CLA-2-07:OT:RR:NC:N2:228
Angela Herbert
A.N. Deringer, Inc.
173 West Service Rd Champlain, NY 12919 United States
RE: The country of origin and marking of salad mixes from Canada and Mexico
Dear Ms. Herbert:
In your letter dated March 14, 2023, you requested a binding ruling on the country of origin and marking of salad mixes on behalf of your client, Vegpro International Inc.
An ingredients breakdown, and pictures of the product labeling accompanied your inquiry.
The subject merchandise is described as ready-to-eat salad kits comprised of ingredients from Mexico, Canada, and the United States. Each kit is comprised of ingredients that when mixed create a salad for one individual. All ingredients originate within the United States, Mexico, and Canada, with assembly and packaging occurring in Canada. Additional manufacturing processes that are said to be performed in Canada include the following: the lettuce is cleaned, cut-up into bit size pieces and placed into recycled plastic kit bowls. Inserts are added on top of the lettuce that include various additional ingredients such as the salad dressing, bacon bits, and other components of the salad kits including shredded asiago cheese, croutons, tex mex cheese and seasoned tortillas wraps.
Kit number 1, “Caesar Salad Kit,” is said to contain 63 percent cut romaine lettuce (Canada and/or USA, and/or Mexico), 22 percent Caesar dressing (USA), 7 percent shredded asiago cheese (Canada), 6 percent croutons (Canada), and 2 percent bacon-flavored bits (Mexico). The Caesar Salad Kit will be imported in 175-gram (6.2 oz.) containers.
Kit number 2, “Southwest Salad Kit,” is said to contain 61 percent cut romaine lettuce (Canada and/or USA, and/or Mexico), 23 percent southwest-style dressing (USA), 6 percent each of tex mex cheese (Canada), seasoned tortillas wraps (USA) and 5 percent shredded carrots (Canada and/or USA). The Southwest Salad Kit will be imported in 175-gram (6.2 oz.) containers.
COUNTRY OF ORIGIN AND 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 the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
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.
“Domestic is defined in Section 102.1(d), as “a material whose country of origin as determined under these rules is the same country as the country in which the good is produced.”
“Foreign material” is defined in Section 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.”
In your request, you have stated that the meal kits described above qualify as originating goods under General Note 12 (b) no matter whether the fresh vegetables come from Canada or the United States because they meet the requirements of General Note 12(b)(ii)(A) and 12(t)/7.1. You further state that “Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, the country of origin of the imported meal kits is Canada no matter whether the fresh vegetables come from Canada or the United States.” Based on the analysis set forth below, we disagree with your country of origin and marking statement.
Furthermore, please note that General Note 12(b), Harmonized Tariff Schedule of the United States (HTSUS), sets forth the criteria for determining whether a good is originating under the NAFTA. The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018 and has replaced NAFTA. 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)).
Since the salad kits are comprised of U.S., Canadian, and Mexican components, they are neither wholly obtained or produced, nor produced exclusively from domestic materials. Therefore, sections 102.11(a)(1) and (a)(2) do not apply to the facts presented in this case. 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).
Section 102.11(a)(3) provides that the country of origin is the country in which “each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 CFR 102.20 and satisfies any other applicable requirements of that section.” Each foreign material must be separately analyzed under 19 CFR 102.11(a)(3).
The applicable subheading for the Caesar Salad Kit and Southwest Salad kit, if entered in the period from June 1 to October 31, will be 0705.19.2000, HTSUS, which provides for Lettuce (Lactuca sativa)…fresh or chilled…other. If entered at any other time the salad kits will be classified in subheading 0705.19.4000, HTSUS.
The tariff shift requirement in Part 102.20 for heading 0705, HTSUS, at issue states:
“A change to heading 0701 through 0709 from any other chapter.”
The foreign materials in the Caesar Salad Kit are the bacon-flavored bits (Mexico), Caesar dressing (USA) and cut romaine lettuce (when sourced from the USA, and/or Mexico). The bacon-flavored bits and the Caesar dressing undergo the necessary change in tariff classification. However, the romaine lettuce is classified in subheading 0705.19.20 or 0705.19.40, HTSUS. Since this is the same classification as the Caesar Salad Kit, the tariff shift rule is not satisfied.
