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NY R00122




March 1, 2004

CLA-2-18:RR:NC:SP:232 R00122

CATEGORY: CLASSIFICATION

TARIFF NO.: 1806.20.2800

Mr. Graeme 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 chocolate crumb from Mexico; Article 509

Dear Mr. Honeyfield:

In your letter dated February 10, 2004 you requested a ruling on the status of chocolate crumb from Mexico under the NAFTA.

The subject merchandise is stated to contain 55 to 60 percent sugar, 30 to 32 percent whole milk powder and 9 to 13 percent chocolate liquor. The product will have a butterfat content of 7 to 10 percent. The sugar will be grown and refined in the United States, Canada or Mexico. The origin of the whole milk powder will be from New Zealand, Australia, Argentina or the EU. The chocolate liquor will be from a non-NAFTA country. The ingredients will be blended into the chocolate crumb in Mexico. The product will be imported into the United States in 20-25 kilogram plastic lined multi-wall bags, 500-1000 kilogram totes or in bulk transportation

The applicable subheading for the chocolate crumb will be 1806.20.2800, HTS, which provides for Chocolate and other food preparations containing cocoa: Other preparations in blocks or slabs weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar...other ... containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection)...other, containing over 5.5 percent by weight butterfat: otherother. The general rate of duty will be 52.8 cents per kilogram plus 4.3 percent ad valorem.

Each of the non-originating materials used to make the chocolate crumb has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/18. The product will be entitled to a free rate of duty 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 chocolate crumb 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 product 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 the country of origin for marking purposes of the chocolate crumb is Mexico, noting Section 102.20 (d).

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 646-733-3031.

Sincerely,

Robert B. Swierupski
Director,

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