United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2003 HQ Rulings > HQ 562537 - HQ 562708 > HQ 562585

Previous Ruling Next Ruling
HQ 562585




February 4, 2003

CLA-02 RR:CR:SM 562585 EAC

CATEGORY: CLASSIFICATION

Rebecca Macdonald
Project Manager
Gourmet du Village
539 du Village, Morin Heights
Quebec, Canada J0R 1H0

RE: Country of origin marking for drink mixes and rim trim; NAFTA; essential character; 19 CFR Part 102; 19 CFR Part 134; HTSUS; Heading 1701; Heading 1806; Heading 2106; Heading 2501; powdered drink mix; rim trim

Dear Ms. Macdonald:

This is in response to your letter, received by our office on November 19, 2002, requesting a ruling on behalf of Gourmet du Village. Specifically, you request a ruling pertaining to the country of origin marking requirements and tariff classifications for various products which your company intends to produce and import into the United States.

FACTS:

There are six products for which you request this ruling: (1) Margarita Mix Drink, (2) Sangria Mix, (3) Key Lime Smoothie, (4) Tropical Fruit Rim Trim, (5) Cocoa & Spice Rim Trim, and (6) Margarita Salt Rim Trim. In order to assist our office, you have submitted sample illustrations that depict the actual labels that will decorate the containers of the items mentioned above. Along with a visual depiction of the products, each sample label contains fundamental information pertaining to the product such as the name of the item, producer, weight, directions for use, ingredients, and country of origin. However, your company has provided our office with specific composition information for only one product. Therefore, the following ruling will be issued based upon the limited information before us.

With the exception of the Margarita Rim Trim Salt, sugar is utilized in each of the products mentioned above. The sugar that is utilized in each of the products is grown and harvested in Australia. After harvest, the “raw” sugar is subsequently imported into Canada where it is refined and prepared for use in the products at issue. Therefore, in the product descriptions which follow, we will assume that all constituent sugar originates in Australia and is refined in Canada.

Descriptions of the products at issue follow:

(1) Margarita Drink Mix: You state that this mix is basically a “dry sugar drink mix” which only requires mixture with water in order to render a drinkable product. The Margarita Drink Mix is comprised of sugar, citric acid, corn syrup solids, natural and artificial flavor, dehydrated lime juice, tricalcium phosphate, quillaia extract, gum Arabic, artificial colors (Yellow #5 and #6, Blue #1), and titanium dioxide. With the exception of the non-originating sugar, you state that the assorted ingredients are all products of Canada. In order to create the final product, you state that the various ingredients are merely combined and blended into a powdered mix. The sample label for this product, as well as the other products at issue, contains the following marking: “Product of/ Produit Du Canada.”

Sangria Mix: Similar to the Margarita Drink Mix, you state that the Sangria Mix is basically a dry sugar drink mix that only requires mixture with water in order to render a drinkable product. The Sangria Mix is comprised of sugar, citric acid, natural and artificial flavors, tricalcium phosphate, sodium citrate, artificial colors (Red #40 and Blue #1). With the exception of the non-originating sugar, the constituent ingredients utilized in this product are all products of Canada. In order to create the Sangria Mix, the various ingredients are combined and blended into a powdered mix.

Key Lime Smoothie: This product is a powdered drink mix that requires blending with water and ice in order to render a “slushie” like product. The Key Lime Smoothie mix is comprised of sugar, modified corn starch, partially hydrogenated soybean oil, modified milk ingredients, glucose syrup, sodium caseinate, citric acid, natural and artificial flavors, salt, gum Arabic, tricalcium phosphate, dipotassium phosphate, mono and doglycerides, and artificial colors (tartrazine, Yellow #6 and Blue #1). Similar to the products described above, the various ingredients are all products of Canada (excluding sugar), and combining and blending the ingredients into a powdered mix results in the final product.

(4) Tropical Fruit Rim Trim: You describe this product as flavored sugar intended for “rimming” a cocktail glass. Rimming entails dipping the rim of the glass into the powdered substance and carefully rotating the glass until both sides are coated evenly with the powder. Though in most cases not a beverage mix itself, rim trim accentuates the flavor of various beverages by providing an additional “sugary” or “salty” taste each time the consumer drinks from a rimmed cocktail glass or mug. The Tropical Fruit Rim Trim is comprised of sugar, artificial colors (Red #3 and #40, Yellow #5 and #6), triglycerides, and natural and artificial flavors. Similar to the products described above, the various ingredients are all products of Canada (excluding sugar) and combining and blending the ingredients into a powdered mix results in the final product.

Cocoa and Spice Rim Trim: You state that this product can be prepared as a drink, a garnish for specialty coffees, or as rim trim. The Cocoa and Spice Rim Trim is comprised of sugar, cocoa powder, cinnamon and vanilla sugar. Similar to the products described above, the various ingredients are all products of Canada (excluding sugar) and the final product is created by combining and blending these ingredients into a powdered mix. Your office has provided specific composition information pertaining to this product which will remain confidential in compliance with your request.

