The tariff classification and eligibility of the United States-Mexico-Canada Agreement (USMCA) of Butter Herb Shrimp

N359531 March 27, 2026 OT:RR:NC:N5:231 CATEGORY: Origin; Trade Agreement Sean Xia Clear Ocean Seafood Ltd. 2145-21331 Gordon Way Richmond, B.C. V6W 1J9 Canada RE: The tariff classification and eligibility of the United States-Mexico-Canada Agreement (USMCA) of Butter Herb Shrimp Dear Mr. Xia: In your letter dated March 6, 2026, you requested a country of origin and United States-Mexico-Canada Agreement eligibility determination for Butter Herb Shrimp. The subject merchandise is “Butter Herb Shrimp,” consisting of frozen raw shrimp initially harvested, peeled, and deveined in Thailand and imported into Canada, with India serving as an alternative country of supply in the event of shortages. In Canada, a butter herb sauce is prepared by mixing, pasteurizing, and packaging ingredients sourced from multiple countries, including canola oil, salt, black pepper, rosemary, oregano, parsley, and skim milk powder (Canada); maltodextrin, glucose, natural flavor, and lemon juice concentrate (United States); mono- and diglycerides (Malaysia); and ascorbic acid (China). The finished product is composed of approximately 75 percent shrimp (Thailand and/or India) and 25 percent sauce. In Canada, processing operations include removal of the original shrimp packaging, thawing, butterfly cutting, mixing the shrimp with the prepared sauce, refreezing, weighing, and packaging into low density polyethylene (LDPE) bags for both retail sale and bulk distribution prior to importation into the United States. The product is intended to be cooked prior to consumption. You seek a determination of the origin and applicability of USMCA eligibility of the above-described product. Country of Origin When determining the country of origin, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). The “country of origin” is defined in 19 CFR 134.1(b) as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. 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 the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin.” Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. §102.21. Applied in sequential order, the required hierarchy establishes that: (a) The country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied.. The subject merchandise is neither “wholly obtained or produced” nor “produced exclusively from domestic materials.” Therefore, Sections 102.11(a)(1) and (a)(2) do not apply to the facts presented in this case. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). The subject merchandise is classified under subheading 1605.21.1030, HTSUS. The applicable tariff shift requirement in Part 102.20 for the subject merchandise of subheading 1605.21, HTSUS, states: A change to heading 1603 through 1605 from any other chapter, except from smoked products of heading 0306 through 0308. In this case, the shrimp is classified in subheading 0306.17.0042, HTSUS, prior to processing in Canada. Because the rule specifically excludes a tariff shift from heading 0306, the shrimp does not undergo the required tariff shift. The tariff shift is not met. Accordingly, the country of origin of the finished Butter Herb Shrimp is the country of origin of the shrimp, namely Thailand or India, depending on the source of the shrimp used in production. USMCA The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if— (i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; (ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; (iii) the good is a good produced entirely in the territory of one or more USMCA countries using non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); Since the subject merchandise contains non-originating ingredients, they are not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor are the products produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether to product qualifies under GN 11(b)(iii). As previously stated, the merchandise at review is classified under subheading 1605.21.1030, HTSUS. The applicable rule of origin for goods classified under subheading 1605.21.1030, HTSUS, is found in GN 11(o), Chapter 16, HTSUS, which provides for “A change to headings 1601 through 1605 from any other chapter.” Based on the facts provided, the goods described above qualify for USMCA preferential tariff treatment, because they will meet the requirements of HTSUS General Note 11(b)(iii). The goods will therefore be entitled to a free rate of duty under the USMCA upon compliance with all applicable laws, regulations, and agreements. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177). Please note that seafood is subject to the Mandatory Country of Origin Labeling (COOL) requirements administered by the USDA’s Agricultural Marketing Service (AMS). We advise you to check with that agency for their further guidance on your scenario. Contact information for AMS is as follows: USDA-AMS-LS-SAT Room 2607-S, Stop 0254 1400 Independence Avenue, SW Washington, DC 20250-0254 Tel. 202.720.4486 Website: www.ams.usda.gov/COOL Email address for inquiries: COOL@usda.gov 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 the FDA at 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html. 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, please contact National Import Specialist Ekeng Manczuk at ekeng.b.manczuk@cbp.dhs.gov. Sincerely, (for) James Forkan Designated Official Performing the Duties of the Division Director National Commodity Specialist Division