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NY R01981





June 14, 2005

CLA-2-20: RR: NC: 2:231 R01981

CATEGORY: CLASSIFICATION

TARIFF NO.: 2008.11.4500; 2008.11.6000; 2008.19.4000

Mr. Ole Skaaning
Ken Hamanaka Co. Inc.
5777 West Century Blvd. (Suite760)
Los Angeles, CA 90045

RE: The tariff classification of prepared nut products from Thailand.

Dear Mr. Skaaning:

In your letter dated May 12, 2005, on behalf of your client Heritage Snacks & Beverages Co. Ltd., you requested a tariff classification ruling.

The merchandise is described, as follows:

“Sesame coated Almonds” are shelled & raw almonds that are exported from the United States in bulk 50-pound cartons. In Thailand the almonds will be roasted and coated with a sesame-honey coating. The finished almonds will then be packaged in 16oz. heat sealed clear cellophane bags.

“Peanuts with Thai Herb Ingredients” consists of 95 percent peanuts (U.S. origin), spices, chili and lime leaves. This product may be prepared in either of two ways. First, the U.S. peanuts would be imported into Thailand already shelled, roasted and salted, so that only the mixing of the peanuts with chili powder and other spices and the lime leaves would occur in Thailand. Alternatively, the peanuts would be imported raw and shelled from the U.S. In Thailand, they would be roasted, mixed with spices and packaged in 16 oz. heat-sealed clear cellophane bags. We would note that the processing in Thailand, under either scenario, would constitute an advance in value or improvement in condition of the U.S. peanuts.

“Mixed nuts and seeds” consist of 40 percent blanched & slivered almonds (U.S. origin), and equal amounts of pumpkin seeds and pine nuts. In Thailand the almonds will be roasted, mixed with the other ingredients and packaged in 16 oz. heat-sealed clear cellophane bags. The three components in this mixture are each classifiable in different chapters,--i.e., the almonds are classifiable in heading 20.08, HTS, the pumpkin seeds in heading 12.09, HTS, and the pine nuts in heading 08.02, HTS. Classification will be according to General Rule of Interpretation 3, under the provision for almonds, which nut predominates by weight over the other components and imparts the essential character to the mixture.

Each of the above products contains nuts (either almonds or peanuts) of U.S. origin. In each case, however, the U.S. products have been roasted or roasted and otherwise processed in Thailand, prior to packaging. This processing constitutes an advance in value or improvement in condition, which would preclude any preferential duty benefit under subheading 9801.00.10, HTSUS, the provision for “Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.

Alternatively, it would appear that these goods would not qualify for preferential duty treatment in subheading 9802.00.50, HTSUS, which provides for Articles returned to the United States after having been exported to be advanced in value or improved in condition by any process of manufacture or other means, other.

First, we would note that Customs and Border Protection (CBP) has previously ruled in cases with similar circumstances. For instance, in a letter dated April 3, 1989, (File Number 554934, Headquarters ruled that certain peanuts of U.S. origin that were exported to Mexico and there shelled, roasted and salted, did not qualify for treatment under subheading 9802.00.50, HTSUS. The rationale for excluding the goods in question was explained, as follows:

“Subheading 9802.00.50, HTSUS, provides for the assessment of duty on the value of repairs or alterations performed on articles returned to the U.S. after having been exported for that purpose. However, the application of this tariff provision is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. See A.F.Burstrom v. Untied States, 44 CCPA 27, C.A.D. 631 (1957); Guardian Industries Corporation v. United States, 3 CIT 9 (1982). Treatment under subheading 9802.00.50, HTSUS, is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. Doliff and Company, Inc. v. Untied States, 66 CCPA 77, C.A.D. 1225, 599 F. 2d 1015 (1979).”

The ruling further concluded that, “[i]n the present case, the U.S. grown peanuts that are shipped to Mexico are commercially different from the peanut product that returns. Additionally, the shelling, roasting, salting or otherwise flavoring constitutes an intermediate step in the preparation of finished peanut products.” We would note, also, a ruling letter of January 20, 1995, (File Number 558797), in which Headquarters ruled that certain U.S. peanuts reprocessed in Holland, where they were sugar-coated, salted, packaged for retail sale and then shipped to the United States. The processes performed abroad were found to constitute “intermediate steps in the preparation of the finished peanuts” which therefore precluded preferential treatment under subheading 9802.00.50, HTSUS.

The applicable subheading for “Sesame Coated Almonds” will be 2008.19.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for fruit, nuts and other edible parts of plants, otherwise prepared or preserved...nuts, peanuts (groundnuts) and other seeds...other, including mixtures...almonds. The rate of duty will be 32.6 cents per kilogram.

The applicable subheading for “Peanuts with Thai Herb Ingredients” will be 2008.11.4500, HTSUS, as other peanuts, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included if, it is within the quantitative limitations of Additional U.S. Note 2 to Chapter 12, and entered pursuant to its provisions. If the quantitative limitations have been reached, the product is classified in subheading 2008.11.6000, HTSUS, an over the tariff rate quota provision. In addition, products classified in subheading 2008.11.6000, HTS, will be subject to additional safeguard duties based on their value, as described in subheadings 9904.12.019904.12.19.

The applicable subheading for “Mixed Nuts and Seeds” will be 2008.19.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for fruit, nuts and other edible parts of plants, otherwise prepared or preserved...nuts, peanuts (groundnuts) and other seeds...other, including mixtures...almonds. The rate of duty will be 32.6 cents per kilogram.

This merchandise is subject to The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling FDA at telephone number (301) 575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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 Thomas Brady at 646-733-3030.

Sincerely,

Robert B. Swierupski
Director,

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