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 TX Whiskey Ready-To-Drink Canned Products
Dear Mr. Stang:
This is in response to your letter dated November 29, 2021, on behalf of your client Pernod Ricard USA, LLC, requesting a ruling on the classification and country of origin of TX Whiskey Ready-To-Drink Canned Products. You submitted ingredients breakdowns and flow charts depicting the various stages of processing and pictorial representations of the products.
The subject merchandise is described as TX Whiskey Ready-To-Drink (“RTD”) Canned Products, specifically: TX Whiskey Ranch Water, TX Whiskey & Cola, and TX Whiskey & Sweet Tea. You state the TX Whiskey RTD Canned Products are alcohol beverages ready to be consumed directly from the can. They are not intended to be mixed with any other beverage prior to consumption.
The TX Whiskey Ranch Water is said to contain carbonated water, TX bulk whiskey base, citric acid, natural lime flavor, sodium benzoate and potassium sorbate. The TX bulk whiskey base is added to lime flavoring in the United States and then shipped to Canada. In Canada, the bulk liquid is added to water, natural lime flavor, citric acid, sodium benzoate, potassium sorbate and carbon dioxide. It is then filtered, canned and pasteurized. The finished product is in 12 ounce ready-to-drink cans with an alcohol by volume content of 7 percent.
The TX Whiskey & Cola is said to contain carbonated water, liquid sucrose, TX bulk whiskey base, caramel color, phosphoric acid, natural cola flavor, sodium benzoate and potassium sorbate. The TX bulk whiskey base is added to cola flavoring and phosphoric acid in the United States and then shipped to Canada. In Canada, the bulk liquid is added to water, cola flavoring, liquid sucrose, sodium benzoate and potassium sorbate, phosphoric acid and carbon dioxide. It is then filtered, canned and pasteurized. The finish product is in 12 ounce ready-to-drink cans with an alcohol by volume content of 7 percent.
The TX Whiskey & Sweet Tea is said to contain water, liquid sucrose, TX bulk whiskey base, natural tea flavor, citric acid, caramel color, sodium benzoate and potassium sorbate. The TX bulk whiskey base is added to natural tea flavoring in the United States and then shipped to Canada. In Canada, the bulk liquid is added to water, tea flavoring, liquid sucrose, sodium benzoate and potassium sorbate. It is then filtered, canned and pasteurized. The finished product is in 12 ounce ready-to-drink cans with an alcohol by volume content of 7 percent.
Classification:
In your letter, you proposed classification for the TX Whiskey & Cola and the TX Whiskey & Sweet Tea under 2008.70.0030, 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: Liqueurs and cordials: In containers each holding not over 4 liters. We disagree. Based on the composition of the ingredients and use, the product will be classified elsewhere.
The applicable subheading for all three TX Whiskey Ready-To-Drink Canned Products: TX Whiskey Ranch Water, TX Whiskey & Cola, and TX Whiskey & Sweet Tea 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 TX Whiskey RTD Canned Products 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 TX Whiskey RTD Canned Products 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.
TX Whiskey Ranch Water contains foreign material (TX bulk whiskey base and natural lime flavoring) that are classified in subheading 2208.30 and 3302.10. TX Whiskey & Cola contains foreign material (TX bulk whiskey base, caramel color, phosphoric acid and natural cola flavoring) that are classified in subheading 2208.30 and 3203.00, 3824.99 and 3302.10. TX Whiskey & Sweet Tea contains foreign material (TX bulk whiskey base, caramel color and natural tea flavoring) that are classified in subheading 2208.30 and 3203.00 and 3302.10. Because none of the foreign material contained in all the TX Whiskey Ready-To-Drink Canned Products are classified in subheadings 2208.90 and 2106.90, 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 TX Whiskey Ready-To-Drink Canned Products 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