CLA-2-09:OT:RR:NC:N2:232
Ms. Caitlin Herman
The Metropolitan Tea Company
41 Butterick Rd
Etobicoke, ON M8W 4W4
Canada
RE: The country of origin and eligibility of the United States-Mexico-Canada Agreement (USMCA) of Green Tea Products from Canada
Dear Ms. Herman:
In your letter dated February 22, 2022, you requested a binding ruling on the country of origin and eligibility of Green Tea Products under the United States-Mexico-Canada Agreement (USMCA).
The subject merchandise is described as three Green Tea Products. Basic Green Tea is said to contain green tea (product of India) imported and repacked in Canada. Flavored Green Tea is said to contain imported green tea (product of India) blended with flavoring and repacked in Canada. Flavored Blend Green Tea is said to contain imported green tea (product of India) blended with flavoring and rose petals and repacked in Canada. The three Green Tea Products will be imported into the U.S. in vacuum sealed bags with nitrogen immersed, with a net weight not exceeding 3 kilograms, intended for sale to the wholesale market.
Country of Origin:
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
The "country of origin" is defined in 19 CFR 134.1(b) as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin.”
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. See 19 C.F.R. § 102.11.
Applied in sequential order, 19 CFR Part 102.11(a) provides that 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 Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
The three Green Tea Products are neither “wholly obtained or produced” nor “produced exclusively from domestic materials.” Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of the three Green Tea Products, and paragraph (a)(3) must be applied next to determine the origin of the finished article. You state the Basic Green Tea is classified under subheading 0902.10.9050, Harmonized Tariff Schedule of the United States (HTSUS). The Flavored Green Tea and the Flavored Blended Green Tea are classified under subheading 0902.10.1050, HTSUS. The bulk green tea (Product of India) is classified under subheading 0902.20.0020, HTSUS, the flavoring (Product of the U.S. or Canada) is classified under subheading 3303.10, HTSUS and the rose petals (Product of Egypt) are classified subheading 1211.90.9090, HTSUS.
The tariff shift requirement in Part 102.20 for the heading 0902 at issue states:
A change to heading 0902 through 0903 from any other heading.
The three Green Tea Products do not meet the tariff shift. As a result, Part 102.11(a) does not apply.
Section 102.11(b) states, in relevant part:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation [(“GRI”)] 3, where the country of origin cannot be determined under paragraph (a) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good….
In determining the “essential character” of the finished good, Section 102.18(b)(1) provides, in relevant part:
(b) (1) For purposes of identifying the material that imparts the essential character to a good under Part 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under Part 102.20 specific rule or other requirements applicable to the good … (ii) Materials that may be considered include materials produced by the producer of the good and incorporated in the good. For example, if a producer of a good purchases raw materials and converts those raw materials into a component that is incorporated in the good, that component is a material that may be considered for purposes of identifying the materials that impart the essential character to the good, provided that the component is classified in a tariff provision from which a change in tariff classification is not allowed under the specific rule…
The green tea from India is the single component classified in a tariff provision from which a change in tariff classification is not allowed. Accordingly, the country of origin of the three Green Tea Products for marking purposes is India.
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));
Since the three Green Tea Products contain non-originating ingredients, they are not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor are the products produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the product qualifies under GN 11(b)(iii). As previously noted, the three Green Tea Products are classified under subheadings 0902.10, HTSUS. The applicable rule of origin for goods classified under subheading 0902, HTSUS, is in GN 11(o), HTSUS, which provides in relevant part:
Chapter 9 (2) “A change to subheadings 0902.10 through 0902.40 from any other subheading, including another subheading within that group.”
Based on the facts provided, the goods described above qualify for USMCA preferential tariff treatment, because they will meet the requirements of HTSUS General Note 11(b)(iii). The goods will therefore be entitled to a free rate of duty under the USMCA upon compliance with all applicable laws, regulations, and agreements.
This merchandise may be subject to the Federal Food, Drug, and Cosmetic Act and/or The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which are administered by the U.S. Food and Drug Administration (FDA). Information on the Federal Food, Drug, and Cosmetic Act, as well as The Bioterrorism Act, can be obtained by calling the FDA at 1-888-463-6332, or by visiting their website at www.fda.gov.
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 [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division