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NY R02589




September 23, 2005

CLA-2-20:RR:NC:2:231 R02589

CATEGORY: CLASSIFICATION

TARIFF NO.: 2008.19.8500

Ms. Sheri G. Lawson
Willson International, Inc.
250 Cooper Avenue, Suite 102
Tonowanda, NY 14150

RE: The tariff classification, country of origin marking and status under the North American Free Trade Agreement (NAFTA), of Mixed Roasted and Salted Nuts from Canada; Article 509

Dear Ms. Lawson:

In your letter dated September 19, 2005, you requested a ruling on the status of mixed roasted and salted nuts from Canada under the NAFTA on behalf of your client, John Vince Foods of Ontario, Canada.

The product in question, called “Classic Mix,” is said to consist of 50 percent by weight of roasted and salted cashews and 50 percent of roasted and salted peanuts. The cashews are imported into Canada as raw, shelled nuts, and are the product of Brazil, Indonesia or other offshore countries. The peanuts are of U.S. origin, and are imported into Canada either blanched and shelled under tariff heading 2008.11, HTS, or as raw, in-shell peanuts (heading 1202.10).

You state that, in Canada, the cashews and peanuts are oil roasted and salted individually. The roasted nuts are then layered onto a mixing table and, as the mixing table is emptied, the product is mixed as it drops into a tote. The mixed product is then packaged into see-through plastic containers of 500 grams (17.64 ounces), net, which are then packed for export into the United States.

The applicable tariff provision for this “Classic Mix” of cashews and peanuts will be 2008.19.8500, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: nuts, peanuts (ground-nuts) and other seeds, whether or not mixed together: Other, including mixtures: mixtures. The general rate of duty will be 22.4 percent ad valorem.

General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) of this note or the rules set forth therein, or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or

Based on the facts provided, the goods described above qualify as originating goods, because they will meet the requirements of HTSUSA General Note 12(b)(iii). General Note 12(a)(i), HTSUS, requires, however, that, in order to be eligible for NAFTA preferential treatment, such goods must also qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury.

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.

You state that the imported mixture of roasted cashews and roasted peanuts are processed in Canada prior to being imported into the U.S. Since Canada 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 mixture 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 of this case, we find two results. When the “Classic Mix” is processed from raw, shelled cashews of foreign origin and raw, in-shell peanuts of U.S. origin, that product is a good of Canada for marking purposes. When the “Classic Mix” is processed from raw, shelled cashews of foreign origin and blanched and shelled peanuts of U.S. origin, that product is a good of the United States for marking purposes.

Accordingly, under the first set of facts, the “Classic Mix” will be subject to the marking regulations in 19 U.S.C. § 1304, and must be marked as a “Product of Canada.” Under the second set of facts, as U.S. goods, the “Classic Mix” is not subject to the marking regulations in 19 U.S.C. § 1304, since it would not be considered a foreign good. The Federal Trade Commission (rather than the Bureau of Customs and Border Protection) regulates the marking of American goods.

For duty purposes, Part 102.19(b) of the regulations provides that, when goods, whose country of origin is determined to be the United States, are returned, after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States. Accordingly, under either set of facts, the “Classic Mix” of roasted and salted cashews and peanuts will be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

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 Thomas P. Brady at 646-733-3030.

Sincerely,

Robert B. Swierupski
Director,

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