CLA-2-20:OT:RR:NC:N2:232
Mr. Steve Clyde
Axxess International Inc.
3041 Commerce Drive, Suite A-1
Fort Gratiot, MI 48059
RE: The tariff classification and country of origin of Cocoa Syrups
Dear Mr. Clyde:
In your letter dated October 18, 2022, you requested a ruling on the tariff classification and country of origin of five variations of Cocoa Syrups on behalf of your client, Sucre Solution Inc. An ingredients breakdown, a manufacturing flowchart, and samples of the Cocoa Syrups were included with your inquiry. The samples were submitted to the Customs and Border Protection Laboratory for analysis.
The subject merchandise is described as Cocoa Syrups. The product will be used by U.S. food manufacturers to make various foodstuffs. The Cocoa Syrups will be shipped in bulk tankers with a capacity of 20,000 liters.
You state that raw cane sugar is imported into Canada from Brazil. In Canada, the non-originating granulated raw cane sugar is processed into “Liquid Cane Syrup” (aka liquid Sucrose). The processing includes adding water to the granulated raw cane sugar, heating the water/granulated sugar mixture to 176 degrees F, filtering the mixture via activated carbon and diatomaceous earth, mixing the mixture a second time at 176 degrees F, filtering the mixture a second time using activated carbon and diatomaceous earth, and a final filtration takes place before mixing in the powdered cocoa. The imported cocoa powder is produced in France by processing and grinding African cocoa beans and is imported into Canada.
You sent five samples of the Cocoa Syrups to this office, requesting the tariff classification for each one. The variations of the Cocoa Syrups are said to have the same percentage of water, with a slight variance in sugar and added cocoa powder content. The Cocoa Syrup samples were individually referred to as “Categories” in your request.
Category 1 is said to be composed of 65% sugar, 32.5% water, and 2.5% cocoa powder.
Category 2 is said to be composed of 62.5% sugar, 32.5% water, and 5% cocoa powder.
Category 3 is said to be composed of 56.5% sugar, 32.5% water, and 11% cocoa powder.
Category 4 is said to be composed of 52% sugar, 32.5% water, and 15.5% cocoa powder.
Category 5 is said to be composed of 44.5% sugar, 32.5% water, and 23% cocoa powder.
According to Customs Laboratory Report no. NY NY20221335, dated 04/06/2023, “The sample is a brown viscous substance contained in five small, closed plastic jars. The analyst labeled each jar as "Item A", "Item B", "Item C", "Item D" and "Item E". Each jar contained a white label with the following information:
Item A: "Composition: 52% sugar, 32.5% water and 15.5% cocoa powder". On average, Item A has 5.5% fructose, 9.4% glucose and 37.7% sucrose on a dry weight basis. Lactose and maltose were below method’s limit of detection.
Item B: "Composition: 65% sugar, 32.5% water, and 2.5% cocoa powder". Item B has 1.7% fructose, 1.6% glucose, and 83.4% sucrose on a dry weight basis. Lactose and maltose were below method’s limit of detection.
Item C: "Composition: 56.5% sugar, 32.5% water, and 11% cocoa powder". Item C has 67.5% sucrose on a dry weight basis. Fructose, glucose, maltose, and lactose were below method's limit of detection.
Item D: "23% cacao, syrup sugar and cocoa". Submitted documentation states that the item’s composition is "44.5% sugar, 32.5% water, and 23% cocoa powder". Item D has 1.7% glucose, and 49.5% sucrose on a dry weight basis. Fructose, maltose, and lactose were below method’s limit of detection.
Item E: "Composition: 62.5% sugar, 32.5% water, and 5% cocoa powder". Item E has 2.5% glucose, and 68.6% sucrose on a dry weight basis. Fructose, maltose, and lactose were below method’s limit of detection.”
It is noted that Category 1 Cocoa Syrup sample was labeled as Item B, Category 2 corresponds to Item E, Category 3 corresponds with Item C, Category 4 corresponds with Item A, and Category 5 corresponds with Item D.
Classification:
The applicable subheading for Category 1, 2, and 3 Cocoa Syrups, if imported in quantities that fall within the limits described in additional U.S. note 7 to chapter 17, will be 1806.20.7100, Harmonized Tariff Schedule of the United States, (HTSUS), which provides for Chocolate and other food preparations containing cocoa: Other preparations in blocks, slabs or bars, weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: Other: Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17: Described in additional U.S. note 7 to chapter 17 and entered pursuant to its provisions. The general rate of duty will be 10 percent ad valorem. If not described in additional U.S. note 7 to chapter 17 and not entered pursuant to this chapter’s provisions, the applicable subheading will be 1806.20.7300, HTS. The duty rate will be 30.5 cents per kilogram plus 8.5 percent ad valorem.
The applicable subheading for Category 4 and 5 Cocoa Syrups will be 1806.20.7800, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Chocolate and other food preparations containing cocoa: Other preparations in blocks, slabs or bars, weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: Other: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions. The general rate of duty will be 10 percent ad valorem.
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 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. 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.
The liquid sucrose is a product of Canada (heading 1702). The cocoa powder is a product of France (subheading 1805). The five variations of Cocoa Syrups are classified in subheading 1806.20.
The subject merchandise is neither “wholly obtained or produced” nor “produced exclusively from domestic materials.” Therefore, Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the Cocoa Syrups are neither wholly obtained nor produced exclusively from “domestic” (Canada, in this case) materials. The applicable tariff shift requirement in section 102.20 for the Cocoa Syrups of subheading 1806.20, HTSUS, consists of the following:
A change to subheading 1806.20 from any other heading.
Because the foreign material (cocoa powder) contained in the Cocoa Syrups is classified in a subheading outside of subheading 1806.20, namely subheading 1805, 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 all five variations of Cocoa Syrups is Canada.
This merchandise is subject to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (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 [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division