Margarita Salt Rim Trim: This product is intended to serve as rim trim for cocktail glasses. The Margarita Sea Salt Rim Trim is comprised of sea salt and lemon and/or lime juice powder. You state that the sea salt is a product of the United States and the lemon and/ or limejuice powder is a product of Canada. The constituent ingredients are combined and blended together in order to produce the final product.

ISSUES:

What are the proper tariff classifications of the products described above and may the products be properly classified as products of Canada for country of origin marking purposes?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930 (19 U.S.C. §1304), requires that, unless excepted, every article of foreign origin (or its container) imported into the United States shall be marked in a conspicuous place as legibly and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. The purpose of the marking statute is outlined in United States v. Friedlander & Co., 27 CCPA 297 at 302 C.A.D. 104 (1940), where the court stated that: “Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” Part 134, Customs Regulations (19 C.F.R. 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 Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The marking rules utilized for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The applicable marking requirements of these goods are set forth in Part 134, Customs Regulations.

Section 134.1(b), Customs Regulations, defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States. 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.

Section 134.1(j), Customs 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. 19 CFR 134.1(g) 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. 19 CFR 134.45(a)(2) 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 all of the products described above are processed in Canada. Canada is defined as a NAFTA country under 19 CFR 134.1(g). Therefore, we must apply the NAFTA Marking Rules in order to determine whether the imported items are “goods of a NAFTA country.” Part 102 of the Customs Regulations sets forth the “NAFTA Marking Rules” for purposes of determining whether a good is a good of a NAFTA country for marking purposes. 19 CFR 102.11 sets forth the required hierarchy for determining the country of origin for marking purposes. Applied in sequential order, the required hierarchy establishes that the country of origin of a good will be the country where:

The good is wholly obtained or produced;
The good is produced exclusively from domestic materials; or Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in §102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.

Based upon the facts of this case, we will first consider the application of these rules to the (1) Margarita Drink Mix, (2) Sangria Mix, (3) Key Lime Smoothie, and (4) Tropical Fruit Rim Trim. The sugar utilized in these four products is imported from a non-NAFTA country (Australia) and refined in Canada. Therefore, the finished products are neither wholly obtained or produced in a single NAFTA country as set forth in section 102.11(a)(1), nor are the finished products produced exclusively from domestic (Canadian in this case) materials as set forth in section 102.11(a)(2). Since an analysis of sections 102.11(a)(1) and 102.11(a)(2) has not yielded a country of origin determination, we must therefore utilize section 102.11(a)(3) in order to determine whether the Australian sugar has undergone the requisite change in tariff classification, or “tariff shift.”

You state that the applicable subheading for the Margarita Mix and Sangria mix is 1701.91.54, Harmonized Tariff Schedule of the United States (HTSUS), which provides for:

Cane or beet sugar and chemically pure sucrose, in solid form (con.): Other (con.):
1701.91 Containing added flavoring or coloring matter (con.): Containing added flavoring matter whether or not containing added coloring: Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17:

1701.91.54 Described in additional U.S. note 8 to this chapter and entered pursuant to its provisions

For purposes of this ruling we will assume that this determination is correct. Furthermore, based upon the limited composition information provided and assuming compliance with the cited provision (i.e., greater than 65 percent dry weight of sugar), we will assume that this classification applies to the sugar- based Key Lime Smoothie and Tropical Fruit Rim Trim as well.

The non-originating sugar utilized in these products is properly classified in subheading 1701.11, HTSUS, which provides for: “Cane or beet sugar and chemically pure sucrose, in solid form: Raw sugar not containing added flavoring or coloring matter: Cane sugar.” You state that the other constituent ingredients utilized in the mixes are originating items (products of Canada). Therefore the only ingredient that is required to undergo a tariff shift is the non-originating sugar.

Accordingly, the applicable tariff shift rule located in 19 CFR 102.20 provides for a change to heading 1701 from any other chapter. Therefore, the non-originating sugar does not meet the requirements of the applicable tariff shift rule because the sugar is in the same chapter as the four products under consideration. Therefore, section 102.11(a)(3) does not yield a country of origin determination.

Since the country of origin cannot be determined under 19 CFR 102.11(a), our analysis proceeds to section 19 CFR 102.11(b), which provides, in pertinent part, as follows:

(b) Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good

This rule requires a determination as to the single material that imparts the essential character to each of the goods.

