CLA-2-16:OT:RR:NC:N2:231
Mr. Bob Kokuryo
Azuma Foods (Canada) Co., Ltd
11451 Twigg Place
Richmond, Mitchell Island
British Columbia, V6V 2Y2
Canada
RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA) of Frozen Capelin Roe and Crawfish Salad
Dear Mr. Kokuryo:
This is in response to your letter dated July 11, 2019 requesting a classification, country of origin determination, and status under NAFTA for the “Frozen Capelin Roe and Crawfish Salad.”
You have presented a scenario whereby frozen, pre-cooked, peeled crawfish from China is exported into Canada for processing into 12-kilogram frozen blocks. Next, unseasoned frozen capelin roe from Iceland is also exported into the latter country and processed into 11-kilogram frozen blocks. In Canada, the above-described items are defrosted, blended, and seasoned. The seasoned blend will be composed of capelin roe (33 percent); crawfish tail meat (25 percent), mayonnaise, soy sauce, corn syrup, soy powder, water, mustard extract, potato starch, disodium inosinate/guanylate, hydrolyzed corn protein, onion powder, garlic powder, salt and xanthan gum. The product will be packed into 650-gram plastic containers then frozen. The “Frozen Capelin Roe and Crawfish Salad” will be sold to restaurants as a filler or topping for sushi items.
The applicable subheading for “Frozen Capelin Roe and Crawfish Salad” will be 1604.32.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs: Caviar and caviar substitutes: Caviar substitutes: Other.” The rate of duty will be Free.
Trade Program – NAFTA
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
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 the rules set forth therein, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
For items classified in subheading 1605.40, GN 12/16.1 requires:
A change to headings 1601 through 1605 from any other chapter.
The non-originating materials are identified from the following countries and classified as follows:
Capelin roe – 0303, HTSUS – Iceland
Crawfish tail meat – 1605, HTSUS – China
Soy powder – 1209, HTSUS – China
Mustard Extract – 2103, HTSUS – Japan
Disodium Inosinate/Guanylate – 2934, HTSUS – Thailand
Xanthan Gum – 3912, HTSUS - China
Based on the facts provided, the “Frozen Capelin Roe and Crawfish Salad”, described above, does not qualify for NAFTA preferential treatment because it will not meet the requirements of HTSUS General Note 12(b)(ii)(A) and 12(t)/16.1, as each of the non-originating materials enumerated above do not undergo an applicable change in tariff classification. The goods will therefore not be entitled to a free rate of duty under NAFTA.
Country of Origin
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. Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the “Frozen Capelin Roe and Crawfish Salad” is produced from materials originating in Canada, United States and various other countries and therefore is neither wholly obtained or produced, nor produced exclusively from domestic materials. Since an analysis of sections 102.11(a) (1) and 102.11(a) (2) will not yield a country of origin determination, we look to section 102.11(a) (3).
Section 102.11(a)(3) provides that the country of origin is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 CFR 102.20. Since we have determined that “Frozen Capelin Roe and Crawfish Salad” is classified in subheading 1605.40.1010, HTSUS, the applicable tariff shift rule found in section 102.20(d) requires a change to headings 1601 through 1605 from any other chapter, except from smoked products of heading 0306 through 0308. We find that the product fails to achieve the required tariff shift specified in section 102.20(d) hence we progress to section 102.11(b)(1). 102.11(b)(1) provides that the country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good. Pursuant to 19 CFR 102.18(b)(1), for purposes of identifying the material that imparts the essential character to a good under section 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed. Therefore, since the crawfish tail meat from China is the only material that does not undergo the requisite tariff shift, the country of origin of the “Frozen Capelin Roe and Crawfish Salad” for marking purposes is China, on the basis of 19 CFR 102.11(b)(1).
The merchandise in question may be subject to antidumping duties or countervailing duties (AD/CVD). Written decisions regarding the scope of AD/CVD orders are issued by the Enforcement and Compliance office in the International Trade Administration of the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection (CBP). You can contact them at http://trade.gov/enforcement/ (click on “Contact Us”). For your information, you can view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and Countervailing Duty” under “Popular Topics” at the top of the screen), and you can search AD/CVD deposit and liquidation messages using CBP’s AD/CVD Search tool at http://addcvd.cbp.gov/.
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). See also “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings.
Products of China classified under subheading 1604.32.4000, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 1604.32.4000, HTSUS, listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
Please note that seafood is subject to the Mandatory Country of Origin Labeling (“COOL”) requirements administered by the USDA’s Agricultural Marketing Service (AMS), we advise you to check with that agency for their further guidance on your scenario. Contact information for AMS is as follows:
USDA-AMS-LS-SA
Room 2607-S, Stop 0254
1400 Independence Avenue, SW
Washington, DC 20250-0254
Tel. (202) 720-4486
Website: www.ams.usda.gov/COOL
Email address for inquiries: [email protected]
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 the 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 CFR Part 177).
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division