OT:RR:NC:N2:231
Ms. Sheri Lawson
Willson International Inc.
160 Wales Avenue
Suite 100
Tonawanda, NY 14150
RE: The country of origin and status under the North American Free Trade Agreement (NAFTA) of Unrooted and Rooted Hydrangea Cuttings
Dear Ms. Lawson:
In your letter dated November 14, 2019, you requested a country of origin ruling determination for your client, Keepsake Plants Ltd (Leamington, Ontario).
The merchandise under consideration is Unrooted Hydrangea Cuttings and Rooted Hydrangea Cuttings. You have stated that your client purchased both articles from its U.S.-subsidiary, Keepsake Plants Ltd in Florida in May. The cuttings were imported from the Netherlands into the United States and grown for two years. The cuttings are exported to Canada where the unrooted cuttings are planted in pots of various sizes while the rooted cuttings are transferred from plug trays into 4.5-inch pots then both are placed in a greenhouse to promote further growth. The unrooted and rooted cuttings are subsequently moved from the greenhouse to the field in the first week of July and June respectively. At the end of October, the cuttings are moved from the field and placed in a cooler at a temperature between 30– 45 degrees Fahrenheit for a period of six weeks. When six-week period ends, the articles are removed from the cooler, deleaved, and returned to the cooler where they remain until they are shipped to the United States. The Unrooted and Rooted Hydrangea Cuttings are sold to greenhouses for continued cultivation until they are eventually sold to the ultimate purchaser.
The applicable subheading for the Unrooted Hydrangea Cuttings will be 0602.10.0000, Harmonized Tariff Schedule of the United States (HTS), which provides for: “Other live plants (including their roots), cuttings and slips; mushroom spawns: Unrooted Cuttings and slips.” The rate of duty will be 4.8 percent ad valorem
The applicable subheading for the Rooted Hydrangea Cuttings will be 0602.90.3090, Harmonized Tariff Schedule of the United States (HTS), which provides for: “Other live plants (including their roots), cuttings and slips; mushroom spawns: Other: Herbaceous perennials: Other: With soil attached to roots: Other.” The rate of duty will be 1.4 percent ad valorem.
The NAFTA is implemented in General Note (“GN”) 12 of the HTSUS. GN 12(a)(i) states that goods are eligible for the NAFTA rate of duty if they originate in the territory of a NAFTA party and qualify to be marked as goods of Canada.
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
Under GN 12(n), “goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States” includes “vegetable goods, as such goods as are defined in this schedule, harvested in the territory of one or more of the NAFTA parties.” We find that the cuttings, which were harvested in the territory of a NAFTA party, qualify as wholly obtained or produced.
As the products at issue originate under the terms of GN 12, they will qualify for preferential tariff treatment under the NAFTA if they also qualify to be marked as goods of Canada in accordance with GN 12(a)(i).
The NAFTA Marking Rules are contained in 19 CFR Part 102 of the Federal Regulations. Section 102.11 sets forth the General Rules for determining the country of origin of imported merchandise, with the exception of textile goods which are subject to the provisions of § 102.21. Section 102.11(a)(3) provides 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. “Foreign material” is defined in § 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The applicable tariff shift requirement in § 102.20 for the products at issue is:
“A change to heading 0601 through 0602 from any other heading, including another heading within that group.”
Here, because the foreign cuttings (unrooted and rooted) are classified in the same heading, the tariff shift rule in 19 C.F.R. § 102.20 is not met.
However, the note to Section II of 19 C.F.R. § 102.20 also states that “[n]otwithstanding the specific rules of this section, an agricultural or horticultural good grown in the territory of a country shall be treated as a good of that country even if grown from seed or bulbs, root stock, cuttings, slips or other live parts of plants, or from whole plants, imported from a foreign country.”
Therefore, because the final products are grown in Canada from cuttings from the United States, they qualify to be marked as products of Canada in accordance with 19 C.F.R. § 102.20.
As we have determined that the cuttings qualify as NAFTA originating under GN 12(b) and qualify to be marked as goods of Canada under GN 12(a)(i), they qualify for preferential tariff treatment under NAFTA.
This merchandise may be subject to regulations or restrictions administered by the U.S. Department of Agriculture, Animal and Plant Health Division (APHIS). You may contact that agency regarding possible applicable regulations at the following location:
U.S. Department of Agriculture
APHIS
Plant Protection and Quarantine Permit Unit
4700 River Road, Unit 136
Riverdale, MD 20737-1236
Telephone number: 877-770-5990
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 Ekeng Manczuk at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division