CLA-2-21:OT:RR:NC:N2:228
Matthew Abell
The LIV Group, Inc., Subsidiary of Unilever
777 Aviation Blvd, Suite 105 El Segundo, CA 90245
RE: The tariff classification and country of origin of electrolyte drink mixes from Canada
Dear Mr. Abell:
In your letter dated April 12, 2023, you requested a binding ruling on the tariff classification and country of origin on two varieties of electrolyte drink mixes.
An ingredients breakdown, a manufacturing flowchart, product specification sheets and pictures of the products accompanied your inquiry.
The electrolyte drink mixes will be imported from Canada in powdered form and are prepared in two different varieties – lemon lime and passion fruit. Ingredients common to all are said to be pure cane sugar (Argentina, Belize, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Paraguay, or U.S.A), dextrose (China), citric acid (China), salt (U.S.A), potassium citrate (China), sodium citrate (China), dipotassium phosphate (Thailand), silicon dioxide (U.S.A), rebaudioside A (China), ascorbic acid (U.S.A.), and vitamin blend (U.S.A.). The lemon lime flavor (U.S.A) will be an additional component to the lemon lime electrolyte drink mix.
The products are said to be prepared by blending the ingredients together in Canada and packaging in 2,200-pound supersacks for import to the U.S. Upon importation, the products will be repackaged for retail sale in 16-gram sticks, packed 16 sticks per package. The ultimate consumer will be directed to empty the contents of the stick into 16 ounces of water and mix thoroughly prior to drinking.
Classification:
The applicable subheading for the electrolyte drink mixes, if imported in quantities that fall within the limits described in additional U.S. note 8 to chapter 17, will be 2106.90.9500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included … other … 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. If the quantitative limits of additional U.S. note 8 to chapter 17 have been reached, the products will be classified in subheading 2106.90.9700, HTSUS, and dutiable at the general rate of 28.8 cents per kilogram plus 8.5 percent ad valorem.
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 at https://hts.usitc.gov/current.
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. See 19 C.F.R. § 102.11. Applied in sequential order, 19 C.F.R. 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. The subject merchandise is 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). The subject merchandise is classified under subheading 2106.90.9500, HTSUS, if imported in quantities that fall within the limits described in additional U.S. note 8 to chapter 17, or subheading 2106.90.9700, HTSUS, if the quantitative limits of additional U.S. note 8 to chapter 17 have been reached. The applicable tariff shift requirement in Part 102.20 for the subject merchandise of subheading 2106.90, HTSUS, consists of the following, in relevant part: A change to a good of subheading 2106.90, other than to compound alcoholic preparations, from any other subheading, except from Chapter 4, Chapter 17, heading 2009, subheading 1901.90 or subheading 2202.90; or A change to subheading 2106.90 from Chapter 17, provided that the good contains less than 65 percent by dry weight of sugar. The electrolyte drink mixes contain the following non-originating ingredients that need to undergo the tariff shift: pure cane sugar (when sourced from Argentina, Belize, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Paraguay), dextrose (China), citric acid (China), potassium citrate (China), sodium citrate (China), dipotassium phosphate (Thailand), and rebaudioside A (China). Except for the pure cane sugar, all the remaining non-originating ingredients satisfy the required tariff shift. Because the foreign material (pure cane sugar) is classified in Chapter 17, HTSUS, the products must contain less than 65 percent by dry weight of sugar to satisfy the tariff shift requirement. Based on the information provided, the dry weight of sugar contained in the product is less than 65 percent. Accordingly, the tariff shift rule set forth 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 of the electrolyte drink mixes for marking purposes is Canada.
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, please contact National Import Specialist Timothy Petrulonis at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division