CLA-2-27:OT:RR:NC:N2:237
Ms. Rhonda F. MacKenzie
Customs Compliance Manager
Newalta Corporation
211 - 11th Avenue SW
Calgary, Alberta T2R 0C6
Canada
RE: Tariff classification, country of origin and NAFTA eligibility of crude oil from Canada
Dear Ms. MacKenzie:
In your letter dated July 10, 2015 you requested a tariff classification, country of origin and eligibility ruling under the North American Free Trade Agreement (NAFTA) for heavy crude oil.
Newalta receives waste crude oil emulsions (slop oils) from Canadian producers to be recycled into heavy crude oil at its facilities in Canada. Slop oils are obtained from the cleaning of oil field production tanks, vessels and equipment and as a waste product from crude oil cleaning upstream of the refining process. Slop oils consist of waste crude oil, water and ultrafine solid waste. Slop oils cause problems in the production of quality crude oil and must be routinely removed and treated or disposed of. Slop oils are fit only for the recovery of raw materials. Newalta uses specialized centrifuges to separate the oil from water and solid waste. The recovered oil meets industry standards for heavy crude oil and is blended with other crude for refining downstream.
The applicable subheading for heavy crude oil recycled from waste crude oil emulsions will be 2709.00.1000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Petroleum oils and oils obtained from bituminous minerals, Crude: Testing under 25 degrees A.P.I. The rate of duty is 5.25 cents per barrel. However, goods from Canada meeting the criteria for originating in GN 12(b), HTSUS, are eligible for duty free treatment under the NAFTA.
General Note 12(b), HTSUS (19 U.S.C. ยง 1202) sets forth the criteria for determining whether a good is originating under the NAFTA and states: 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 rules set forth therein.
General Note 12(n)(ix) provides: As used in subdivision (b)(i) of this note, the phrase "goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States," means-- "waste and scrap derived from-- (A) production in the territory of one or more of the NAFTA parties, or (B) used goods collected in the territory of one or more of the NAFTA parties, provided such goods are fit only for the recovery of raw materials."
Slop oils collected from crude oil producers in Canada and fit only for the recovery of crude oil will qualify as originating and be eligible for preferential treatment under the NAFTA. The heavy crude oil recovered from the slop oils at Canadian facilities and classifiable under subheading 2709.00.1000, HTSUS, will also qualify as originating and be eligible for duty free treatment under the NAFTA, upon compliance with all applicable laws, regulations and agreements.
Your product may be subject to the requirements of the Toxic Substances Control Act (TSCA), which are administered by the U. S. Environmental Protection Agency at 1200 Pennsylvania Avenue, N.W., Washington, D.C. 20460. Information on the TSCA can be obtained by calling the TSCA Assistance Line at (202) 554-1404 or by e-mail to: [email protected].
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 at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division