CLA-2-16:OT:RR:NC:2:231
Mr. Guy Manchuk
Tri Marine International, Inc
10500 N.E. 8th Street (Ste. # 1888)
Bellevue, WA 98004
RE: The tariff classification and GSP eligibility of canned tuna from the Solomon Islands.
Dear Mr. Manchuk:
In your letter dated October 25, 2011, you requested a ruling on whether three canned tuna products imported from the Solomon Islands will be eligible for duty-free treatment under the Generalized System of Preferences (GSP).
You have outlined a scenario in which yellowfin tuna will be caught exclusively by vessels operating under the flag of the Solomon Islands. (It is assumed that the fish will be taken from either international waters or Solomon Islands’ waters.) The fish will be frozen aboard the vessels after capture. The vessels will then return to the Solomon Islands and deliver the frozen tuna to the cannery in Noro, Solomon Islands, where it will be processed into canned tuna.
All of the processing will occur at the cannery in Noro. The tuna will first be thawed, butchered and steam-cooked. Heads, tails, fins, skin, red meat and bones will then be removed, leaving tuna loins and pieces. A mechanical filler will then automatically fill metal cans with a specific quantity of tuna loins and pieces. A condiment filler will then add salt, oil, chili and/or water (depending on the product) to each can. (The oil and salt will be imported into the Solomon Islands, but the chili and water will be produced in the Solomon Islands.) The filled cans will then be fed into automatic can-sealing machinery, where ends will be attached and hermetically sealed. After being washed and inspected, the sealed cans will be transferred to autoclaves for retorting, a process that cooks the tuna again, this time to eliminate all bacteria and make the product shelf-stable and safe for human consumption. The cans will be allowed to cool, after which a labeling machine will apply a glued label to each one. The cans will then be put up in multi-can packs, cartons and shrink wrap, as necessary. (The packaging materials, including the cans, labels and cartons, will be imported into the Solomon Islands.) The cartons of canned tuna will then be loaded into 20-foot shipping containers, which will be transferred to the port for loading onto container ships for shipment to the United States.
The three versions of the product are as follows:
Canned Tuna in Soya Oil (180g net). The ingredients are tuna, soya oil and salt.
Canned Tuna in Water (180g net). The ingredients are tuna, water and salt.
Canned Tuna in Soya Oil & Chili (180g net). A can of this version was submitted to us as a representative sample. The label states that the ingredients are solid pack yellowfin tuna, vegetable oil, salt and chili.
The applicable subheading for products “A” and “C” will be 1604.14.1099, Harmonized Tariff Schedule of the United States (HTSUS), which provides for prepared or preserved fish … fish, whole or in pieces, but not minced: tunas, skipjack and bonito (Sarda spp.): tunas and skipjack: in airtight containers: in oil: other: other. The general rate of duty will be 35% ad valorem.
The applicable subheading for product “B”, if entered while the tariff-rate quota is open, will be 1604.14.2299, HTSUS, which provides for prepared or preserved fish … fish, whole or in pieces, but not minced: tunas, skipjack and bonito (Sarda spp.): tunas and skipjack: in airtight containers: not in oil: in containers weighing with their contents not over 7 kg each, and not the product of any insular possession of the United States, for an aggregate quantity entered in any calendar year not to exceed 4.8 percent of apparent United States consumption of tuna in airtight containers during the immediately preceding year, as reported by the National Marine Fisheries Service. The general rate of duty will be 6% ad valorem.
The applicable subheading for product “B”, if entered after the tariff-rate quota for subheading 1604.14.22 has filled, will be 1604.14.3099, HTSUS, which provides for prepared or preserved fish … fish, whole or in pieces, but not minced: tunas, skipjack and bonito (Sarda spp.): tunas and skipjack: in airtight containers: not in oil: other: other: other. The general rate of duty will be 12.5% 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/.
Solomon Islands is designated as a “least-developed beneficiary developing country” (LDBDC) for purposes of the Generalized System of Preferences (GSP). Within the HTSUS, goods falling in tariff subheadings having the indicator “Free (A+)” in the adjacent “Special” sub-column are those eligible for duty-free treatment when imported directly from an LDBDC under certain conditions. All three of the subheadings given above for the tuna products at issue bear this indicator.
In order to qualify for duty-free treatment under “GSP (A+),” merchandise imported directly from a designated LDBDC into the customs territory of the United States must:
(i) be the growth, product or manufacture of the designated LDBDC, and
(ii) the sum of (1) the cost or value of the materials produced in the LDBDC … plus (2) the direct costs of processing operations performed in such LDBDC … must be not less than 35 percent of the appraised value of such merchandise at the time of its entry into the customs territory of the United States.
In the present case, we find that the canned tuna goods are the growth, product or manufacture of Solomon Islands. With respect to the “cost or value of material produced,” you have provided figures indicating that the tuna portion alone (i.e., not including added ingredients, cans and other packing materials) will, in each of the three versions, account for 38.9% of the estimated appraised value. With regard to the “direct costs of processing operations,” you have stated that cannery costs (consisting of utilities, labor and overhead) will collectively account, in each version, for 18.2% of the estimated appraised value. Since direct costs of processing generally must be allocable to the specific merchandise, it is not clear that the entire 18.2% can properly be included within such costs here. Nevertheless, it is evident that the pertinent sum of the material and processing costs will exceed the 35% threshold.
Accordingly, based on the submitted facts and figures (which will be subject to verification by CBP officials at the port of entry), the subject goods, classifiable under subheadings 1604.14.10, 1604.14.22 and 1604.14.30, HTSUS, which are products of the Solomon Islands, will be entitled to duty-free treatment under the GSP, upon compliance with all applicable regulations. Please be aware that the GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check our Web site at www.cbp.gov and search for the term “GSP”.
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 merchandise may also be subject to requirements administered by the National Marine Fisheries Service (NMFS) of NOAA, which may be contacted at 501 West Ocean Boulevard, Long Beach, CA 90802, telephone 562-980-4000. The Web site address is www.nmfs.noaa.gov/.
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 Nathan Rosenstein at (646) 733-3030.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division