CLA-2-29:OT:RR:E:NC:2:238
Mr. Mark D. Pinchok
Bayer Corporation
100 Bayer Road
Pittsburgh, PA 15205
RE: The tariff classification of Iprodione Technical (CAS-36734-19-7) from France; the tariff classification and country of origin of, and applicability of subheading 9801.00.2500 to, Rovral® Brand 4 Flowable Fungicide returned to the United States after exportation to Canada
Dear Mr. Pinchok:
In your letter dated February 23, 2009, you requested a tariff classification ruling on behalf of your client, Bayer CropScience LP (BCS) for both referenced products. You also inquired as to the country of origin for marking purposes of the Rovral®, and as to the applicability of subheading 9801.00.2500 in certain situations.
The first product, Iprodione Technical, is a fungicide used as the active ingredient in formulated fungicide products. It is known by the chemical name 3-(3,5-dichlorophenyl)-N-(1-methylethyl)-2, 4-dioxo-1-imidazolidinecarboxamide. The second product, Rovral® Brand 4 Flowable Fungicide, is a formulation of c. 42 percent Iprodione with application adjuvants. It is formulated for direct field end-use on a number of horticultural and row crops to stop fungi at several phases of development, including spore germination, mycelia growth and spore production.
The applicable subheading for the Iprodione Technical in bulk form will be 2933.21.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Heterocyclic compounds with nitrogen hetero-atom(s) only: Compounds containing an unfused imidazole ring (whether or not hydrogenated) in the structure: Hydantoin and its derivatives." The rate of duty will be 6.5 percent ad valorem. However, Iprodione Technical is eligible for temporary reduced rate of duty under subheading 9902.01.51, HTSUS, which provides for "Iprodione (3-(3,5-dicholorophenyl)-N-(1-methylethyl)-2,4-dioxo-1-imidazolidinecarboxamide) (CAS No. 36734–19–7) (provided for in subheading 2933.21.00)." The rate of duty will be 2 percent ad valorem for merchandise entered on or before 12/31/2009.
The applicable subheading for the Rovral® Brand 4 Flowable Fungicide will be 3808.92.1500, HTSUS, which provides for “Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulfur-treated bands, wicks and candles, and flypapers): Fungicides: Containing any aromatic or modified aromatic fungicide: Other." The rate of duty will be 6.5 percent ad valorem.
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/.
This merchandise may be subject to the requirements of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), which are administered by the U.S. Environmental Protection Agency, Office of Pesticide Programs. Information on the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) can be obtained by contacting the National Pesticide Information Center (NPIC) at 1-800-858-7378, or by visiting the EPA website at www.epa.gov.
Regarding the country of origin of the Rovral® Brand 4 Flowable Fungicide, you state that BCS formulates the product in the United States by combining French Iprodione active ingredient with inert ingredients (application adjuvants). There is no other active ingredient pesticide added to the formulation, and no chemical reaction occurs during the formulation process. The final product is then packaged in the United States for retail sale.
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. The regulations implementing the requirements and exceptions to 19 U.S.C. §1304 are set forth in Part 134, Customs & Border Protection Regulations (19 C.F.R. Part 134). Section 134.1(b), Customs & Border Protection Regulations (19 C.F.R. §134.1(b)), defines the 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin."
A substantial transformation occurs when articles lose their identity and become articles having a new name, character or use. United States v. Gibson-Thomsen Co., 27 CCPA 267 at 270 (1940), National Juice Products v. United States, 10 CIT 48, 628 F. Supp. 978 (CIT 1986).
In the instant case, we find that the formulation of the Iprodione into a field-ready product involves merely a dilution and blending of the single active ingredient. The processing in the United States does not transform the imported ingredient. It simply facilitates its use. This scenario has been addressed in numerous court and administrative decisions. We find that the country of origin of the finished fungicide will be the country of origin of the active ingredient, namely France.
Regarding the applicability of provision 9801.00.2500 to the Rovral® under certain circumstances, you state that BCS exports Rovral® to Canada. If quality or field performance issues arise, Rovral® is imported back into the United States by BCS for reworking.
Dutiable merchandise imported and afterwards exported, even though duty thereon may have been paid on the first importation, is liable to duty on every subsequent importation into the Customs territory of the United States, unless exempt by law. Section 141.2, Customs Regulations (19 CFR 141.2). One such exemption is set out in subheading 9801.00.2500, HTSUS, which provides for the duty-free entry of “Articles, previously imported, with respect to which the duty was paid upon such previous importation if (1) exported within three years after the date of such previous importation, (2) reimported without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, (3) reimported for the reason that such articles do not conform to sample or specification, and (4) reimported by or for the account of the person who imported them into, and exported them from the United States.”
Articles satisfying each of the above requirements are entitled to duty-free treatment, assuming compliance with the documentary requirements of section 10.8a, Customs Regulations (19 CFR 10.8a). This regulation contains the same criteria found in subheading 9801.00.2500, HTSUS. The documents required are declarations by the person abroad who received and is returning the merchandise and by the owner or importer (or consignee or agent). Each declaration must include a description of the articles, and the latter declaration must set forth information relative to the original importation of the merchandise, such as port and date of importation, entry number, and name and address of the importer at the time the duty was paid. (19 CFR 10.8a(b)). However, the District Director may waive the documentary requirements upon satisfaction that the requirements of that subheading are met. 19 CFR 10.8a(c).
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 Harvey Kuperstein at (646) 733-3033.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division