CLA-2-04:RR:NC:2:231 K81280
Mr. John Peterson, Esq.
Neville, Peterson LLP
80 Broad Street, 34th Floor
New York, NY 10004
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of whipped cream from Canada; Article 509
Dear Mr. Peterson:
In your letter, dated November 17, 2003, on behalf of your client, ConAgra Foods, Inc., Downer’s Grove, IL, you requested a ruling on the status of whipped cream from Canada under the NAFTA.
The merchandise, two whipped cream toppings, are described as having the following composition:
Reddi-wip® 11 Percent Light Whipped Cream is whipped cream in aerosol spray cans. The ingredients are 37.07 percent water, 30.86 percent cream (36 percent), 14.57 percent liquid sugar, 6.40 percent corn syrup, 5.67 percent nonfat dry milk, 1.50 percent Raftalin ST, 1.25 percent Opta 31, 1.20 percent whey, 1.00 percent sodium caseinate, 0.33 percent Lactem P 22 K, 0.08 percent Durafax 80 (Poly 80), 0.05 percent Gelcarin GP 359, and 0.02 percent vanilla cream flavoring. The non dairy ingredients are said to act as emulsifiers and stabilizers. The vanilla flavor, in the form of either a white powder or liquid, is added, in the quantity indicated, as a flavor and aroma component. All ingredients are products of the United States or Canada.
Reddi-wip® Fat Free Whipped Cream is whipped cream in aerosol spray cans. The ingredients are 63.65 percent liquid, whole milk, 8.20 percent liquid sugar, 7.68 percent dextrose, 7.27 percent corn syrup, 5.24 percent cream (42 percent), 3.07 percent Raftalin ST, 2.34 percent nonfat dry milk, 1.02 percent Opta, 0.72 percent Avicel, 0.37 percent stabilizer, 0.20 percent titanium dioxide, 0.07 percent sodium phosphate, 0.05 percent Durfax 80 (Poly 80), 0.04 percent vanilla cream powder, 0.02 percent Centrolex F, 0.02 percent Danisco 3240 flavoring, 0.01 percent Gelcarin SP, and 0.01 percent guar gum. The non dairy ingredients are said to function as emulsifiers and stabilizers. The vanilla flavor, in the form of either a white powder or liquid, is added, in the quantity indicated, as a flavor and aroma component. All ingredients are products of the United States or Canada.
The applicable subheading for Reddi-wip® “Light” and “Far Free” Whipped Creams, if entered under quota, will be 0402.99.7000, Harmonized Tariff Schedule of the United States (HTS), which provides for milk and cream, concentrated or containing added sugar or other sweetening matter, other, other, other, described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions. The general rate of duty will be 17.5 percent ad valorem. In 2004, the rate of duty will remain the same.
These goods, when entered in subheading 0402.99.7000, HTS, being wholly obtained or produced entirely in the territory of Canada and/or the United States, will meet the requirements of HTSUSA General Note 12(b)(i), and will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
The applicable subheading for these whipped cream products, if entered outside the quota, will be 0402.99.9000, HTS, which provides for milk and cream, concentrated or containing added sugar or other sweetening matter, other, other, other, other. The rate of duty will be 46.3 cents per kilogram, plus 14.9 percent ad valorem. In 2004, the rate of duty will remain the same. In addition, products classified in subheading 0402.99.9000, HTS, are subject to additional safeguard duties based on their value, as described in subheadings 9904.04.50 – 9904.05.01. However, U.S. Note 1, subchapter IV in chapter 99 states, “Goods of Canada or Mexico imported into the United States shall not be subject to any of the provisions, duties or limitations of this subchapter.” Accordingly, if a product of Canada, the safeguard duties will not apply.
The immediate packing for these products consists of metal cans, valves and caps of U.S. origin, and nitrous oxide gas (a propellant) of Canadian origin. In your submission of November 17th, you state that the cans and valves are exported in their finished condition. In Canada, the valves are assembled to the can by mechanical crimping. The mechanical crimping is said to create a double seam seal between the valve and the can. You ask whether the cans and valves qualify for entry as American Goods Returned.
With regard to treatment of these components, it is noted that Customs, in HQRL 553104, dated February 6, 1985, has previously ruled on certain U.S. produced two-piece metal cans, coated inside and out with a sealing compound on the lid component’s rim, that were exported to Thailand empty and there filled with tuna. The filled cans were then “sealed by a closing machine which, by means of pressure-applying rollers, bends the lip of the lid component around the flange on the can’s one piece cylindrical wall and bottom component. The sealant compound on the lid’s rim further insures a hermetic seal.” The ruling stated that “[w]e do not consider the filling, sealing, and labeling of these two-piece cans to constitute either an advancement in value or improvement in condition which would remove them from the scope and intent of the cited General Headnote provision and disqualify the U.S.-produced cans from duty-free treatment upon their return, provided that the requisite proof of their origin meets with the approval of the Customs officials at the port of entry. Accordingly, the cost of the cans is deductible from the dutiable value of the entered merchandise.” Based on the foregoing, in our opinion, the simple crimping process required to close the finished cans and valves would not constitute an advance in value or improvement in condition in these packing materials.
Accordingly, these finished cans, valves and caps may be entered in subheading 9801.00.10, HTSUS, free of duty, as 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, provided that all applicable requirements and regulations are met.
Importations of milk and milk products are subject to import regulations administered by various U.S. agencies. Requests for information regarding applicable regulations administered by the U.S. Food and Drug Administration may be addressed to that agency at the following location:
Food and Drug Administration
Division of Import Operations and Policy
5600 Fishers Lane
Rockville, MD 20857
Requests for information regarding applicable regulations administered by the U.S. Department of Agriculture may be addressed to that agency at the following location:
A.P.H.I.S., Veterinary Services
Federal Building, Room 756
6505 Belcrest Road
Hyattsville, MD 20782
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR 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 Thomas Brady at (646) 733-3030.
Sincerely,
Robert B. Swierupski
Director
National Commodity
Specialist Division