HQ 556101 - Eligibility of jam, jelly and marmalade from the Commonwealth of Dominica for duty-free treatment under the CBERA - United States International Trade Commision Rulings

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HQ 556101

August 26, 1991

CLA-2 CO:R:C:S 556101 WAW

CATEGORY: CLASSIFICATION

Ms. Daphne Duverney
Duverney International
Trading Company
408 St. Johns Pl. - 6B
Brooklyn, N.Y. 11238

RE: Eligibility of jam, jelly and marmalade from the Commonwealth of Dominica for duty-free treatment under the CBERA

Dear Ms. Duverney:

This is in response to your letter dated June 12, 1991, requesting a ruling on the eligibility of jams, jellies and marmalades imported from the Commonwealth of Dominica, West Indies, for duty-free treatment under the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2710-2706).

FACTS:

You state that the Green Mountain Company Ltd., manufactures Nature Island jams, jellies, and marmalades in the Commonwealth of Dominica. The jams, jellies, and marmalades are made from pineapple, lemon, orange, grapefruit and mango fruit which originate in the Caribbean. In addition, you state that sugar, pectin, citric acid, lime juice and sodium benzoate are mixed together with the fruit to create the final product. These additional ingredients also originate in the Caribbean. You contend that the entire production of the jams, jellies, and marmalades will be performed in the Caribbean.

ISSUE:

Whether the jams, jellies, and marmalades produced in the Commonwealth of Dominica are entitled to duty-free treatment under the CBERA when imported into the U.S.

LAW AND ANALYSIS:

Under the CBI, eligible articles the growth, product or manufacture of designated beneficiary countries (BC's), may enter the U.S. free of duty if such articles are imported directly to the U.S. from the BC, and if the sum of (1) the cost or value of the materials produced in a BC or BC's, plus (2) the direct cost of processing operations performed in a BC or BC's, is not less than 35% of the appraised value of the article at the time it is entered into the U.S. See 19 U.S.C. 2703(c). The cost or value of materials produced in the U.S. may be applied toward the 35% value-content minimum in an amount not to exceed 15% of the imported article's appraised value. See section 10.195(c), Customs Regulations (19 CFR 10.195(c)).

The Commonwealth of Dominica is a BC. See General Note 3(c)(v)(A), Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Based on your description of the products which you intend to import, it appears that the jams, jellies and marmalades will be classified for tariff purposes under heading 2007, HTSUSA, which provides for jams, fruit jellies, marmalades, fruit or nut puree and fruit or nut pastes, being cooked preparations, whether or not containing added sugar or other sweetening matter. Without a more complete description of the goods we are unable to classify them under the appropriate subheading at this time. However, each subheading which appears under heading 2007, HTSUSA, is a CBERA-eligible provision. Accordingly, if the jams, jellies, and marmalades are considered a "product of" Dominica and the 35% value-content minimum is met, the products will be entitled to duty-free treatment under the CBERA.

Under the Customs Regulations implementing the CBERA, an eligible article may receive duty-free treatment if it is either wholly the growth, product, or manufacture of a beneficiary country or a new or different article of commerce which has been grown, produced, or manufactured in the BC. See 19 CFR 10.195.

As you state that all of the fruit and other ingredients used to manufacture the jams, jellies, and marmalades will originate from CBERA BC's, it is clear that the products will satisfy the CBERA 35% value-content requirement. See 19 CFR 10.195(d). In addition, the jams, jellies, and marmalades will be considered a "product of" Dominica for purposes of the first country of origin criterion, since the products are wholly the growth, product or manufacture of a CBERA BC.

We have enclosed for your information a copy of the Customs Regulations relating to the CBERA (19 CFR 10.191-10.198).

HOLDING:

Based on the information provided, the jams, jellies, and marmalades are a "product of" a BC, since they are produced entirely from fruit and other ingredients which originate from CBERA BC's. Therefore, since the sum of the BC material costs plus the direct processing costs incurred in the Commonwealth of Dominica will represent more than 35% of the product's appraised value, the jams, jellies, and marmalades will be entitled to duty-free treatment under the CBERA, assuming they are imported directly to the U.S.

Sincerely,

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