 the meaning of Part 134. A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing. The tariff classification of the imported product does not change between export from Sri Lanka and importation into the United States. The article being imported into the United States is essentially the same product as exported from Sri Lanka. As no substantial transformation has occurred, and the product does not meet the requirements for Tariff Shift as set out in General Note 12(b), we find that based on the regulations cited above the Cocoa Peat is a product of Sri Lanka for country of origin and marking purposes.
These goods may be subject to regulations or restrictions administered by the U.S. Department of Agriculture, Animal and Plant Health Division (APHIS), and Agricultural Marketing Service (AMS). You may contact these agencies regarding possible applicable regulations at the following locations: U.S. Department of Agriculture APHIS Plant Protection and Quarantine Permit Unit 4700 River Road, Unit 136 Riverdale, MD 20737-1236 Telephone number: 877-770-5990 Marketing Order Administration Branch Fruit and Vegetable Programs USDA AMS 4700 River Road, Unit 155, Suite 5D03 Riverdale Park, MD 20737-1227 Telephone: (301) 734-5246 FAX: (301) 734-5275
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 Paul Hodgkiss at (646) 733-3046.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division