CLA-2-20:OT:RR:NC:N2:228
Mr. Ruz Safai
OWN Your Hunger Inc.
4412 17th Ave. NW
Calgary, Canada
RE: The tariff classification and eligibility of the United States-Mexico-Canada Agreement (USMCA) of a nut spread from Canada
Dear Mr. Safai:
In your letter received by this office on October 18, 2021, you requested a binding ruling on the tariff classification and United States-Mexico-Canada Agreement (USMCA) eligibility of the product, “WONDERSPREAD™ Peanut Butter Spread.” An ingredients breakdown, and description of the manufacturing process accompanied your inquiry.
The nut spread is described as the world’s first low-calorie, full taste peanut butter replacement. The nut spread is said to contain EPG (an FDA-approved fat replacement ingredient from modified plant-based oil) (Product of USA), peanuts (Product of USA), allulose (Product of USA), monk fruit powder (Product of Canada), stevia leaf powder (Product of USA), and sunflower lecithin (Product of USA).
You state that all ingredients for the nut spread will be shipped to Canada where they will be processed into the finished product. The manufacturing process is said to be comprised of extracting oil from the peanuts, combining the peanut mass with EPG, adding the remaining ingredients, and blending the entire mixture at a temperature of 160 degrees Fahrenheit for approximately 1 minute. The nut spread is then filled into 12-ounce jars, capped, sealed, and exported to the United States to be distributed to customers from retailers and wholesalers. The nut spread will be used by the end consumer as a specialty dietary product to replace traditional peanut butter with a peanut butter substitute containing half the calories of natural peanut butter.
Classification:
The applicable subheading for the product, “WONDERSPREAD™ Peanut Butter Spread,” when imported in airtight containers will be 2008.97.1040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for fruit … otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included … other, including mixtures … mixtures … in airtight containers and not containing apricots, citrus fruits, peaches or pears … other. The general rate of duty will be 5.6 percent ad valorem. If the containers are not airtight, the applicable subheading will be 2008.97.9094, HTSUS, which provides for fruit … otherwise prepared or preserved … other, including mixtures … mixtures … other … other … other. The general rate of duty will be 14.9 percent ad valorem.
USMCA:
The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or
Since all of the ingredients in the nut spread are USMCA originating, the product is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials under GN 11(b)(ii). Therefore, the product, “WONDERSPREAD™ Peanut Butter Spread,” would be eligible for preferential tariff treatment under the USMCA.
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.
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 Timothy Petrulonis at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division