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NY A86301




August 19, 1996

CLA-2-17:RR:NC:FC:232 A86301

CATEGORY: CLASSIFICATION

TARIFF NO.: 1701.91.5400; 1701.91.5800

Mr. John B. Pellegrini
Ross & Hardies
Park Avenue Tower
65 East 55th Street
New York, New York 10022-3219

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Lemonade Mixes from Mexico; Article 509

Dear Mr. Pellegrini:

In your letter dated July 24, 1996, on behalf of 4C Foods Corp., you requested a ruling on the status of Lemonade Mixes from Mexico under the NAFTA. Your request also asks for the country of origin for marking purposes of the products.

The subject merchandise is stated to contain 64.82 percent sugar, 10.16 percent citric acid, 10.97 percent lemon flavoring, 2.67 percent turmeric, 6.04 percent cloudinol, 1.02 percent sodium citrate and 4.32 percent cellose gum. The sugar in Mix A will be produced in Mexico, and the sugar in Mix B will be from non-NAFTA countries. The balance of ingredients in both mixes will be from The United States. The lemonade mixes will be blended in Mexico and imported into the United States in bulk to be repackaged for retail sale.

The applicable tariff provision for the Lemonade Mix A will be 1701.91.5800, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for cane or beet sugar and chemically pure sucrose, in solid form...containing added flavoring matter whether or not containing added coloring... articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17...other. The general rate of duty will be 37.9 cents per kilogram plus 5.7 percent ad valorem.

The Lemonade Mix A, being wholly obtained or produced entirely in the territory of Mexico and the United States, will meet the requirements of HTSUSA General Note 12(b)(i). Goods of Mexico, classifiable in subheading 1701.91.5800 entered under the terms of general note 12 of the Harmonized Tariff Schedule of the United States, and imported in quantities that fall within the quantitative limits described in note 20 to subchapter 6 of chapter 99, HTS, will be free of duty pursuant to subheading 9906.17.39. If the quantitative limits of note 20 to subchapter 6 of chapter 99 have been reached, and if the product is valued not over 31.5 cents per kilogram, it will be dutiable at the rate of 26.5 cents per kilogram in subheading 9906.17.40, HTS. If valued over 31.5 cents per kilogram, the rate of duty will be 84.2 percent ad valorem, pursuant to subheading 9906.17.41, HTS, upon compliance with all applicable laws, regulations and agreements.

The applicable subheading for the Lemonade Mix B, if imported in quantities that fall within the limits described in additional U.S. note 8 to chapter 17, will be 1701.91.5400 Harmonized Tariff Schedules of the United States (HTS), which provides for cane or beet sugar and chemically pure sucrose, in solid form...containing added flavoring matter whether or not containing added coloring...articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17...described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions. The general rate of duty will be 6 percent ad valorem. If the quantitative limits of additional U.S. note 8 to chapter 17 have been reached, the product will be classified in subheading 1701.91.5800, HTS, and dutiable at the rate of 37.9 cents per kilogram plus 5.7 percent ad valorem. In addition, products classified in subheading 1701.91.5800, HTS, will be subject to additional duties based on their value, as described in subheadings 9904.17.49 to 9904.17.56, HTS.

The Lemonade Mix B does not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials used in the production of the good will not undergo the change in tariff classification required by General Note 12(t)/17, HTSUSA.

Your inquiry also requests a ruling on the country of origin marking requirements for an imported article which is processed in a NAFTA country prior to being imported into the U.S. A marked sample was not submitted with your letter for review.

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 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.

You state that the imported lemonade mixes are processed in a NAFTA country "Mexico" prior to being imported into the U.S. Since, "Mexico" is defined under 19 CFR 134.1(g), as a NAFTA country, we must first apply the NAFTA Marking Rules in order to determine whether the imported lemonade mixes is a good of a NAFTA country", and thus subject to the NAFTA marking requirements.

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 imported Lemonade Mix A is a good of Mexico for marking purposes, and the Lemonade Mix B is a good of the country producing the sugar, noting Section 102.11(b)(1).

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 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 John Maria at 212-466-5730.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1301 Constitution Ave., NW, Franklin Court, Washington, DC 20229.

Sincerely,

Roger J. Silvestri
Director,

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