CLA-2-22:OT:RR:NC:N2:237
Mr. Dane E. Revette
Dane Revette Consulting LLC
9213 Homestead Drive
Baton Rouge, Louisiana 70817
RE: The tariff classification, country of origin, and eligibility under GSP of undenatured hydrous sugar cane ethanol imported for industrial use from Brazil.
Dear Mr. Revette:
In your letter dated July 25, 2013, on behalf of Petron Scientech of Princeton NJ, you requested a ruling on the tariff classification, country of origin, and eligibility for preferential duty treatment under the Generalized System of Preferences (GSP). You provided MSDS sheets for our review.
The hydrous sugar cane ethanol is described as undenatured industrial grade ethanol consisting of 92-95% ethanol by volume. This ethanol will be wholly manufactured, produced or grown in Brazil and imported for use as a feedstock in the production of biodegradable plastic resins. In turn these resins will be used in the manufacture of biodegradable soft drink bottles, food packaging, automobile coolants, textile clothing, fibers, curtains, carpets, industrial solvents, etc.
The applicable subheading for the undenatured hydrous sugar cane ethanol consisting of 92-95% ethanol will be 2207.10.6090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Undentured ethyl alcohol of an alcoholic strength by volume of 80 percent volume or higher: For nonbeverage purposes: Other. Articles classifiable in subheading 2207.10.6090, HTSUS, which are products of Brazil, are not entitled to duty free treatment under the Generalized System of Preferences (GSP). The rate of duty will be 2.5 percent ad valorem.
Pursuant to Section 423 of the Tax Reform Act of 1986, Public Law No. 99-514, 99th Congress, 2nd Session (1986), ethyl alcohol from U.S. insular possessions and CBERA BC’s was treated as “indigenous”: (1) if produced by a process of full fermentation in an insular possession or CBERA BC, or (2) where the ethyl alcohol was only dehydrated in an insular possession or CBERA BC, if it met the “local feedstock requirement.” However, Section 423 made it clear that hydrous ethanol from one country processed by azeotropic distillation to anhydrous ethanol in another country does not effect a substantial transformation. “Sect. 423 (g) of Public Law 99-154 provided that: (1) The provisions of, and the amendments made by this section (other than subsection (e))”- “Shall apply to articles entered- (A) after Dec. 31, 1986, and (B) before the expiration of the effective period of item 9901.50”. Therefore, the temporary legislation for additional duty (14.27 cents/liter) provided for under heading 9901.50, HTSUS, expired on December 31, 2011.
Federal Register (FR) Document 2013 - 03168 published USITC Notice of December 31, 2011 on the expiration of the statutory requirement in Sect. 423 (c) that USITC establish annually
the “base quantity” of imports fuel ethyl alcohol for transmittal to U.S. Customs for further administration of the Law [re: “local feedstock requirement”]. You may also reference 19 USC 2703 page 704 (see: Effective Date of 1986 Amendment) which provides the following: “Sect. 423 (g) of Public Law 99-154 provided that: (1) The provisions of, and the amendments made by this section (other than subsection (e))” “Shall apply to articles entered- (A) after Dec. 31, 1986, and (B) before the expiration of the effective period of item 901.50” [expired Dec. 31, 2011].
The temporary provision under 9901.50, HTSUS, provided for: Ethyl alcohol (provided for in subheadings 2207.10.60 and 2207.20) or any mixture containing such ethyl alcohol (provided for in heading 2710 or 3824) if such ethyl alcohol or mixture is to be used as a fuel or in producing a mixture of gasoline and alcohol, a mixture of a special fuel and alcohol, or any other mixture to
be used as fuel (including motor fuel provided for in subheading 2710.12.15, 2710.19.16, 2710.19.24 or 2710.20.15), or is suitable for any such uses. However, your product consisting of industrial grade ethanol (hydrous 92-95% ethanol by volume) is not intended for fuel use. Therefore, this provision does not apply to your product which is hydrous ethanol intended for industrial chemical use, namely, the manufacture of biodegradable plastic resins.
Additional requirements are imposed on ethanol by the Bureau of Alcohol, Tobacco and Firearms (National Revenue Center). Denatured and undenatured alcohol transferred in bond to a distilled spirits plant for industrial chemical use may be exempt from the Federal Excise Tax of $13.50 provided all applicable regulations are met. You may contact them at 650 Massachusetts Avenue NW, Washington, D.C. 20226, phone (202) 927-8500 or (800) 398-2282.
Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations {19 CFR 134.1(b)}, 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 the meaning of the marking laws and regulations. For country of origin marking purposes, a substantial transformation of an imported article occurs when it is used in manufacture, which results in an article having a name, character, or use differing from that of the imported article (19 CFR 134.35). Hydrous ethanol from one country processed by azeotropic distillation to anhydrous ethanol in another country does not effect a substantial transformation. However, the country of origin for your ethanol which is wholly manufactured, produced or grown in Brazil and imported in drums or other containers will remain Brazil pursuant to 19 U.S.C. 1304.
This merchandise may be subject to the requirements of the Toxic Substances Control Act (TSCA), which are administered by the U. S. Environmental Protection Agency. Information on the TSCA can be obtained by contacting the EPA at 1200 Pennsylvania Avenue, N.W., Washington, D.C. 20460, by calling the TSCA Assistance Line at (202) 554-1404, by Fax at (202) 554-5603, by e-mail to: [email protected] or by visiting their website at www.epa.gov.
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 Frank Cantone (646) 733-3038.
Sincerely,
Myles B. Harmon
Acting Director
National Commodity Specialist Division