The foreign materials in the Southwest Salad Kit are the seasoned tortilla strips (USA), Southwest style dressing (USA) shredded carrots (when sourced from the USA) and the cut romaine lettuce (when sourced from the USA, and/or Mexico). The seasoned tortilla strips, and the Southwest style dressing undergo the necessary change in tariff classification. However, the shredded carrots are classified under subheading 0706.10.1000, HTSUS. The romaine lettuce is classified in subheading 0705.19.20 or 0705.19.40, HTSUS. Accordingly, the tariff shift rule is not satisfied.
Therefore, since each foreign material incorporated in the above salad kits does not undergo an applicable change in tariff classification as set forth in 19 CFR 102.20, the country of origin of the products cannot be determined pursuant to 19 CFR 102.11(a)(3). Because the analysis of sections 102.11(a)(1), 102.11(a)(2) and 102.11(a)(3) does not yield a country of origin determination, we look to section 102.11(b).
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.”
Upon application of GRI 1, no one heading in Chapter 7 of the HTSUS, provides for a mixture of romaine lettuce, and/or carrots, in addition to inserts containing croutons, bacon, cheese, dressing, and tortilla wraps. Accordingly, both the Caesar Salad Kit and Southwest Salad Kit are classified as a set pursuant to General Rule of Interpretation GRI 3 with the essential character imparted by romaine lettuce. When classifying meal kits pursuant to GRI 3(b), CBP generally determines that the component that constitutes the greatest portion by weight of the set gives them their essential character. See HQ H313148. Since the salad kits are classified as a set pursuant to GRI 3(b), Part 102.11(b) is not applicable. Therefore, 19 CFR 102.11(c) must be applied, which provides that:
“Where the country of origin cannot be determined under paragraph (a) or (b) of this section and the good is specifically described in the Harmonized System as a set or mixture, or classified as a set, mixture or composite good pursuant to General Rule of Interpretation 3, the country of origin of the good is the country or countries of origin of all materials that merit equal consideration for determining the essential character of the good.” In Treasury Decision (“T.D.”) 94-4, dated December 17, 1993, Customs gave an example of a determination of origin pursuant to section 102.11(c).
“For example, the countries of origin of a cutlery and dinnerware packaged set from Mexico, which includes 12 knives from Mexico, 12 forks from Korea, 12 spoons from Taiwan, and a plastic case from Japan would be as follows: Mexico, Taiwan and Korea. The plastic case from Japan did not merit equal consideration in determining the essential character of the set.”
In T.D. 94-4, dated December 17, 1993 (59 Fed. Reg. 110, 109), Customs stated the following with regard to section 102.11(c):
“Paragraph (c) of section 102.11 reflects current practice whereby multiple countries of origin may exist for goods that are classified as "sets", and for goods classified as "mixtures" or "composite" goods to which no single component can be found to impart their essential character. However, only the countries of origin of the countries meriting equal consideration for determining the essential character of the good would constitute the country or countries of origin of the good.”
With regard to the Caesar Salad Kit, the cut romaine lettuce (Canada and/or USA, and/or Mexico), Caesar dressing (USA), shredded asiago cheese (Canada), croutons (Canada), and bacon-flavored bits (Mexico) are the materials that merit equal consideration for determining the essential character of the good. With regard to the Southwest Salad Kit, the cut romaine lettuce (Canada and/or USA, and/or Mexico), southwest-style dressing (USA), tex mex cheese (Canada), seasoned tortillas wraps (USA) and shredded carrots (Canada and/or USA) are the materials that merits equal consideration for determining the essential character of the good.
Therefore, in conformity with the example set forth in T.D. 94-4, the countries of origin of the Caesar Salad Kit and Southwest Salad Kit is Canada, Mexico and the U.S. Since the components from the U.S. are not required to be marked with their country of origin pursuant to 19 U.S.C. 1304, the country of origin marking on the salad packaging must only indicate that the salad contains products from Canada and Mexico, but it is not required to indicate that it contains ingredients produced in the United States. Please note, the question of whether the goods may be marked with a phrase such as “Product of U.S.A.” is under the jurisdiction of the U.S. Federal Trade Commission, Bureau of Consumer Protection, Division of Enforcement, which may be contacted for advice at 600 Pennsylvania Avenue N.W., Washington, D.C. 20580, or through the FTC’s website at http://www.ftc.gov.
Your inquiry does not provide enough information for us to rule on the Spring Mix Salad Kit. Your request for a country of origin marking ruling should include: (1) The value of each component of the kit (2) the approximate number of pieces of each component of the salad kit. When this information is available, you may wish to resubmit your request for a ruling.
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 and Border Protection 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, please contact National Import Specialist Timothy Petrulonis at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division