CLA-2-20:OT:RR:NC:2:228
Mr. Ryan Albright
Covered Bridge Potato Chip Company
35 Alwright Ct.
Waterville, Carleton Co.
New Brunswick, Canada E7P 0A5
RE: The tariff classification, country of origin marking, and status under the North American Free Trade Agreement (NAFTA), of potato chips from Canada; Article 509
Dear Mr. Albright:
In your letter dated August 13, 2009, and an undated letter received on September 16, 2009 you requested a ruling on the status of potato chips from Canada under the NAFTA.
Images of the package labels were provided with your August letter; ingredients breakdowns and samples accompanied your second letter. The samples were examined and disposed of. Covered Bridge brand Old Fashioned Kettle Style Potato Chips are prepared in three flavors: sea salt, sea salt & cracked pepper, and smokin’ sweet BBQ. Each product is composed of russet potatoes, canola oil, and, depending on flavor, sea salt, spice, and/or barbeque seasoning. The russet potatoes, spices, and seasonings are products of Canada, the oil and sea salt are products of the United States. In Canada, sliced potatoes are fried in oil, flavorings are added, and the chips are packaged in a sealed, polypropylene bag containing 7 ounces, net weight, placed inside an open burlap bag. A paper tag stapled to the burlap bag identifies the flavor and the ingredients.
One side of the burlap bag is printed with the name of the product (i.e., Covered Bridge Old Fashioned Kettle Style Potato Chips), but not the flavor, a line drawing of a covered bridge, and the net weight. The back of the burlap bag is printed with a brief story about the company in French and English, a product freshness guarantee, and the name, address, email and telephone number of the Covered Bridge Potato Chip Company. A line on the bottom of the burlap bag states “nutrition facts inside bag.” The sealed bag containing the chips, inside the open burlap bag, is printed on one side with the name of the product, including the flavor, and the net weight. The back panel is divided into two columns. One column provides a brief story about the company in French and English, the freshness guarantee, and a telephone number for consumer questions or comments. The second column bears the Nutrition Facts box, a list of ingredients, the name, address, and email of the company, and the statement “made in Canada from domestic and imported ingredients.”
The applicable tariff provision for the potato chips will be 2005.20.0020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen…potatoes…potato chips. The general rate of duty will be 6.4 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; …
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(i). 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 potato chips are goods of Canada for marking purposes. The samples, marked as described above, are conspicuously, legibly and permanently marked in satisfaction of the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
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 Stanley Hopard at (646) 733-3029.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division