CLA-2-10:OT:RR:E:NC:2:231
Mr. Thomas W. Singer
Singer Consulting, Inc.
9013 S. Military Rd.
Niagara Falls, NY 14304
RE: The tariff classification, country of origin, and status under the North American Free Trade Agreement (NAFTA), of U.S.-origin rice that has been processed in Canada; Article 509
Dear Mr. Singer:
In your letter dated September 2, 2009, submitted on behalf of Dainty Foods (Windsor, Ontario, Canada), you requested a ruling on the status of certain rice from Canada under the NAFTA.
In scenario #1a, “rough (brown) rice,” grown in the United States, will first be shipped to Canada. As received in Canada, this rice will be in de-husked, bran-on condition, not parboiled. In Canada, the rice will be milled so as to remove the bran layer from the kernels, thereby producing white grains known as milled rice. A sorting operation will then separate the whole, milled kernels from the broken ones and from the bran. The whole, milled kernels (which an accompanying annotated photo indicates to be the long-grain type) will then be exported to the United States. You refer to this product as “whole clean rice.”
The applicable tariff provision for the unbroken, long-grain milled rice (“whole clean rice”) of scenario 1a will be 1006.30.9010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for rice: semi-milled or wholly milled rice, whether or not polished or glazed: other: long grain. The general rate of duty will be 1.4 cents per kilogram.
In scenario #1b, white rice grown and milled in the United States will first be shipped to Canada. In Canada, this rice will merely undergo a sorting process. The sorting process will entail “sending the milled rice over shakers and screens.” (The whole kernels stay on top of the screens and the broken ones fall through.) The whole kernels, again known as “whole clean rice,” will then be exported back to the United States.
Provided the documentary requirements of 19 CFR 10.1 are satisfied, the applicable tariff provision for the U.S. whole clean rice of scenario 1b, returned to the United States after sorting in Canada, will be 9801.00.1095, HTSUS, which provides 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: other: other. The rate of duty will be free.
In scenario #2, rough (brown) or milled (white) rice, grown, parboiled, husked and (in the case of the white type) milled in the United States, will be shipped to Canada. In Canada, this rice will be steamed, then pressed to slightly crack the kernels, thus allowing them to absorb moisture. The rice will then be dried with a high-powered heater. The resulting product, known as “Time-Wise Rice,” will then be ready for packaging and subsequent export to the United States. You state that the “Time-Wise” steaming/pressing/drying process done in Canada serves to partially cook the rice, thereby shortening the required cooking time from 25 to 10 minutes (for the white type), or from 45 to 15 minutes (for the brown type).
The applicable subheading for the “Time-Wise Rice” (white or brown) of scenario 2 will be 1904.90.0140, HTSUS, which provides for cereals (other than corn (maize)) in grain form, … pre-cooked or otherwise prepared, not elsewhere specified or included: other: other. The general rate of duty will be 14 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/.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the 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, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or …
Based on the facts provided, all the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(i). When entered under subheading 1006.30.9010 or 1904.90.0140, HTSUS, the goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
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.
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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).
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, provides that a “good of a NAFTA country” may be marked with the name of the country of origin in English, French or Spanish.
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.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the imported “whole clean rice” products of scenarios 1a and 1b are goods of the United States for marking purposes. (Note, however, that under the NAFTA Preference Override, the country of origin for entry/duty purposes will be Canada for goods of scenario 1a entered under subheading 1006.30.9010, HTSUS.) Goods of scenarios 1a and 1b are therefore not required to be marked with their country of origin. (Note that the question of whether they may be marked with a phrase such as “Product of U.S.A.” is under the jurisdiction of the Federal Trade Commission, which may be contacted for advice at 6th & Pennsylvania Avenue, N.W., Washington, D.C. 20580.) Furthermore, we find that the products of scenario 2 (“Time-Wise Rice,” brown and white) are goods of Canada for marking purposes.
This merchandise is subject to The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling FDA at 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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 Nathan Rosenstein at (646) 733-3030.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division