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NY K81757




January 22, 2004

CLA-2-19:RR:NC:2:228 K81757

CATEGORY: CLASSIFICATION

TARIFF NO.: 1901.90.4200; 1901.90.4300

Mr. Graeme Honeyfield
Glinso Foods
3554 Round Barn Road Suite 310
Santa Rosa, CA 95403

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

Dear Mr. Honeyfield:

In your letters dated December 1, 2003 and January 8, 2004 you requested a ruling on the status of food ingredients from Mexico under the NAFTA.

Two products are described in your letters. A sample of one item, submitted with your first letter, was examined and disposed of. The sample of Chocoprep 6929 is a tan-colored powder containing scattered, small, brown-colored particles. Chocoprep 6929 is said to be composed of 69 percent sugar, 29 percent whole milk powder, and 2 percent chocolate liquor. The second product, Chocoprep 6728, is said to consist of 67 percent sugar, 28 percent whole milk powder, and 5 percent chocolate liquor. Both items will be packed in 10-25 kilogram plastic-lined bags, 500-1000 kilogram totes, or in bulk containers. After importation, the products will be sold to confectionery manufacturers for use as an ingredient in the manufacture of chocolate products.

The sugar will be a product of the United States or Mexico. The whole milk powder and the chocolate liquor will be products of a non-NAFTA country. In Mexico, the ingredients will be blended according to the prescribed formula and packed as noted above.

The applicable subheading for Chocoprep 6929 and Chocoprep 6728, if imported in quantities that fall within the limits described in additional U.S. note 10 to chapter 4, will be 1901.90.4200, Harmonized Tariff Schedule of the United States (HTS), which provides for food preparations of goods of headings 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included otherdairy products described in additional U.S. note 1 to chapter 4dairy preparations containing over 10 percent by weight of milk solidsdescribed in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions. The rate of duty will be 16 percent ad valorem. If the quantitative limits of additional U.S. note 10 to chapter 4 have been reached, the products will be classified in subheading 1901.90.4300, HTS, and dutiable at the rate of $1.035 per kilogram plus 13.6 percent ad valorem.

The merchandise does not qualify for preferential treatment under the NAFTA because one of the non-originating materials, the whole milk powder, used in the production of the goods will not undergo the change in tariff classification required by General Note 12(t)/19.5, HTSUSA.

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 Chocoprep 6929 and Chocoprep 6728 are goods of Mexico for marking purposes.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 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 Stanley Hopard at 646-733-3029.

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, Bureau of Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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