The tariff classification and country of origin of "Zen" Green Tea Liqueur from Japan

N026583 May 21, 2008 CLA-2-22:OT:RR:NC:232 CATEGORY: Classification TARIFF NO.: 2208.70.0030 Ms Adena M. Santiago, Esq. Buchman Law Firm, LLP 510 Thornall Street Suite 200 Edison, New Jersey 08837 RE: The tariff classification and country of origin of “Zen” Green Tea Liqueur from Japan Dear Ms. Santiago: In your letter dated April 23, 2008, on behalf of your client, Suntory International Corporation, of New York, you requested a tariff classification ruling. The merchandise is described as a beverage containing Green tea, herbs and neutral spirits. The alcohol content is 20 percent by volume. The bulk product is shipped to a plant in Mexico where it is bottled. The bottles are washed, prior to being filled and small amounts of water remain settling inside the bottles. This accumulation of water might dilute the alcohol content of the finished product; therefore, a small amount (.01 percent per volume) of neutral spirits is added to the product to restore the reported alcohol content. The “Zen” liqueur will be imported in 50ml- glass bottles. The applicable subheading for the “Zen” will be 2208.70.0030, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Liqueurs and Cordials…in containers each holding not over 4 liters. The rate of duty will be free. In addition, the “Zen” is subject to a Federal Excise Tax of $13.50 per proof gallon and a proportionate tax rate at the like rate on all fractional parts of a proof gallon. Your inquiry also requests a ruling on the country of origin determination for an alcoholic beverage manufactured in Japan and bottled in Mexico prior to being imported into the United States. Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)) provides that the “country of origin” means the country of manufacture, production, or growth of any 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 the marking laws and regulations. An article used in manufacture which results in an article having a name, character, or use differing from that of the constituent article will be considered substantially transformed. In this case, we must first determine if the product undergoes a substantial transformation. We must consider what effect, if any, the bottling process and the addition of neutral spirits has on the “Zen” liqueur. HQ ruling 562642, dated April 14. 2003, in which we held that grain neutral alcohol imported and converted into vodka and subject to a production process similar to that utilized in the case under consideration was not substantially transformed. Subsequent operations (dilution of the neutral alcohol and bottling), do not render a substantial transformation of the vodka. As mentioned above, these processes are limited in scope: the bulk product Zen Green Tea Liqueur (“Zen”) is bottled in Mexico with an addition of .01 of neutral spirits. Neither process results in a substantial transformation of the “Zen”, as the “Zen” has not been converted into a different article of commerce with a new name, character or use. The fundamental character of the product is not altered. The merchandise at issue, Zen Green Tea Liqueur (‘Zen”) manufactured in Japan, bottled in Mexico is a product of Japan for purposes of compliance with 19 CFR 134.1(b). 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 World Wide Web at http://www.usitc.gov/tata/hts/. 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 telephone number (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, contact National Import Specialist Frank Troise at 646-733-3031. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division