CLA-2-12:OT:RR:NC:N2:N232
Cloee Lamarre
DPME
640 Route Cameron, Bureau 104
Sainte-Marie, Quebec G6E 1B2
Canada
RE: The Classification, Country of Origin Marking and Eligibility of the United States-
Mexico-Canada Trade Agreement (USMCA) for Substrate with Seeds from Canada
Dear Ms. Lamarre:
This is in response to your letter dated November 16, 2021, requesting a ruling on classification,
country of origin marking and the eligibility of the USMCA on three Substrate with Seeds.
The subject merchandise, Substrate with Seeds, is described as a pre-fertilized and pre-seeded substrate that is for use in passive hydroponics. It is said to contain peat moss, coconut fiber, enriched black soil, kaolin, expanded perlite, multicote, latex, dolomitic lime, conductive wetting agent and seeds. The peat moss, coconut fiber, enriched black soil, kaolin, expanded perlite, latex, and seeds are products of Canada. The dolomitic lime, multicote and conductive wetting agent are products of the USA. The Substrate with Seeds will be imported in three varieties: Substrate with Tower Basil Seeds, Substrate with Purple Basil Seeds and Substrate with Capucine Seeds. The Substrate with Seeds products will be imported in plastic bags within boxes and is ready for planting in planters.
Classification:
The applicable subheading for the Substrate with Capucine Seeds will be 1209.30.0090, HTSUS, which provides for Seeds, fruits and spores of a kind used for sowing: Seeds of herbaceous plants cultivated principally for their flowers: Other. The general rate of duty will be 1 cent per kilogram. The applicable subheading for the Substrate with Tower Basil Seeds and Substrate with Purple Basil Seeds will be 1209.99.4190, HTSUS, which provides for Seeds, fruits and spores of a kind used for sowing: Other: Other: Other: Other. The rate of duty will be 0.83 cent per kilogram.
Country of Origin 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: (a) The country of origin of a good is the country in which: (1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or (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 Substrate with Seeds is neither wholly obtained nor produced exclusively from “domestic” (Canada, in this case) materials. Accordingly, we look to section 102.11(a)(3). The applicable tariff shift requirement in section 102.20 for the Substrate with Seeds of subheading 1209.30 and 1209.99, HTSUS, consist of the following:
A change to heading 1209 through 1214 from any other chapter.
Because the foreign materials (dolomitic lime, conductive wetting agent and multicote) contained in all three Substrate with Seeds products are classified in subheadings 2518.20, 2904.35 and 3105.20 outside of chapter 12, the tariff shift rule in 19 C.F.R. § 102.20 is met. Therefore, in accordance with 19 C.F.R. § 102.11(a)(3), the country of origin for marking purposes of all three products is Canada.
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, 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, in relevant part:
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 nonoriginating 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 all the Substrate with Seeds products are USMCA originating, the products are a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials under GN 11(b)(ii). Accordingly, the Substrate with Capucine Seeds classified under subheading 1209.30.0090 HTSUS and, the Substrate with Tower Basil Seeds and Substrate with Purple Basil Seeds classified under subheading 1209.99.4190, HTSUS, are 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.
Importation of these goods may be subject to regulations or restrictions administered by the U.S. Department of Agriculture, Animal and Plant Health Division (APHIS). You may contact this agency regarding possible applicable requirements 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
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