CLA-2-20:OT:RR:NC:N2:231
Mr. Gustavo A. Llano Dominguez
Manitoba Ltda.
Cra 8 No. 34-56
Cali
Valle del Cauca 579986
Colombia
RE: The tariff classification, country of origin and status under the United States-Colombia Trade Promotion Agreement of peanut butter from Colombia.
Dear Mr. Llano Dominguez:
In your letter dated May 7, 2014 you requested a ruling on the status of peanut butter from Colombia under the U.S.-Colombia TPA.
You have outlined a scenario in which your company will import U.S.-origin “blanched jumbo peanuts raw” into Colombia, where they will be processed (fried and ground) and combined with other ingredients to form peanut butter. You did not indicate the origin of the other ingredients. The finished peanut butter will then be imported into the United States.
As you noted in your letter, this office previously issued New York Ruling N238151, dated February 21, 2013, in which we provided a merchandise description, tariff classifications and general rates of duty applicable to the peanut butter when it is imported into the U.S. The following three paragraphs are excerpted from that ruling:
The merchandise in question is “creamy peanut butter” put up in 300-gram plastic retail jars or other forms/sizes of packaging. It is a smooth, brown spread made from fried peanuts, sugar, salt, emulsifier (glycerol esters and fatty acid compounds) and antioxidant (BHA). It is said to be manufactured by mixing, grinding and homogenizing the foregoing ingredients.
The applicable subheading for the “creamy peanut butter,” if entered under quota, will be 2008.11.0500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together: other, including mixtures: peanuts (ground-nuts): peanut butter and paste: described in additional U.S. note 5 to chapter 20 and entered pursuant to its provisions. The rate of duty will be free.
The applicable subheading for the “creamy peanut butter,” if entered outside the quota, will be 2008.11.1500, HTSUS, which provides for fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together: peanuts (ground-nuts): peanut butter and paste: other. The general rate of duty will be 131.8 percent ad valorem.
General Note 34(b), HTSUS, sets forth the criteria for determining whether a good is originating under the U.S.-Colombia TPA, as follows:
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of Colombia or of the United States under the terms of this note if–
(i) the good is wholly obtained or produced entirely in the territory of Colombia or of the United States, or both;
(ii) the good is produced entirely in the territory of Colombia or of the United States, or both, and--
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and
satisfies all other applicable requirements of this note and of applicable regulations; or
(iii) the good is produced entirely in the territory of Colombia or of the United States, or both, exclusively from materials described in subdivisions (i) or (ii), above.
For the purposes of subdivision (b)(ii)A), the term “used” means utilized or consumed in the production of the goods.
Based on the facts provided, the peanut butter qualifies for preferential treatment under the U.S.-Colombia TPA because it will meet the requirements of HTSUS General Note 34(b)(i) (if all ingredients/“materials used” are of U.S. and/or Colombian origin), or General Note 34(b)(ii) (if any of the non-peanut ingredients/“materials used” are not of U.S. or Colombian origin). When entered under subheading 2008.11.1500, HTSUS, the peanut butter will therefore be entitled to a
105.4% preferential rate of duty under the U.S.-Colombia TPA upon compliance with all applicable laws, regulations and agreements. (As indicated in NY N238151, the duty rate is unconditionally free, without regard to trade agreements, when the quota is open and the merchandise is entered under subheading 2008.11.0500, HTSUS.)
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/.
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).
U.S. Customs and Border Protection (CBP) has taken the position that the manufacture of peanut butter from peanuts constitutes a “substantial transformation,” meaning that the peanuts lose their identity and become a new product having a new name, character and use. The country of origin of peanut butter is thus the country where it is made. See Headquarters Ruling Letters 555062 (Feb. 23, 1990) and 559965 (Jan. 24, 1997). In the present case, the country of origin of the peanut butter for duty, quota and marking purposes is Colombia.
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 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 the email address [email protected].
Sincerely,
Gwenn Klein Kirschner
Acting Director
National Commodity Specialist Division