MAR-2 OT:RR:NC:2:235
Ms. Deanna M. Jones
Banner Pharmacaps Inc.
4125 Premier Drive
High Point, NC 27265
RE: THE COUNTRY OF ORIGIN MARKING OF SALMON OIL CAPSULES (Product Number BCP-71-ENT)
Dear Ms. Jones: This is in response to your letter dated October 8, 2012 requesting a ruling on the Country of Origin Marking requirements for Salmon Oil Capsules. The instant product is manufactured in Canada from materials obtained from the United States, and various other non NAFTA Countries. A marked sample was not submitted with your letter for review.
In your letter, you state the only active ingredient, Salmon Oil, will be encapsulated in Canada. The capsule consists of several ingredients which are combined in Canada to form the finished capsules. The finished product is encapsulated and bulk packaged in Canada. The bulk capsules will then be shipped to the United States to be bottled and labeled for distribution to domestic U.S. customers.
A classification ruling was not requested with your submission. However, as the “applicability of trade program” (NAFTA eligibility) was requested, we will briefly state the classification of the instant product.
The applicable subheading for the Salmon oil will be 1504.20.6040, Harmonized Tariff Schedule of the United States (HTS), which provides for Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified…fats and oils and their fractions, of fish, other than liver oils…other…other. The general rate of duty will be 1.5 cents per kilogram plus 5 percent ad valorem.
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 non originating 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.
Specifically, we need to apply GN 12(t)/15, which requires:
“A change to headings 1501 through 1518 from any other chapter, except from heading 3823.”
Therefore, the indicated tariff shift must be applied to all “non-originating” (non-NAFTA), materials used in the production of such goods. We find that all non-NAFTA inputs make the given shift. The Salmon Oil is the only input that does not make the shift. It is a product of the United States, and the essential character of the good.
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.
Part 181 defines “Originating” for our purposes”. It indicates:
(q) Originating. Originating, when used with regard to a good or a material, means a good or material which qualifies as originating in the United States, Canada and/or Mexico under the rules set forth in General Note 12, HTSUS, and in the appendix to this part.
In addition the Section 102.19 (NAFTA preference override.) directs us that:
(a) Except in the case of goods covered by paragraph (b) of this section, if a good which is originating within the meaning of § 181.1(q) of this chapter is not determined under § 102.11(a) or (b) or § 102.21 to be a good of a single NAFTA country, the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing, provided that a Certificate of Origin (see § 181.11 of this chapter) has been completed and signed for the good.
(b) If, under any other provision of this part, the country of origin of a good which is originating within the meaning of § 181.1(q) of this chapter is determined to be the United States and
that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such
good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.
We therefore find that the instant product is a product of Canada for purposes of Marking. The Salmon Oil Capsules will qualify for NAFTA preferential treatment, and the Country of Origin under 19 C.F.R. § 102.19 is Canada, the last NAFTA country in which the good underwent production, provided that a Certificate of Origin is completed and signed for the good.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 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 Paul Hodgkiss at (646) 733-3046.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division