CLA-2-38:OT:RR:NC:2:235
Mr. Charles W. Lovallo
Innovations Solutions Now Inc.
2061 Piercy Avenue
Sidney, v812k6, Canada
RE: The tariff classification of a fuel additive and a fuel substitute from Canada
Dear Mr. Lovallo:
In your letter dated November 6, 2009, you requested a tariff classification ruling.
In your request letter and in our follow up phone conversation, you indicated that the instant product will be imported into the United States from Canada in one of the two formulations listed below.
The first formulation will be a fuel additive that will consist of 29 percent ethanol, 13 percent butanol and 3 percent cineole. You indicate that the source country for the raw materials will be primarily from Ecuador. The ingredients indicated above will be derived from mixed crops of sweet sorghum biomass and the leaves of eucalyptus trees. The derivation process of the main constituents will utilize various enzymatic processes. The ethanol, butanol and cineole are shipped to Canada where they will be simply blended to arrive at the base fuel additive.
The second formulation, a fuel substitute, will consist of the above fuel additive with the addition of 55 percent Naphtha. In our phone conversation, you contend that the product with the added Naphtha is not an additive but a fully functional fuel substitute. The fuel substitute will be blended with gasoline in the United States to produce the final product. The finished article will consist of gasoline with 10 percent ethanol content.
The applicable subheading for the fuel additive without the addition of Naphtha will be 3811.90.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Antiknock preparations, oxidation inhibitors, gum inhibitors, viscosity improvers, anti-corrosive preparations and other prepared additives, for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils: Other." The rate of duty will be 6.5 percent ad valorem.
The applicable subheading for the fuel substitute containing 55 percent Naphtha will be 3824.90.4500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included (con.): Mixtures that are in whole or in part of hydrocarbons derived in whole or in part from petroleum, shale oil or natural gas.” Other: Other: The rate of duty will be 6.5 percent ad valorem.
You also requested a determination as to whether the formulations as imported would be eligible for preferential treatment under the North Atlantic Free Trade Agreement (NAFTA).
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
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
Based on the facts provided, the goods described above do not qualify for NAFTA preferential treatment, because they will not meet the requirements of HTSUS General Note 12(b)(t). The merchandise does not qualify for preferential treatment under the NAFTA because the non- originating ingredients will not undergo the change in tariff classification described in General Note 12(t)/38.11 or 12(t)/38.24.
This ruling letter has not addressed the Regional Value Content (RVC) of the subject goods. If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, provide the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)), to U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177, along with a copy of this letter.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
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 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 regarding Heading 3811 and National Import Specialist Richard Dunkel at (646) 733-3032 regarding Heading 3824.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division