“Material” is defined in 19 CFR 102.1(1) as “a good that is incorporated into another good as a result of production with respect to that other good, and includes parts, ingredients, subassemblies, and components.” When determining the essential character of a good under 19 CFR 102.11, we note that 19 CFR 102.18(b)(1), provides that only domestic and foreign materials that are classified in a tariff provision from which a change is not allowed under the section 102.20 specific rules or other requirements applicable to the good shall be taken into consideration. According to section 102.18(b)(1)(iii), if there is only one material that fails to meet the requisite tariff shift rule, then that material will represent the single material that imparts the essential character to the good.

Applied to the products presently under consideration, the non-originating sugar is the only material which will not undergo the requisite tariff shift as a result of the processing in Canada. Therefore, the Australian-origin sugar is the single material that imparts the “essential character” to the good. In light of these considerations, the country of origin of the Margarita Mix Drink, Sangria Mix, Key Lime Smoothie and Tropical Fruit Rim Trim is Australia.

You have requested approval for either of the following two country of origin markings for the four products:

Product of/ Produit du Canada
Produced in Canada with Sugar from Australia

The first proposed marking is unacceptable, as the country of origin of the products is not Canada. The second proposed marking also is not acceptable because the use of the term “produced” in reference to Canada, which is not the country of origin, is confusing and misleading.

However, acceptable markings for the products would include “Product of Australia/ Blended in Canada” or “Product of Australia.”

The fifth item under consideration is the Cocoa and Spice Rim Trim. The Cocoa and Spice Rim Trim is classified in subheading 1806.90, HTSUS, which provides for:

Chocolate and other food preparations containing cocoa: 1806.90 Other:

Accordingly, the applicable tariff shift rule set forth in 19 CFR 102.20 provides for a tariff shift to subheading 1806.90, HTSUS, from any other subheading. Therefore, the non-originating sugar (subheading 1701.11, HTSUS) satisfies the requirements of the applicable tariff shift rule, and the Cocoa and Spice Rim Trim may be considered to be a product of Canada for country of origin purposes.

You have requested approval for the following marking for indication of the Cocoa and Spice Rim Trim: “Product of/ Produit du Canada.” Based upon the facts and circumstances pertaining to this product, this marking is acceptable.

The final item under consideration is the Margarita Salt Rim Trim. Similar to the products above, in order to determine the country of origin of the product we must utilize the NAFTA Marking Rules. Additionally, the analysis for this product is based upon the limited information provided by your office which did not include specific composition information of the product.

Since the subject product is neither wholly obtained or produced in Canada, nor produced exclusively from domestic (Canadian) materials, origin cannot be determined under sections 102.11(a)(1) and 102.11(a)(2). Accordingly, in order to determine if there has been a tariff shift of the foreign materials, our analysis must proceed to section 102.11(a)(3).

Based upon the information provided, it appears that the Margarita Salt Rim Trim is properly classified in subheading 2106.90, HTSUS, which provides for:

Food preparations not elsewhere specified or included (con): 2106.90 Other (con.):
Other (con.):
Other (con.):
Other (con.):
Other:

In this case, the only “foreign” material that must undergo the requisite tariff shift is the sea salt which is properly classified in subheading 2501.00, HTSUS, which provides for: “Salt (including table salt and denatured salt) and pure sodium chloride, whether or not in aqueous solution or containing added anticaking or free-flowing agents; sea water.” The applicable tariff shift rule located in 19 CFR 102.20 permits a change to subheading 2106.90 from heading 2501. Therefore, the sea salt meets the requirements of the applicable tariff shift rule, and the Margarita Salt Rim Trim may be considered to be a product of Canada for country of origin purposes. Accordingly, in regard to the specific facts and circumstances of this case, the Margarita Salt Rim Trim may be marked with the “Product of/ Produit du Canada” indication.

HOLDING:

Based upon the information provided and the specific circumstances of this case, the Cocoa and Spice Rim Trim and the Margarita Salt Rim Trim are determined to be products of Canada for purposes of marking pursuant to Part 102, Customs Regulations. Accordingly, the products may be marked with the “Product of/ Produit du Canada” indication. Such approval is limited to the specific goods and circumstances discussed in this ruling.

However, pursuant to Part 102, Customs Regulations, the non-originating sugar utilized in the Margarita Mix Drink, Sangria Mix, Key Lime Smoothie and Tropical Fruit Rim Trim does not undergo the requisite tariff shift which is required in order to be considered a product of Canada. Therefore, based upon the “essential character” analysis in 19 CFR 102.11(b)(1), the products are determined to be goods of Australia and must be marked accordingly.

With the exception of the Cocoa and Spice Rim Trim, we are unable to definitively classify the products described above under the HTSUS due to the incomplete product composition information submitted. We recommend that you contact the following Customs office with complete composition information in order to obtain a definitive classification determination:

National Commodity Specialist Division
Attn: Special Products Branch
U.S. Customs Service
One Penn Plaza, 10th Floor
New York, NY 10119

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Myles B. Harmon

Previous Ruling Next Ruling

See also: