The tariff classification, marking and status under the North American Free Trade Agreement (NAFTA), of "Chiller" a Tomato and Clam juice beverage from Canada; Article 509.

N058327 May 19, 2009 CLA-2-22:OT:RR:NC:232 CATEGORY: Classification TARIFF NO.: 2202.90.9090 Ms Sharon L. Rolfe USP Supply Chain Solutions P.O. Box 164 Sweet Grass, MT 59484 RE: The tariff classification, marking and status under the North American Free Trade Agreement (NAFTA), of “Chiller” a Tomato and Clam juice beverage from Canada; Article 509. Dear Ms. Rolfe: In your letter dated April 14, 2009, on behalf of client, Lucerne Foods; you requested a ruling on the status of “Chiller”, a Tomato and Clam juice beverage from Canada under the NAFTA. Samples were submitted with your original request; they were reviewed and destroyed. The subject merchandise is described as “Chiller”, a tomato and clam juice from Canada. The beverage is said to contain 81.5 percent water, 3.9 percent clam spice blend, 0.6 percent MSG (mono sodium glutamate), 5.3 percent tomato paste and 8.7 percent corn syrup. The beverage is manufactured in a factory located in Taber, Alberta Canada by blending clam spice and water from Canada, tomato paste and corn syrup solids from the United States and MSG from China. It will be imported in 1 liter juice box cartons for retail sale. The applicable subheading for the “Chiller” Tomato and Clam juice beverage will be 2202.90.9090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for 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: Other: Other…Other. The rate of duty will be 0.2 cents per liter. 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, or(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the non-originating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,       provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.Based on the facts provided, the MSG is produced in the following non-NAFTA country, China. The non-originating materials, the tomato paste and corn syrup are produced in the United States, have satisfied the change in tariff classification. The “Chiller” as described above qualifies for NAFTA preferential treatment because it will meet the requirements of HTSUS General Note 12(t) 22.6. If classified under subheading 2202.90.9090, HTSUS, the good will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. Your inquiry also requests a ruling on the country of origin marking requirements for imported articles, which is processed in a NAFTA country prior to being imported into the U.S. A marked sample was 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 MSG, tomato paste and the corn syrup solids are processed in a NAFTA country "Canada" prior to being imported into the U.S. Since, "Canada" 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 blends are goods 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, when the MSG, tomato paste and corn syrup solids meet the tariff change requirements and the good is blended and produced in Canada. This makes the product, “Chiller”, a good of “Canada”, for marking purposes, noting the requirements of Section 102.11(3). A sample of the beverage, “Chiller”, was submitted for marking approval. Near the nutritional facts panel are the words "PRODUCT OF CANADA” in close proximity to the words "DISTRIBUTOR INFORMATION: DISTRIBUTED BY LUCERNE FOODS INC. P.O. BOX 99, …” which is compliance with the marking requirements set forth in Part 134, of the Customs Regulations. 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