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NY G86601




February 8, 2001

CLA-2-18:RR:NC:SP:232 G86601

CATEGORY: CLASSIFICATION

TARIFF NO.: 1806.10.5500

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 SCB 298 Blend from Mexico; Article 509

Dear Mr. Honeyfield:

In your letter dated January 15, 2001 you requested a ruling on the status of SCB 298 Blend from Mexico under the NAFTA.

A sample was included with your request. The subject merchandise is stated to consist of a dry blend of 98 percent refined sugar (polarity 99.7) and 2 percent cocoa powder. The product will be imported in 25 kilogram bags or in 500 to 1000 bulk sacks or bulk trucks. The blend will be used in the manufacture of confectionery products and chocolate drinks. 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 cocoa powder will be manufactured in the United States and/or Indonesia from cocoa beans imported from non-NAFTA countries.

. The applicable tariff provision for the SCB 298 Blend will be 1806.10.5500, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for cocoa powder, containing added sugar or other sweetening matter: containing 90 percent or more by dry weight of sugar...articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17...other. The general rate of duty will be 33.6 cents per kilogram.

Each of the non-originating materials used to make the SCB 298 Blend has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/18. The sweetened cocoa powder will be entitled to a free rate of duty under subheading 9906.18.51, HTS, subject to the quantitative limits specified in U.S. note 18 to subchapter VI. If the quantitative limits of U.S. note 18 to subchapter VI have been reached, and the product is valued not over 31.2 cents per kilogram, the rate of duty will be 7.5 cents per kilogram under subheading 9906.18.52, HTS. If the quantitative limits specified in U.S. note 18 to subchapter VI have been reached, and the product is valued over 31.2 cents per kilogram, the rate of duty will be 24.1 percent ad valorem under subheading 9906.18.53, HTS, under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

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 SCB 298 Blend 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 SCB 298 Blend 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 SCB 298 Blend is a good of “Mexico” for marking purposes, since it satisfies the requirements of Section 102.19 (a).

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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