CLA-2-08:OT:RR:NC:N2:231
Mr. Patrick Huang
JC Logistics (USA) Inc.
6130 Stoneridge Mall Rd., #105
Pleasanton, CA 94588
RE: The tariff classification and country of origin of raw, U.S. macadamia nuts that have been shelled in China.
Dear Mr. Huang:
In your letter dated August 29, 2013, you requested a tariff classification and country-of-origin ruling on behalf of Royal Hawaiian Macadamia Nut, Inc. (Dana Point, CA).
You have outlined a scenario in which raw, dried, in-shell macadamia nuts of U.S. origin will be delivered in 1333-lb sacks to a processor in China. In China, the nuts will be shelled and put up in 25-lb bags. The bagged, shelled raw nuts will then be returned to the United States. You seek a determination as to the proper tariff classification and country of origin, for marking purposes, of the shelled nuts upon their arrival in the U.S.
The applicable subheading for the bags of raw, shelled macadamia nuts will be 0802.62.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other nuts, fresh or dried, whether or not shelled or peeled: macadamia nuts: shelled. The rate of duty will be 5 cents per kilogram.
We will note for your information that, as in similar situations previously ruled upon by CBP, heading 9801 (“U.S. goods returned”) will not apply because the goods undergo advancement in value or improvement in condition while abroad. Heading 9802 (“repairs and alterations”) will not apply because the Chinese processing represents an intermediate step in the production of a finished good.
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 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.
These goods may also be subject to regulations or restrictions administered by the U.S. Department of Agriculture, Animal and Plant Health Division (APHIS). You may contact that agency regarding possible applicable regulations at the following location:
U.S. Department of Agriculture
APHIS
Plant Protection and Quarantine Permit Unit
4700 River Road, Unit 136
Riverdale, MD 20737-1236
Telephone number: 877-770-5990
With regard to country of origin, 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. Pursuant to 19 CFR Section 134.1(b), the country of origin is 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 country the country of origin within the meaning of Part 134 of the regulations.
A substantial transformation occurs when a new and different article of commerce emerges from a process with a new name, character or use different from that possessed by the article prior to processing. See United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940).
In the present case, the shelling and repackaging of the nuts in China does not effect a substantial transformation. (See, for example, previous CBP rulings NY F89765, dated July 1, 2000, and NY L80836, dated December 13, 2004.) Accordingly, we find that after being processed in China, the goods currently under discussion retain their initial country-of-origin status as U.S. products for CBP marking purposes. Therefore, since goods deemed to be products of the United States are not subject to the requirements of 19 U.S.C. 1304, the imported 25-lb bags of shelled macadamias need not be marked with their country of origin. The question of whether they may be marked as products of the United States is under the jurisdiction of the Federal Trade Commission, which may be contacted for information at 6th and Pennsylvania Ave., NW, Washington, D.C. 20580. (For entry/duty purposes, however, the country of origin will be deemed China.)
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,
Myles B. Harmon
Acting Director
National Commodity Specialist Division