The country of origin and status under the North American Free Trade Agreement (NAFTA) of an encapsulated product from Canada or Mexico; Article 509

N233469 October 11, 2012 MAR-2-21:OT:RR:NC:N2:228 CATEGORY: MARKING Ms. Deanna M. Jones Banner Pharmacaps Inc. 4125 Premier Drive High Point, NC 27265 RE: The country of origin and status under the North American Free Trade Agreement (NAFTA) of an encapsulated product from Canada or Mexico; Article 509 Dear Ms. Jones: In your letter dated September 19, 2012, you requested a ruling on the status of finished fish oil and phytosterol esters capsules from Canada or Mexico under the NAFTA and a NAFTA country of origin determination. An ingredients breakdown for Enteric Fish with Phytosterols (Item no. 2000125) accompanied your letter. Additional information was provided via email transmissions on October 4, 2012. The product is said to be a capsule filled with fish oil and phytosterol esters. The stated ingredients are phytosterol esters paste, chemically modified fish oil (EPA2E1700MEG-3), gelatin, glycerin, water, pectin, and calcium chloride. The fish oil is said to be derived from anchovy, sardine, mackerel or a combination thereof. The phytosterol esters paste and glycerin are produced in the United States. The fish oil is a product of Peru. The gelatin is a product of France. The pectin is a product of Denmark. The calcium chloride is a product of the Czech Republic. The water is sourced from Canada. In Canada or Mexico, the ingredients are encapsulated into capsules. The resulting capsules will be shipped to the United States in bulk, where they are bottled and labeled after importation and distributed to U.S. customers for human consumption. 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-- (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; . . . . 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)/21.14. 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 to 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. 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. As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain. 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 country of origin of the Enteric Fish with Phytosterols for marking purposes is the United States. When the product is produced in Canada or Mexico, the country of origin for Customs duty purposes will be Canada or Mexico. Products of the United States are not subject to the country of origin marking requirements of 19 U.S.C. 1304. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you direct any questions on this issue to the FTC. 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 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