CLA-2-21:OT:RR:NC:N2:228
Mr. Anthony Parlatore
Redpath Sugar Ltd.
95 Queens Quay East
Toronto M5E1A3
Canada
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) for cappuccino toppings from Canada
Dear Mr. Parlatore:
In your letter dated July 12, 2019, you requested the tariff classification and status of the cappuccino toppings from Canada under the NAFTA.
Ingredients breakdowns, manufacturing flowcharts, and descriptions of the manufacturing processes were provided with your inquiry. The cappuccino toppings, formulation codes LE-CAPP and HE-CAPP, are said to contain non-dairy creamer, modified milk ingredients, non-fat dry milk, sugar, CMC - Cekol, and silicon dioxide. They will be used in coffee vending machines where they will be mixed with hot water and coffee to produce cappuccino flavored beverages. You state in your inquiry that Redpath produces the cappuccino toppings in Canada from raw cane sugar, which is refined in Canada, blended with the other ingredients and then packaged. The products will be packaged for sale to the foodservice industry in 1 and 2 pound pouches, net weight.
The applicable tariff provision for the cappuccino toppings will be 2106.90.7800, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included . . . other . . . other . . . other . . . containing over 10 percent by weight of milk solids . . . other . . . articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17 . . . described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions. The general rate of duty will be 10 percent ad valorem. If the quantitative limits of additional U.S. note 8 to chapter 17 have been reached, the product will be classified in subheading 2106.90.8000, HTSUS, and dutiable at the general rate of 70.4 cents per kilogram plus 8.5 percent ad valorem. In addition, products classified in subheading 2106.90.8000, HTSUS, will be subject to additional duties based on their value, as described in subheadings 9904.17.49 to 9904.17.56, 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 the World Wide Web at https://hts.usitc.gov/current.
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
Based on the facts provided, the non-originating materials, such as, the raw cane sugar and the silicon dioxide, meet the tariff shift in General Note 12(t), Chapter 21, No.12, which states in part: “A change to tariff items . . . 2106.90.78, 2106.90.80 . . . from any other chapter, . . . The sugar is classified in subheading 1701.13.10, HTSUS, and the silicon dioxide is classified in subheading 2811.22.0090, HTSUS, therefore, the cappuccino topping 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. Therefore, the country of origin for customs duty purposes will be Canada.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the country of origin of the cappuccino toppings for marking purposes is Canada. 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 §102.20, and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
The §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, Chapter 17, heading 2009, subheading 1901.90 or subheading 2202.90; . . . or a change to subheading 2106.90 from Chapter 17, provided that the good contains less than 65 percent by dry weight of sugar . . .” All of the foreign materials incorporated in the cappuccino toppings of subheading 2106.90, HTSUS, undergo a change in tariff classification, therefore, the product for marking purposes is Canada and may be marked “product of”, or “made in” Canada.
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 181 of the Customs Regulations (19 C.F.R. 181).
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 Bruce N. Hadley, Jr. at [email protected]. Sincerely,
Steven A. Mack Director National Commodity Specialist Division