The tariff classification, country of origin marking and status under the North American Free Trade Agreement (NAFTA), of a chocolate flavored syrup from Canada; Article 509Daniel E. WaltzSquire Patton Boggs (US) LLP2550 M Street NWWashington, D.C. 20037

N289088 September 8, 2017 CLA-2-18:OT:RR:NC:N2:232 CATEGORY: Classification TARIFF NO.: 1806.90.9090 RE: The tariff classification, country of origin marking and status under the North American Free Trade Agreement (NAFTA), of a chocolate flavored syrup from Canada; Article 509 Daniel E. Waltz Squire Patton Boggs (US) LLP 2550 M Street NW Washington, D.C. 20037 Dear Mr. Waltz: In your letter dated August 8, 2017, on behalf of your client. Redpath Sugar, you requested a ruling on the status of chocolate flavored syrup from Canada under the NAFTA. The subject matter is a chocolate flavored syrup that is produced in Canada. It is said to contain liquid sucrose syrup and medium invert syrup, natural chocolate flavor, caramel color, antifoam-foamdoctor, and citric acid. The liquid sugar and medium invert syrup is derived from sugar that is refined in Canada from raw cane sugar produced in Central and South America (Guatemala, Costa Rica, Honduras, El Salvador, Nicaragua, Mexico or Brazil). The natural chocolate flavor is said to have 1-10 percent cocoa powder and is a product of the United States. The caramel color is also a product of the United States. The antifoam-foamdoctor is a product of England and the citric acid is a product of Brazil. All of the ingredients will be blended together in Canada. The finished chocolate flavored syrup will be bottled and labelled before being shipped to the United States. The chocolate flavored syrup not be further processed upon arrival in the United States (it will not be incorporated in another product in the United States or be further refined). It will be shipped packaged (not in bulk). There will be two bottle sizes (750 ml and 375 ml). The chocolate flavored syrup (in both sizes) will be sold to food service industry and the retail market. These chocolate flavored syrup will be used for beverage sweetening (e.g. coffee, teas, cocktails). It will be sold in pump dispensers and the consumer will add the chocolate flavored syrup to the beverage of the consumer’s choice. The applicable tariff provision for the chocolate flavored syrup will be 1806.90.9090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for chocolate and other food preparations containing cocoa: other: other: other. The general rate of duty will be 6 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 World Wide Web at https://hts.usitc.gov/current. 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; 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 nonoriginating 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 chocolate flavored syrup will qualify for NAFTA preferential treatment, because it will meet the requirements of HTSUS General Note 12(b)(ii)(A) and General Note 12(t)/18.4. The goods 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 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. (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.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 chocolate flavored syrup is a good of Canada for marking purposes. 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 Frank Troise at frank.l.troise@.cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division