CLA-2-19:OT:RR:NC:N2:N232
Ilana Green
Fresh Hemp Foods Ltd.
69 Eagle Drive
Winnipeg R2R 1V4
Canada
RE: The classification, country of origin, marking and eligibility of the United States-
Mexico-Canada Trade Agreement (USMCA) for “Super seed cereal – Maple Brown Sugar” from Canada
Dear Ms. Green:
This is in response to your letter dated March 17, 2023, requesting a ruling on the classification, country of origin, marking and the eligibility of the USMCA on “Super seed cereal - Maple Brown Sugar.” An ingredients breakdown, a cost breakdown, and a photo of the product were included with your inquiry.
The subject merchandise, “Super seed cereal – Maple Brown Sugar” is described as a dry blend composed of quick oats, hemp hearts, brown sugar, flaxseeds, maple flakes, ground cinnamon, and salt. The finished product will be packed in individual sachets, 5 single serving sachets in a master pouch for retail sale. The user is instructed to add water to the product and heat in the microwave for one minute.
Classification:
The applicable subheading for the “Super seed cereal – Maple Brown Sugar” if in airtight containers, will be 1904.20.1000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Prepared foods obtained from unroasted cereal flakes or from mixtures of unroasted cereal flakes and roasted cereal flakes or swelled cereals: In airtight containers and not containing apricots, citrus fruits, peaches or pears. The rate of duty will be 5.6 percent ad valorem.
The applicable subheading for the “Super seed cereal – Maple Brown Sugar” if the containers are not airtight, will be 1904.20.9000, HTSUS, which provides for Prepared foods obtained from unroasted cereal flakes or from mixtures of unroasted cereal flakes and roasted cereal flakes or swelled cereals: Other. The rate of duty will be 14.9 percent ad valorem.
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.
You suggest the following scenarios for importation of this merchandise, asking for advice on each one.
Scenario 1: The quick oats, hemp hearts, flaxseed and maple flakes are of Canadian origin. The brown sugar is a product of Brazil. The ground cinnamon is a product of Vietnam. The salt is of US origin.
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 “Super seed cereal – Maple Brown Sugar” is neither wholly obtained nor produced exclusively from “domestic” (Canada, in this case) materials. The applicable tariff shift requirement in section 102.20 for the “Super seed cereal – Maple Brown Sugar” of subheading 1904.20, HTSUS, consists of the following:
A change to subheading 1904.20 from any other heading.
Because the foreign materials (brown sugar, ground cinnamon and salt) contained in the “Super seed cereal – Maple Brown Sugar” are classified in subheadings outside of subheading 1904.20, 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 “Super seed cereal – Plain” for marking purposes is Canada.
Scenario 2: The quick oats, hemp hearts, and flaxseed are products of Canada. The maple flakes and salt are products of the US. The brown sugar is a product of Brazil. The ground cinnamon is a product of Vietnam.
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 “Super seed cereal – Maple Brown Sugar” is neither wholly obtained nor produced exclusively from “domestic” (Canada, in this case) materials. The applicable tariff shift requirement in section 102.20 for the “Super seed cereal – Maple Brown Sugar” of subheading 1904.20, HTSUS, consists of the following:
A change to subheading 1904.20 from any other heading.
Because the foreign materials (maple flakes, salt, brown sugar and ground cinnamon) contained in the “Super seed cereal – Maple Brown Sugar” are classified in subheadings outside of subheading 1904.20, 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 “Super seed cereal – Plain” for marking purposes is Canada.
Scenario 3: The quick oats and salt are products of the US. The hemp hearts, flaxseeds, and maple flakes are of products of Canada. The brown sugar is a product of Brazil. The ground cinnamon is a product of Vietnam.
Scenario 4: The quick oats and maple flakes are products of the US. The hemp hearts and flaxseed are products of Canada. The brown sugar is a product of Brazil. The ground cinnamon is a product of Vietnam.
In scenario 3 and scenario 4, 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 “Super seed cereal – Maple Brown Sugar” is neither wholly obtained nor produced exclusively from “domestic” (Canada, in this case) materials. The applicable tariff shift requirement in section 102.20 for the “Super seed cereal – Maple Brown Sugar” of subheading 1904.20, HTSUS, consists of the following:
A change to subheading 1904.20 from any other heading.
The “Super seed cereal – Maple Brown Sugar” does not meet the tariff shift because the foreign materials, quick oats (Product of U.S.A.), are also classified under heading 1904. 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 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 quick oats from the U.S. are 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 “Super seed cereal – Maple Brown Sugar” for marking purposes is the United States.
Please note that 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.
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 “Super seed cereal – Maple Brown Sugar” 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 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 “Super seed cereal – Maple Brown Sugar” is classified under subheading 1904.20, HTSUS. The applicable rule of origin for goods classified under subheading 1904.20, HTSUS, is in GN 11(o), HTSUS, which provides in relevant part:
A change to subheading 1904.20 from any other subheading, except from chapter 20.
Since the non-originating components (brown sugar and ground cinnamon) are classified in a heading other than subheading 1904.20, the tariff shift rule is met. Therefore the “Super seed cereal – Maple Brown Sugar” is considered an originating good under the USMCA and is eligible for preferential treatment.
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 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, please contact National Import Specialist Frank Troise at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division