CLA-2-22:OT:RR:NC:N2:N232
Robert D. Stang Husch Blackwell LLP 750 17th Street N.W., Suite 900 Washington, D.C. 20006-4675
RE: The tariff classification and country of origin of Absolut Vodka Sodas
Dear Mr. Stang:
This is in response to your letter dated September 24, 2021, on behalf of your client Pernod Ricard USA, LLC, requesting a ruling on the classification and country of origin of Absolut Vodka Soda Products. You submitted flow charts depicting the various stages of processing and pictorial representations of the products.
The subject merchandise is described as carbonated vodka soda products, specifically: Absolute Vodka Lime & Cucumber; Absolut Vodka Soda Grapefruit & Rosemary; and Absolut Soda Raspberry & Lemongrass. Collectively, these three products are referred to as the “Vodka Sodas.” The Vodka Sodas are Ready To Drink (“RTD”) products in cans. As indicated by their name, the RTD Vodka Sodas are ready to be consumed directly from the can and are not to be mixed with any other beverage prior to consumption. The Vodka Sodas are said to contain water, vodka, natural extracts and essences and carbon dioxide.
You state the vodka is produced in Sweden with an alcohol by volume content of 60 percent and is then exported to Canada in bulk. In Canada, the bulk vodka will be diluted with water, natural extracts and essences, and carbon dioxide is added to form a bulk finished product with an alcohol by volume content of approximately 5 percent. The bulk finished product undergoes a canning process whereby it is filtered and sealed in a 35 ml ready-to-drink can. The sealed cans are pasteurized to form the Vodka Sodas ready for export to the United States.
Classification:
In your letter, you proposed classification under 2008.90.7500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages: Other: Other: Spirits: Other. We disagree with the suggested classification. Based upon the product’s ingredients, they will be classified elsewhere.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
The EN to 2208 provides, in pertinent part:
The heading covers, whatever their alcoholic strength:
(A) Spirits produced by distilling wine, cider or other fermented beverages or fermented grain or other vegetable products, without adding flavouring; they retain, wholly or partly, the secondary constituents (esters, aldehydes, acids, higher alcohols, etc.) which give the spirits their peculiar individual flavours and aromas.
We note that flavoring (natural extracts and essences) was added to the Vodka Sodas in Canada. Such ingredients, pursuant to the language of the EN, will preclude Vodka Sodas from classification in Spirits. Thus, they do not meet the description of the term “Spirit” and are not classable under subheading 2208.90.7500, HTSUS.
Based on the foregoing, the applicable subheading for the Vodka Soda Products will be 2208.90.8000, HTSUS, which provides for Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages: Other: Other: Other. The general rate of duty will be 21.1 cents per liter.
Imports under this subheading may be subject to Federal Excise Tax (26 U.S.C. 5001, 26 U.S.C. 5041 or 26 U.S.C. 5051). Additional requirements may be imposed on this product by the Alcohol and Tobacco Tax and Trade Bureau (TTB). You may contact the TTB at the following number: (1-866-927-2533), [email protected]. Written requests may be addressed to: Alcohol and Tobacco Tax and Trade Bureau, Advertising, Labeling and Formulation Division, 1310 G Street NW, Box 12, Washington, DC 20005.
Country of Origin Marking
The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940).
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. Applied in sequential order, the required hierarchy establishes that: The country of origin of a good is the country in which: (a)(1) The good is wholly obtained or produced;
(a)(2) The good is produced exclusively from domestic materials; or
(a)(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the Vodka Sodas are neither wholly obtained nor produced exclusively from “domestic” (Canada, in this case) materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). The applicable tariff shift requirement in section 102.20 for the Vodka Sodas of subheading 2208.90, HTSUS, consist of the following:
A change to subheading 2208.90 from any other subheading, except from subheading 2106.90; or A change to kirschwasser or ratafia of subheading 2208.90 from any other product.
Because the foreign material (vodka and natural extracts and essences) contained in all Vodka Sodas are classified in subheadings 2208.60 and 3302.10, the tariff shift rule in 19 C.F.R. § 102.20(a)(3) is met. Accordingly, for marking purposes the country of origin of the Vodka Sodas is 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 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 Troise at frank.l.troise.cbp.dhs.gov.
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division