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NY G86384




February 8, 2001

CLA-2-17:RR:NC:SP:232 G86384

CATEGORY: CLASSIFICATION

TARIFF NO.: 1701.99.1000; 1701.99.5000

Mr. Graeme R Honeyfield
Glinso Foods
3554 Round Barn Blvd., Ste. 310
Santa Rosa, CA 95403

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a Sugar/Gelatin Blend 595 from Mexico; Article 509

Dear Mr. Honeyfield:

In your letter dated January 4, 2001 you requested a ruling on the status of a Sugar/Gelatin Blend 595 from Mexico under the NAFTA. Your request also asks for the country for marking purposes of the product.

A sample was included with your request. Information was submitted with your initial request dated November 3, 2000. The subject merchandise is stated to contain 95 percent refined cane or beet sugar (polarity 99.7) and 5 percent gelatin. The product will be imported in 25 kilogram bags, 500 to 1000 kilogram bulk sacks or bulk trucks. After importation, the blend will be combined with 30% to 40% corn syrup, 20% to 26% sugar, 3% to 10% vegetable oils and up to 1% minor ingredients, which may include gelatin, starch, dextrin, color and flavor. The ingredients are used to make toffee products. The sugar in the blend will be either grown and refined in the United States or Mexico, or it will be refined in Mexico from raw sugar imported from a non-NAFTA country such as Australia, Brazil or Africa. The gelatin in the blend will be produced in either the United States, Canada or Brazil.

The applicable subheading for the Sugar/Gelatin Blend 595, if described in additional U.S. note 5 to chapter 17 and entered pursuant to its provisions, will be 1701.99.1000, Harmonized Tariff Schedule of the United States (HTS), which provides for cane or beet sugar and chemically pure sucrose, in solid form: other. The general 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 1701.99.5000, HTS. The general duty rate will be 35.74 cents per kilogram. In addition, except for goods of Canada or Mexico, products classified under subheading 1701.99.5000, HTS, will be subject to additional duties based on their value as described in subheadings 9904.17.08 to 9904.17.15, HTS.

In the case where the sugar is grown and refined in the United States or Mexico, and the gelatin is produced in either the United States or Canada, the Sugar/Gelatin Blend 595, being wholly obtained or produced entirely in the territory of the United States, Mexico and Canada, will meet the requirements of HTSUSA General Note 12(b)(i). If classified under subheading 1701.99.1000, HTS, the Sugar/Gelatin Blend 595 will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. If classified under subheading 1701.99.5000, HTS, and a product of Mexico, the Sugar/Gelatin Blend 595 will be dutiable at the rate of 24.716 cents per kilogram less 0.35 cents per kilogram for each degree under 100 degrees (and fractions of a degree in proportion) but not less than 15.973 cents per kilogram under the NAFTA upon compliance with all applicable laws, regulations and agreements.

In the case where the sugar is grown and refined in the United States or Mexico, and the gelatin is produced in Brazil, the non-originating material used to make the Sugar/Gelatin Blend 595 has satisfied the change in tariff classification required under HTSUSA General Note 12(t)/17. If classified under subheading 1701.99.1000, the Sugar/Gelatin Blend 595 will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. If classified under subheading 1701.99.5000, HTS, and a product of Mexico, the Sugar/Gelatin Blend 595 will be dutiable at the rate of 24.716 cents per kilogram less 0.35 cents per kilogram for each degree under 100 degrees (and fractions of a degree in proportion) but not less than 15.973 cents per kilogram under the NAFTA upon compliance with all applicable laws, regulations and agreements.

In the case where the sugar is refined in Mexico from raw sugar imported from a non-NAFTA country such as Australia, Brazil or Africa, the merchandise would not qualify for preferential treatment under the NAFTA because the non-originating sugar 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 Sugar/Gelatin Blend 595 is 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 Sugar/Gelatin Blend 595 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 presented, we find that in the cases where the sugar is grown and refined in the United States and Mexico, the country of origin for marking purposes of the imported Sugar/Gelatin Blend 595 is the country where the sugar is grown and refined (United States or Mexico), noting Section 102.11(b)(1). In the case where the sugar is refined in Mexico from raw sugar imported from non-NAFTA countries, the country of origin for marking purposes is the country producing the raw sugar (Australia, Brazil, Africa), noting Section 102.11(b)(1).

Noting Section 102.19(b) of the regulations, when the sugar is grown and refined in the United States, making the U.S. the country of origin for marking purposes, the country of origin of the Sugar/Gelatin Blend 595 for Customs duty purposes and for the quota allocation is “Mexico.”

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

This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.

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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