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NY I84522




August 6, 2002

CLA-2-21:RR:NC:2:228 I84522

CATEGORY: CLASSIFICATION

TARIFF NO.: 2106.90.6400; 2106.90.6600

Mr. David M. Dunbar
KMZ Rosenman
525 West Monroe Street, Suite 1600
Chicago, IL 60661-3693

RE: The tariff classification, status under the North American Free Trade Agreement (NAFTA), and country of origin marking of a liqueur base from Canada; Article 509

Dear Mr. Dunbar:

In your letters dated June 27, 2002 and July 23, 2002, on behalf of Kerry Inc., Beloit, WI, you requested a ruling on the status of a liqueur base from Canada under the NAFTA.

The product, described as a Cordial Liqueur Alcohol Base, is a liquid emulsion composed of water, sucrose, alcohol, butterfat, sodium caseinate, monoglycerides, natural and artificial flavors, sodium citrate, dipotassium phosphate dibasic, sodium hexameta phosphate, artificial colors, and sodium stearoyl lactylate. The liqueur base contains 20 percent or less (by weight) alcohol, over 10 percent milk solids, over 5.5 percent butterfat, and over 10 percent (by dry weight) sucrose. It will be imported in 55-gallon drums, 350-gallon totes, or 3000-gallon tank trucks, and used as an ingredient in the preparation of cordial liqueurs. Users of the liqueur base will add additional flavors, colors, sweeteners, whiskey, rum or other spirits, and water to make the finished beverage.

The water, sucrose, alcohol, and butterfat ingredients will be products of Canada. The natural and artificial flavors, sodium citrate, and artificial colors may be products of the United States or Canada. The monoglycerides, dipotassium phosphate dibasic, and sodium hexameta phosphate will be products of the United States, Canada, or a non-NAFTA country. The sodium stearoyl lactylate will be a product of the United States or a non-NAFTA country, and the sodium caseinate will, in all cases, be a product of a non-NAFTA country.

The applicable subheading for the Cordial Liqueur Alcohol Base, if imported in quantities that fall within the limits described in additional U.S. note 10 to chapter 4, will be 2106.90.6400, Harmonized Tariff Schedule of the United States (HTS), which provides for food preparations not elsewhere specified or includedotherothercontaining over 10 percent by weight of milk solidsother, dairy products described in additional U.S. note 1 to chapter 4described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions. The rate of duty will be 10 percent ad valorem. If the quantitative limits of additional U.S. note 10 to chapter 4 have been reached, the product will be classified in subheading 2106.90.6600, HTS, and dutiable at the rate of 70.4 cents per kilogram plus 8.5 percent ad valorem.

Each of the non-originating materials used to make the liqueur base has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/21.12. the Cordial Liqueur Alcohol Base, when classified in subheading 2106.90.6400, HTS, will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

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 to 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.

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 Cordial Liqueur Alcohol Base is a good of a Canada for marking purposes.

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 Stanley Hopard at 646-733-3029.

Sincerely,

Robert B. Swierupski
Director,

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