CLA-2-04:OT:RR:NC:N2:231
Mr. James King
Delmar International (N.Y.) Inc.
1 Lincoln Blvd., Suite 201
Rouses Point, NY 12979
RE: The tariff classification and eligibility of the United States-Mexico-Canada Agreement (USMCA) of Whipped Cream from Canada
Dear Mr. King:
In your letter dated June 19, 2024, you requested a binding ruling on the tariff classification and United States-Mexico-Canada Agreement (USMCA) eligibility of two whipped cream products on behalf of your client, Gay Lea Foods Co-operative Ltd. (Mississauga, Ontario, Canada).
An ingredients breakdown and process flow charts accompanied your inquiry.
The subject merchandise is Gay Lea Real Whipped Cream in an aerosol can. The product composed of cream (45-55 percent, Canada), water (25-30 percent, Canada), sugars (8-18 percent, Canada, United States, Mexico, Argentina, Belize, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Paraguay), skim milk powder (4-8 percent, Canada), nitrous oxide (<4 percent, Canada), mono and diglyceride (<1 percent, United States), carrageenan gum (<1 percent, United States), and natural flavor (< 1 percent, United States, China, France, Indonesia, and Jamaica). The ready-to-eat product will be packed 12 cans per case. Gay Lea Real Whipped Cream is not yet available in the marketplace.
The subject merchandise is also Gay Lea Real Whipped Cream Light in an aerosol can. The product is composed of water (42-50 percent, Canada), cream (24-30 percent, Canada), sugars (10-20 percent, Canada, United States Mexico, Argentina, Belize, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Paraguay), skim milk powder (5-10 percent, Canada), nitrous oxide (<4 percent, Canada), mono and diglyceride (<1 percent, United States), carrageenan gum (<1 percent, United States), and natural flavor (<1 percent, United States, China, France, Indonesia, and Jamaica). The ready-to-eat product will be packed 12 cans per case. Gay Lea Real Whipped Cream Light is not yet available in the marketplace.
Classification:
In your letter, you suggested that the two whipped cream products, if entered under quota, will be classifiable under 0402.99.7000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Milk and cream, concentrated or containing added sugar or other sweetening matter: Other: Other: Other: Described in additional U.S. note 10 to this chapter and entered pursuant to its provisions. We agree. The general rate of duty will be 17.5 percent ad valorem.
The applicable subheading for the whipped cream products, if entered after the quota has closed, will be 0402.99.9000, HTSUS, which provides for: Milk and cream, concentrated or containing added sugar or other sweetening matter: Other: Other: Other: Other. The general rate of duty will be 46.3 cents per kilogram plus 14.9 percent ad valorem.
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)); or
Since the whipped cream products contain non-originating ingredients, they are 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 products are classified under subheadings 0402.99.7000 or 0402.99.9000, HTSUS. The applicable rule of origin for goods classified under these subheadings is in GN 11(o)/4.1, HTSUS, which provides [a] change to headings 0401 through 0404 from any other chapter, except from tariff items 1901.90.32, 1901.90.33, 1901.90.34, 1901.90.36, 1901.90.38, 1901.90.42 or 1901.90.43.
The two products are said to contain the following non-originating ingredients that need to undergo the tariff shift: sugars from sugars from not only Canada, the United States and Mexico, but also Argentina, Belize, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Paraguay (4-10 percent), and natural flavor from the United States, China, France, Indonesia, and Jamaica (less than 1 percent).
Since the non-originating ingredients are all classified in a Heading other than Heading 0401 through 0404, and since the non-originating ingredients are not classifiable in tariff items 1901.90.32, 1901.90.33, 1901.90.34, 1901.90.36, 1901.90.38, 1901.90.42 or 1901.90.43, then the tariff shift rule is met. Accordingly, the two products are eligible for preferential tariff treatment under the USMCA.
Based on the facts provided, the two whipped cream products described above qualify for USMCA preferential tariff treatment because they will meet the requirements of HTSUS General Note 11(b)(iii). The products will therefore 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.
The importation of this product may be subject to import regulations administered by the U.S. Department of Agriculture (U.S.D.A.). Information regarding applicable regulations administered by the U.S.D.A. may be addressed to that agency at the following location:
U.S. Department of Agriculture A.P.H.I.S., PPQ 4700 River Road, Unit 136 Riverdale, MD 20737
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).
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 the Web site www.fda.gov/oc/bioterrorism/bioact.html.
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