The tariff classification, and status under the North American Free Trade Agreement (NAFTA), of sugar and milk blends from Mexico; Article 509

N225017 August 3, 2012 CLA-2-21:OT:RR:NC:N2:228 CATEGORY: Classification TARIFF NO.: 2106.90.9400 Mr. Michael E. Roll Pisani & Roll LLP 1875 Century Park East – Suite 600 Los Angeles, CA 90067 RE: The tariff classification, and status under the North American Free Trade Agreement (NAFTA), of sugar and milk blends from Mexico; Article 509 Dear Mr. Roll: In your letter dated July 6, 2012, on behalf of Rafi Industries, Inc., you requested a ruling on the status of sugar and milk blends from Mexico under the NAFTA. Two unmarked samples accompanied your letter and were examined and disposed of. The first product is said to consist of 96 percent refined sugar and 4 percent of non-fat dry milk. The second product is said to consist of 99 percent refined sugar and 1 percent of non-fat dry milk. Both products will be imported in a variety of sizes ranging from 50-pound bags to 3000-pound totes. The products will be used as ingredients in the manufacture of bakery, confectionery, and beverage products. The sugar in the blends will be a product of the United States or Mexico, and the non-fat dry milk will be a product of the United States. The blending will take place in Mexico. The applicable subheading for both blends will be 2106.90.9400, Harmonized Tariff Schedule of the United States (HTSUS), which provides for food preparations not elsewhere specified or included…other…other…other…other…other…articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17…other. The general rate of duty will be 28.8 cents per kilogram plus 8.5 percent ad valorem. 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 the World Wide Web at http://www.usitc.gov/tata/hts/. General Note 12(a)(ii), HTSUS, requires that, for NAFTA eligibility, goods produced in Mexico must originate in the territory of a NAFTA party, under the terms of GN 12 (b), and must also qualify to be marked as goods of Mexico under the terms of the NAFTA marking rules (Customs Regulations, 19 CFR 102). 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, that For 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— they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or 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 goods described above are eligible for NAFTA preferential duty treatment because they meet the requirements of HTSUS General Note 12 (b)(i). In addition, we find that no matter whether the blends contain sugar of United States origin, or of Mexico origin, the country of origin of the instant products is Mexico for Customs duty purposes, as set forth in sections 102.19(b), and 102.11(a)(3), of the Customs Regulations respectively. The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. 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 website www.fda.gov/oc/bioterrorism/bioact.html. This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). 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 Bruce N. Hadley, Jr. at (646) 733-3029. Sincerely, Thomas J. Russo Director National Commodity Specialist Division