CLA-2:OT:RR:NC:N1:239
Mr. Neil Helfand
Sandler, Travis & Rosenberg, P.A.
505 Sansome Street
Suite No. 1475
San Francisco, CA 94111
RE: The Tariff Classification, country of origin and status under the North American Free Trade Agreement (NAFTA) for Fish Oil Blends from; 19 CFR 102.21(c)(2); tariff shift; Article 509
Dear Mr. Helfand:
In your letter dated October 21, 2016, you requested a tariff classification ruling on behalf of your client, Bioriginal Food & Science Corp., for the following five products: Fish Oil 40:20 Ethyl Ester, Fish Oil 33.22 Ethyl Ester, Bulk Focus & Attention, Salmon Black Currant Blend, and Caps Focus & Attention.
Samples submitted for four of the products---Fish Oil 40:20 Ethyl Ester, Fish Oil 33.22 Ethyl Ester, Bulk Focus & Attention, and Salmon Black Currant Blend---were sent to our laboratory for analysis. That analysis is now complete. We regret the delay. No sample was submitted for the fifth product, Caps Focus & Attention.
CLASSIFICATION:
Product 1
Per your submission, the Fish Oil 40:20 Ethyl Ester dietary supplement product is a chemically modified oil containing virtually no mono-glycerides, diglycerides or triglycerides (less than 1 percent if they are even measurable). This is obtained by the addition of a catalyst to cause a reaction, resulting in the removal of triglycerides and an ethyl ester end subsequent to importation it will be encapsulated.
You state that the Fish Oil 40:20 Ethyl Ester dietary supplement should be classified in subheading 1603.00.9090, Harmonized Tariff Schedule of the United States (HTSUS). You also suggested that this product should be classified in subheading 3824.99.4190, HTSUS, if CBP does not agree that the product is in the HTSUS Chapter 16 provision.
You suggested classification in 1603.00.9090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for extracts and juices of meat, fish or crustaceans, molluscs or other aquatic invertebrates. Based on the information submitted, we find that the product under review is more appropriately classified elsewhere.
The applicable subheading for the Fish Oil 40:20 Ethyl Ester dietary supplement will be 3824.99.4190, HTSUS, which provides for prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: other: other: fatty substances of animal or vegetable origin and mixtures thereof: other. The general rate of duty will be 4.6 percent ad valorem.
Product 2
Per your submission, the Fish Oil 33:22 EE dietary supplement product is also a chemically modified oil containing virtually no mono-glycerides, diglycerides or triglycerides (less than 1 percent if they are even measurable). This is obtained by the addition of a catalyst to cause a reaction, resulting in the removal of triglycerides and an ethyl ester end product it is imported in bulk in drums (not encapsulated) into the United States (U.S.). Only subsequent to importation it will be encapsulated.
You state that the Fish Oil 33:22 ethyl ester EE dietary supplement should be classified in subheading 1603.00.9090, HTSUS. You also suggested that this product should be classified in subheading 3824.99.4190, HTSUS, if CBP does not agree that the product is in the HTSUS Chapter 16 provision.
You suggested classification in 1603.00.9090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for extracts and juices of meat, fish or crustaceans, molluscs or other aquatic invertebrates. Based on the information submitted, we find that the product under review is more appropriately classified elsewhere.
The applicable subheading for the Fish Oil 33:22 EE dietary supplement will be 3824.99.4190, HTSUS, which provides for prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: other: other: fatty substances of animal or vegetable origin and mixtures thereof: other. The general rate of duty will be 4.6 percent ad valorem.
Product 5
Per your submission, the Caps-Focus & Attention dietary supplement product is a blend of the following ingredients by percentage, along with their respective countries of origin:
All of the ingredients (the main ingredient, Oils-Fish 33:22 in Product 2) are blended together and encapsulated in Canada prior to importation into the U.S.; the outer shell is composed of gelatin, glycerin, and purified water; the water is of Canadian origin, and the gelatin and glycerin will be of varying, non-originating origin.
You state that the Caps-Focus & Attention should be in subheading 2106.90.9998, HTSUS. This office agrees.
The applicable subheading for Caps-Focus & Attention will be 2106.90.9998, HTSUS, which provides for food preparations not elsewhere specified or included: other: other: other: other: other: other. The general rate of duty will be 6.4 percent ad valorem.
Product 3, the Bulk-Focus and Attention dietary supplement, and Product 4, the Salmon Black Current Blend, cannot be classified at this time. The issue of the tariff classification of dietary supplements in bulk in drums versus encapsulated dietary supplements is being considered by the Commercial and Trade Facilitation Division, Regulations and Rulings, Office of Trade. Once the issue is resolved, a response will be issued by that office on the tariff classification of Products 3 and 4.
