CLA-2-16:RR:NC:2:231 A89387
Mr. Chris Leach
Mitsubishi International Corporation
333 South Hope Street, Suite 2500
Los Angeles, CA 90071
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of canned tuna from Mexico; Article 509
Dear Mr. Leach:
In your letter dated November 5, 1996, you have requested a ruling on the status of canned tuna from Mexico under the NAFTA.
The product is made from tuna of U.S. origin. The importer will purchase domestically frozen fish (albacore/yellowfin/ skipjack) caught by U.S. flag vessels. The fish will be sent to Mexico, where the following processing steps will be carried out:
1. The frozen fish will be thawed in a fish tank.
2. All fish will be gutted. Larger sized fish will be cut.
3. The fish will be pre-cooked.
4. The fish will be cooled.
5. The loins will be cleaned to remove meat with blood.
6. The cans will be filled with water or vegetable oil.
7. The cans will be seamed.
8. The cans will be sterilized.
9. The cans will be labeled and boxed.
The applicable tariff provision for the canned tuna, if packed in airtight containers and in oil, will be 1604.14.1000, Harmonized Tariff Schedule of the United States (HTS), which provides for prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs, fish, whole or in pieces, but not minced, tunas, skipjack and bonito (Sarda spp.), tunas and skipjack, in airtight containers, in oil. The general rate of duty will be 25 percent ad valorem.
The canned tuna, if packed in airtight containers and in oil, being wholly obtained or produced entirely in the territories of Mexico and the United States, will meet the requirements of HTSUSA General Note 12(b)(i), and will therefore be entitled to a 7 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
The applicable tariff provision for the canned tuna, if packed in airtight containers and not in oil, and if in containers weighing with their contents not over 7 kilograms each, and if albacore (Thunnus alalunga), will be 1604.14.2020, HTS, which provides for prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs, fish, whole or in pieces, but not minced, tunas, skipjack and bonito (Sarda spp.), tunas and skipjack, in airtight containers, not in oil, in containers weighing with their contents not over 7 kilograms each, and not the product of any insular possession of the United States, for an aggregate quantity entered in any calendar year not to exceed 20 percent of the United States pack of canned tuna during the immediately preceding year, as reported by the National Marine Fisheries Service, albacore (Thunnus alalunga). If the aforementioned canned fish is other than albacore (Thunnus alalunga), it is classifiable in subheading 1604.14.2040, HTS. The general rate of duty will be 6 percent ad valorem.
Canned tuna classifiable in subheadings 1604.14.2020, HTS, and 1604.14.2040, HTS, being wholly obtained or produced entirely in the territories of Mexico and the United States, will meet the requirements of HTSUSA General Note 12(b)(i), and will therefore be entitled to a 1.2 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
The applicable tariff provision for the canned tuna, if packed in airtight containers and not in oil, and if not in containers weighing with their contents not over 7 kilograms each, and if albacore (Thunnus alalunga), will be 1604.14.3020, HTS. If the aforementioned canned fish is other than albacore (Thunnus alalunga), it is classifiable in subheading 1604.14.3040, HTS. The general rate of duty will be 12.5 percent ad valorem.
Canned tuna classifiable in subheadings 1604.14.3020, HTS, and 1604.14.3040, HTS, being wholly obtained or produced entirely in the territories of Mexico and the United States, will meet the requirements of HTSUSA General Note 12(b)(i), and will therefore be entitled to a 2.5 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
In your correspondence you inquire as to the applicability of the partial duty exemption available under subheading 9802.00.50, HTS. Subheading 9020.00.50, HTS, provides for articles returned to the United States after having been exported to be advanced in value or improved in
condition by any process of manufacture or other means, articles exported for repairs or alterations, other. Entitlement to this tariff treatment is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. See A.F. Burstrom v. United States, 44 CCPA 27, CAD 631 (1956). We note that the manufacturing process that is described in your letter indicates that the fish is cut, gutted, and canned. This procedure constitutes a manufacturing process that exceeds the scope of the term "alteration" for the purposes of subheading 9802.00.50, HTS. The process not only destroys the identity of the exported articles, but it results in the creation of new articles of commerce. Therefore, the fish is not entitled to a partial duty exemption upon return to the U.S. and 9802.00.50, HTS, does not apply.
You inquire as to the country of origin marking requirements under the NAFTA. Based on the country of origin determinations under the NAFTA that are articulated in 19 CFR Part 102, and the fact that there is a tariff shift from Chapter 3 to Chapter 16, the merchandise becomes a product of Mexico for marking purposes.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR 181).
This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.
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, contact National Import Specialist Ralph Conte at (212) 466-5759.
Sincerely,
Roger J. Silvestri
Director
National Commodity
Specialist Division