CLA-2-17:OT:RR:NC:N2:232
Mr. Steve Clyde
Axxess International Inc.
3041 Commerce Drive, Suite A-1
Fort Gratiot Twp, MI 48059
RE: The Classification and Country of Origin for Liquid Sugar from Canada
Dear Mr. Clyde,
This is in response to your letter dated March 14, 2022, on behalf of your client, Sucre Solution, Inc., requesting a ruling on the classification and country of origin of Liquid Sugar. An ingredients breakdown, a sample and descriptive literature were submitted with your request. The sample was submitted to the Customs laboratory for analysis.
The subject merchandise is described as Liquid Sugar. It is said to contain 66.7 percent sugar, 33.3 percent water and trace amounts of Calcium hydroxide. You state that the raw cane sugar (Product of Brazil) is granulated, diluted with water, heated, filtered and packed. The finished product will be shipped to the United States in 20,000 liters bulk tanks. Upon importation, Liquid Sugar will be used in the production of a variety of foodstuffs.
According to Customs Laboratory Report no. NY 20220468, dated May 25, 2022, “The sample is a light-yellow liquid contained in a transparent plastic container and is labeled in non-English language as "ECHATILLON SUCRE LIQUIDE". Based on laboratory analysis, the sample contains 85% Sucrose on a dry weight basis. Fructose and glucose were detected below the method limit of quantification. The sample contains 33.2% water content. The sample has an average of 67.43 °Brix (sucrose content). This agrees with the results of 67 to 68 °Brix reported by the importer and the measured sucrose content.”
Classification:
The applicable subheading for the Liquid Sugar will be 1702.90.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar syrups not containing added flavoring or coloring matter; artificial honey, whether or not mixed with natural honey; caramel: Other, including invert sugar and other sugar and sugar syrup blends containing in the dry state 50 percent by weight of fructose: Derived from sugar cane or sugar beets: Other: Other. The general rate of duty will be 0.35 cents per liter.
Country of Origin Marking 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 C.F.R. § 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 C.F.R. § 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 Liquid Sugar is 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 Fermentation Starters, and paragraph (a)(3) must be applied next to determine the origin of the finished article.
The applicable tariff shift requirement in section 102.20 for Liquid Sugar of subheading 1702.90, HTSUS, consist of the following:
A change to heading 1701 through 1702 from any other chapter.
Because the foreign material (raw cane sugar) contained in Liquid Sugar is classified in heading 1701, the tariff shift rule in 19 C.F.R. § 102.20(a)(3) is not met. Since an analysis of section 102.11(a) has not produced a country of origin determination, we turn to section 102.11(b) of the regulations.
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 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 § 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 the § 102.20 specific rule or other requirements applicable to the good. For purposes of this paragraph (b)(1):
…
(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 only material that does not undergo the applicable tariff shift in 19 C.F.R. § 102.20(d) is the raw cane sugar from Brazil, and consistent with Sections 102.11(b) and 102.18(b)(1), it is the material that imparts the “essential character” unto Liquid Sugar.
Accordingly, the country of origin for marking purposes of Liquid Sugar is Brazil.
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 Frank Troise at frank.l.troise.cbp.dhs.gov.
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division