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March 3, 1999

CLA-2-17:RR:NC:SP:232 D87860

CATEGORY: CLASSIFICATION

TARIFF NO.: 1701.91.1000; 1701.91.3000

Mr. Frank M. Murphy
Norman G. Jensen, Inc.
P.O. Box 8008
3030 Commerce Drive
Port Huron, Michigan 48061-8008

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Sparkling Sugar from Canada; Article 509

Dear Mr. Murphy:

In your letter dated February 5, 1999, on behalf of Au Printemps Gourmet Fin d’Hiver, Inc., you requested a ruling on the status of Sparkling Sugar from Canada under the NAFTA. Your request also asks for the country of origin for marking purposes of the product.

Samples were included with your request. The subject merchandise is described as sparkling sugar and consists of colored sugar packaged for retail sale in plastic tubes with a snap off plastic cap at the end. The plastic tubes are inside a cardboard box, which allows the tubes to be viewed from the front and the back. The sugar is in coarse rectangular pieces, and will be imported in six colors: red, yellow, blue, green violet, and pink. The sparkling sugar is produced in the United States from raw cane sugar imported from various tropical and subtropical countries. The raw sugar is processed by washing, dissolving in water and clarification. It is then passed over charcoal, filtered through diatomaceous earth, evaporated and centrifuged. The coarse crystals are then manually coated with food colors in small batches using a candy pan. A small amount of carnauba wax is added for luster. The red colored crystals also contain some maltodextrin. The crystals are packaged in 50 pound bags for shipment to Canada, where they are packaged for retail sale in the plastic tubes, and then exported to the United States.

The applicable subheading for sparkling sugar, if described in additional U.S. note 5 to chapter 17 and entered pursuant to its provisions, will be 1701.91.1000, Harmonized Tariff Schedule of the United States (HTS), which provides for cane or beet sugar and chemically pure sucrose in solid form: other...containing added coloring but not containing added flavoring matter. The rate of duty will be 3.6606 cents per kilogram less 0.020668 cents per kilogram for each degree under 100 degrees (and fractions of a degree in proportion) but not less than 3.143854 cents per kilogram. If not described in additional U.S. note 5 to chapter 17 and not entered pursuant to its provisions, the applicable subheading will be 1701.91.3000, HTS. The duty rate will be 36.79 cents per kilogram. In addition, products classified under subheading 1701.91.3000, HTS, will be subject to additional duties based on their value as described in subheadings 9904.17.08 to 9904.17.15, HTS.

The merchandise does not qualify for preferential treatment under the NAFTA because the raw sugar used in the production of the goods will not undergo the change in tariff classification in the United States or in Canada as required by General Note 12(t)/17, HTSUSA.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

Your inquiry also requests a ruling on the country of origin marking requirements for imported articles which are 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.

The imported sparkling sugar is processed in a NAFTA country "Canada" prior to being imported into the U.S. Since, "Canada" 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 sparkling sugar 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 sparkling sugar is a good of the country producing the raw sugar for marking purposes. Noting Section 102.11(a)(3), the foreign raw sugar does not undergo the applicable change in tariff classification set out in Section 102.20 by the processing in the United States. The raw sugar is the material that imparts the essential character of the product, noting Section 102.11(b)(1). The sparkling sugar does not undergo the applicable change in tariff classification specified in Section 102.20 by the retail packaging in Canada, noting Section 102.17(c). Therefore, the sparkling sugar is not a product of the United States and cannot be classified under subheading 9801.00.10, HTS. The sparkling sugar must be marked with the country or countries of origin producing the raw sugar. 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 212-637-7059.

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, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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