CLA-2-14:OT:RR:NC:N2:231
Mr. Jordan Socran
Veryplants Inc.
41 Rue Claude Beaconsfield, Quebec H9W 4E9 Canada
RE: The tariff classification, country of origin, marking, and eligibility of the United States-
Mexico-Canada Trade Agreement (USMCA) for a Potting Mix for Plants from Canada
Dear Mr. Socran:
This is in response to your letter dated January 19, 2023, requesting a ruling on tariff classification, country of origin, and eligibility under the USMCA of a Potting Mix for Plants. A sample was not submitted, but material safety data sheets were included with your inquiry.
The subject merchandise is Molly’s Aroid Potting Mix. The product is composed of coco chips (also known as coconut coir, 59 percent, Canada), Pinus radiata bark (18 percent, New Zealand), expanded clay (Germany), perlite (Canada), pro-mix HP (Canada), worm castings (Canada), coco pith (2 percent, coconut coir, Canada), and horticultural charcoal (Canada). The product, which is intended to support tropical and indoor plants, will be imported in five-quart bags from Canada and sold to consumers on Amazon and through retail garden centers in the United States.
Classification
The applicable subheading for the Potting Mix will be 1404.90.9000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: “Vegetable products not elsewhere specified or included: Other: Other.” The general rate of duty will be Free.
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 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. 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 merchandise under review 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 potting mix is neither wholly obtained nor produced exclusively from “domestic” materials. Accordingly, we look to section 102.11(a)(3). The applicable tariff shift requirement in section 102.20 for the potting mix of subheading 1404.90, HTSUS, consists of the following:
“A change to headings 1401 through 1404 from any other chapter.”
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:
(1) 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, or…
When determining the essential character of a good under 19 C.F.R. § 102.11, 19 C.F.R. § 102.18(b)(1) provides that only domestic and 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 shall be taken into consideration. In this case, Pinus radiata bark of New Zealand origin, is classified in heading 1401 within Chapter 14, which is a provision from which a change in tariff classification is not allowed under the tariff shift rule.
Section 102.18(b)(2) provides, in relevant part:
For purposes of determining which one of two or more materials described in paragraph (b)(1) of this section imparts the essential character to a good under § 102.11, various factors may be examined depending upon the type of good involved. These factors include, but are not limited to, the following:
(i) The nature of each material, such as its bulk, quantity, weight or value; and
(ii) The role of each material in relation to the use of the good.
Accordingly, we find that the coir from Canada (classified in 1404.90.9000, HTSUS), which comprises of 61 percent of the product, provides the essential character of the potting mix as it possesses the predominant weight of any item used to make the product. Therefore, in accordance with 19 C.F.R. § 102.11(b)(1), the country of origin of the Molly’s Aroid Potting Mix for origin and marking purposes is Canada.
United States Mexico Canada Agreement (USMCA)
In your letter, you requested a ruling on the application of the North America Free Trade Agreement (NAFTA). Note that such trade agreement has been replaced by the United States Mexico Canada Agreement (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 —
(i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
(iii) 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 the potting mix contains non-originating ingredients, it is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor is the potting mix produced exclusively from originating materials per GN 11(b)(ii). As such, we must determine whether the product qualifies under GN 11(b)(iii).
As noted, the product is classified under subheading 1404.90.9000, HTSUS. The applicable change in tariff classification rules for products classified in that subheading is in General Note 11(o)/14.1, HTSUS, which provides as follows:
“A change to headings 1401 through 1404 from any other chapter.”
The potting mix under consideration contains the following non-originating ingredients that must undergo the tariff shift: Pinus radiata bark (New Zealand, 1404.90.9000) and expanded clay (Germany, 6806.20.0000). Since there is only one non-originating ingredient classified in a Chapter other than Chapter 14, while the other material is classified within the stated headings, the tariff shift rule has not been met. Thus, the Molly’s Aroid Potting Mix would not be an eligible good 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.
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, please contact National Import Specialist Ekeng Manczuk at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division