OT:RR:NC:N5:232
Mr. Michael Adachi
Victoria Distillers Inc.
2506 Beacon Ave.
Sidney V8L 1Y2 British Columbia
Canada
RE: The eligibility of the United States-Mexico-Canada Agreement (USMCA) of Gin from Canada
Dear Mr. Adachi:
In your letter dated February 23, 2024, you requested a binding ruling on the eligibility of gin under the United States-Mexico-Canada Agreement (USMCA). The subject merchandise is described as Empress Gin composed of spirits that contain neutral grain alcohol, juniper berries, and other botanicals.
You submitted additional information stating the gin is produced at your Canada distillery from neutral grain alcohol of 192 proof, approximately 40 percent of which neutral grain alcohol originates in the Netherlands and the rest in Canada. At the Canada distillery, the neutral grain alcohol is macerated with botanicals that include juniper (Albania), coriander (India), grapefruit (Spain), cinnamon (Indonesia), ginger (India), and rose (Pakistan). The botanicals and alcohol are distilled to strip away impurities and create full proof 91.7 percent on average gin. The product is then distilled to yield approximately 83 percent recapture of the initial total volume and to remove impurities such as light and heavy alcohols, resulting in gin of approximately 183 proof. In Canada, the gin is then blended with water to 85 proof, packaged in bottles of 375 ml, 750 ml, 1000 ml, and 1750 ml, labeled, boxed, and shipped to the United States.
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 of the 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:
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 non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o));
Since the gin 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 product produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the gin qualifies under GN 11(b)(iii).
The gin is classified under subheading 2208.50.0030, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The applicable rule of origin for goods classified under subheading 2208.50.0030, HTSUSA, is GN 11(o) Chapter 22.09 which states:
No required change in tariff classification to a good of subheadings 2208.30 through 2208.70, provided that the nonoriginating alcoholic ingredients constitute no more than 10 percent of the alcoholic content of the good by volume.
The non-originating grain alcohol from the Netherlands is approximately 40 percent, which exceeds the 10 percent threshold as described by the rules of origin and .the tariff shift rule is inapplicable.
Based on the facts provided, the gin does not qualify for USMCA preferential treatment because it does not meet the requirements of HTSUS General Note 11(b)(iii). The merchandise will therefore not be entitled to a free rate of duty under the USMCA upon compliance with all applicable laws, regulations, and agreements.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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 Frank Troise at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division