The tariff classification, country of origin marking, and status under the North American Free Trade Agreement (NAFTA), of iced tea beverages from Canada; Article 509

N040029 October 28, 2008 CLA-2-22:RR:E:NC:N2:232 CATEGORY: Classification TARIFF NO.: 2202.10.0060 Mr. John T. Reich Cataract Customhouse Brokerage, Inc. 2094 Grand Island Boulevard Grand Island, NY 14072 RE: The tariff classification, country of origin marking, and status under the North American Free Trade Agreement (NAFTA), of iced tea beverages from Canada; Article 509 Dear Mr. Reich: In your letter dated September 30, 2008, on behalf of your client Mother Parker’s Tea & Coffee, Inc. of Canada, you requested a classification ruling. Your request also asks for the marking requirements for the products. Descriptive and illustrative information of the products were included with your request. The subject merchandise consists of two types of “Iced Tea Ready- to- Drink” beverages. Citrus Green flavor contains brewed green tea, cane sugar, natural flavor, citric acid and caramel color. Peach Pomegranate flavor contains brewed white tea, cane sugar, natural flavor, citric acid and red dye 40. The percentage breakdown for both flavors is as follows: 91-92 percent water, 7.5-8.5 percent sugar, .03-.05 percent natural flavor, .01-.02 percent tea extract and .01-.02 percent citric acid. You state that the water is from Canada and the tea extract and natural flavor are products of the United States. The “Iced Ready- to- Drink” beverages will be packaged in 16 ounce Polyethylene terephthalate (PET) bottles, 24 PET bottles to a case. The merchandise will be sold to consumers at quick service restaurants. The applicable subheading for the “Iced Tea Ready-to-Drink” Citrus Green and Peach Pomegranate flavors, will be 2202.10.0060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavored, and other nonalcoholic beverages, not including fruit or vegetable juices of heading 2009: Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavored…Other. The duty rate will be 0.2 cents per liter. 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/. General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, thatFor the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, … Based on the facts provided, the product described above qualifies for NAFTA preferential treatment, because it meets the requirements of HTSUS General Note 12(b)(ii)(A) and 12(t)/22.2. The product will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. 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. Photocopies of the labels and three dimension photographs of the actual container, indicate that the, marking will be on the back side, near the bottom of the PET bottle, directly under the ingredient listing. Product is marked as “PRODUCT OF CANADA”. This is followed by the words “DISTRIBUTED BY: TIM HORTONS USA INC, DUBLIN, OHIO 43017”. The clear plastic wrap use to hold the 24 PET bottles in a case is marked “PRODUCT OF CANADA” [ISO Code], TIM HORTON. 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 presented, we find that for the Iced Tea Ready-to-Drink, Citrus Green and Peach Pomegranate, the country of origin for marking purposes is Canada, noting Section 102.20(d).       Section 134.46, Customs Regulations (19 CFR 134.46), deals with cases in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or locality in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appears on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin. In such a case, there shall appear, legibly and permanently, in close proximity to such words, letters, or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," Product of," or other words of similar meaning.  In order to satisfy the close proximity requirement, the country of origin marking must generally appear on the same side(s) or surface(s) in which the name or locality other than the actual country of origin appears. The Iced Tea Ready-to-Drink, Citrus Green and Peach Pomegranate Iced Tea can be marked “Made in Canada" or "Product of Canada" in close proximity to the words “DISTRIBUTED BY: TIM HORTONS USA INC, DUBLIN, OHIO 43017” 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 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