CLA-2-18:RR:NC:SP:232 H84093
Mr. Clark D. Bien
Total Foods Corporation
6018 West Maple Rd., Suite 888
West Bloomfield, MI 48322-4404
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a Hot Cocoa Mix from Mexico; Article 509
Dear Mr. Bien:
In your letter dated July 19, 2001 you requested a ruling on the status of a Hot Cocoa Mix from Mexico under the NAFTA. Your request also asks for the country of origin for marking purposes of the product.
A sample was included with your request. Information was submitted with your initial request dated June 19, 2001. The subject merchandise is stated to contain 25.20 percent cocoa mix base, 53.30 percent sugar, 12.05 percent whey powder, 8.25 percent cocoa (Red Dutch), 1.00 percent flour, salt, 0.10 percent vanillin flavor and 0.10 percent gum. The cocoa mix base contains 44.61 percent corn syrup (Brix 80), 31.87 percent soybean oil, 14.34 percent condensed milk (41 percent solids), 3.19 percent milk powder, 3.03 percent water, 0.96 percent emulsifiers, 1.99 percent dipotassium phosphate, and 0.02 percent sodium hydroxide. The sugar is produced in Mexico, and the balance of the ingredients are of United States origin. The product will be manufactured in Mexico, and shipped to the United States in bulk trucks, one ton poly-lined super sacks and 50 or 100 pound paper bags. After importation, the Hot Cocoa Mix will be packaged in consumer and food service packages. The product is a finished mix, and requires only the addition of hot water to make a beverage.
The applicable tariff provision for the Hot Cocoa Mix will be 1806.20.9800, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Chocolate and other food preparations containing cocoa: Other preparations in blocks or slabs weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: other...other...other. The general rate of duty will be 37.2 cents per kilogram plus 8.5 percent ad valorem.
The Hot Cocoa Mix, being wholly obtained or produced entirely in the territory of the United States and Mexico will meet the requirements of HTSUSA General Note 12(b)(i), and will therefore be entitled to a free rate of duty if entered under the terms of general note 12 of the Harmonized Tariff Schedule of the United States, and imported in quantities that fall within the quantitative limits described in U.S. note 20 to subchapter 6 of chapter 99 HTS pursuant to subheading 9906.18.67. If the quantitative limits of U.S. note 20 to subchapter 6 of chapter 99 have been reached, and if the product is valued not over 42.1 cents per kilogram, it will be dutiable at the rate of 7.9 cents per kilogram in subheading 9906.18.68, HTS. If valued over 42.1 cents per kilogram, the rate of duty will be 18.9 percent ad valorem, pursuant to subheading 9906.18.69, HTS, upon compliance with all applicable laws, regulations, and agreements.
Your inquiry also requests a ruling on the country of origin marking requirements for an imported article which is processed in a NAFTA country prior to being imported into the U.S., and on the country of origin for duty and quota allocation purposes. A marked sample was not submitted with your letter for review.
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 the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.
Section 134.1(b) of the regulations, defines "country of origin" as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).
Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.
You state that the imported Hot Cocoa Mix is processed in a NAFTA country "Mexico" prior to being imported into the U.S. Since, "Mexico" is defined under 19 CFR 134.1(g), as a NAFTA country, we must first apply the NAFTA Marking Rules in order to determine whether the imported Hot Cocoa Mix is a good of a NAFTA country", and thus subject to the NAFTA marking requirements.
Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the imported Hot Cocoa Mix is a good of "Mexico" for marking purposes, since it satisfies the requirements of Section 102.11(a)(3).
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 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 John Maria at 212-637-7059.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave., NW, Washington, DC 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division