NAFTA - LAW AND ANALYSIS:
The rules for determining whether the encapsulated dietary supplement, Product 5, is to be considered an “originating good” of Canada and thus eligible for preferential tariff treatment under the provisions of the North American Free Trade Act are provided for in General Note 12 of the HTSUS, which provides, in relevant part, as follows:
(a) Goods in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided therein. For the purposes of this note –
(i) Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (whether or not the goods are marked), when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” sub column followed by the symbol “CA” in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Implementation Act.
* * *
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
(b) 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--
(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
Based on the facts provided, the non-originating materials, such as, the Fish Oil 33:22, Primrose 9% Oil, the gelatin, and glycerin meet the tariff shift in General Note 12(t), Chapter 21, No. 14, which states in part: “A change to heading 2106 from any other chapter.” The Fish Oil 33:22 is classified in subheading 3824.99.4190, HTSUS, the Primrose 9% Oil is classified in subheading 3824.99.4190, HTSUS, the gelatin is classified in subheading 3503.00.55, and the glycerin is classified in subheading 2905.45.00. Therefore, the encapsulated dietary supplement, Product 5, meets the eligibility requirement for the NAFTA preference which qualifies it for the free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. Consequently, the country of origin for customs duty purposes will be Canada.
COUNTRY OF ORIGIN AND MARKING - LAW AND ANALYSIS:
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.
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.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d) of the regulations, provides that the ultimate purchaser of a good of a NAFTA country is the last person in the United States who purchases the good in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser.
With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. Accordingly, if Customs is satisfied that the article will remain in its container until it reaches the ultimate purchaser and if the ultimate purchaser can tell the country of origin of the encapsulated dietary supplement, Product 5, by viewing the container in which it is packaged, the individual ingredients, the encapsulated dietary supplement, Product 5, would be excepted from marking under this provision.
The encapsulated dietary supplement, Product 5, is presumed will be packaged for retail sale. As such, the packaging will be required to be marked as the alternative to marking each capsule individually. Accordingly, marking the container in which the encapsulated dietary supplement, Product 5, is imported and sold to the ultimate purchaser in lieu of marking the article itself is an acceptable country of origin marking for the imported Product 5 provided the port director is satisfied that the article will remain in the marked container until it reaches the ultimate purchaser.
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.
You state that the encapsulated dietary supplement, Product 5 is processed in a NAFTA country "Canada" prior to being imported into the U.S. Since "Canada” is defined under 19 CFR 134.1(g), as a NAFTA country, we must first apply the NAFTA Marking Rules in order to determine whether the imported products are "good[s] of a NAFTA country," and thus subject to the NAFTA marking requirements.
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.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the imported encapsulated dietary supplement, Product 5, is a good of Canada for marking purposes. That is, based on the facts provided, the rule of origin that applies is 19 Code of Federal Regulations 102.11 (a) (3) that states:
That the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in š 102.20, and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
The š 102.20 rule for chapter 21, HTSUS, subheading 2106.90, requires:
A change to a good of subheading 2106.90, other than to compound alcoholic preparations, from any other subheading, except from Chapter 4, Chapter17, heading 2009, subheading 1901.90 or subheading 2202.90 . . . .
All of the foreign materials incorporated in the encapsulated dietary supplement, Product 5, of subheading 2106.90, HTSUS, undergo a change in tariff classification from the Fish Oil 33:22 of subheading 3824.99.4190, HTSUS, the Primrose 9% Oil of subheadings 3824.99.4190, HTSUS, the gelatin of subheading 3503.00.55, HTSUS, and the glycerin of subheading 2905.45.00, HTSUS. Therefore, the encapsulated dietary supplement, Product 5, for marking purposes is Canada, thus, the packaging can be marked “product of”, or “made in” Canada.
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 the World Wide Web at http://www.usitc.gov/tata/hts/.
This merchandise may be subject to the Federal Food, Drug, and Cosmetic Act and/or The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which are administered by the U.S. Food and Drug Administration (FDA). Information on the Federal Food, Drug, and Cosmetic Act, as well as The Bioterrorism Act, can be obtained by calling the FDA at 1-888-463-6332, or by visiting their website at www.fda.gov.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 181.100(a) (2), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted.
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 Patrick Day at [email protected] for the products Fish Oil 40:20 Ethyl Ester and Fish Oil 33.22 Ethyl Ester, or National Import Specialist Bruce N. Hadley, Jr. at [email protected] for the product Caps-Focus & Attention.
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division