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NY M87335




October 31, 2006

CLA-2-17:RR:NC:SP:232 M87335

CATEGORY: CLASSIFICATION

TARIFF NO.: 1702.90.1000; 1702.90.2000

Mr. Dan Ritchie
Tim Hortons
The TDL Group Corp.
874 Sinclair Road
Oakville, Ontario L6K 2Y1

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Liquid Sugar from Canada; Article 509

Dear Mr. Ritchie:

In your letter dated September 27, 2006 you requested a ruling on the status of Liquid Sugar from Canada under the NAFTA.

Information and a sample were submitted with your initial request dated August 15, 2006. The subject merchandise is stated to contain sugar from Canadian origin beets, water from Canada, and small quantities of potassium sorbate from China and citric acid from the United States. You describe the merchandise as “water white liquid sucrose syrup with sweet and sugary flavor/odor.” You advise that the product contains 0.178 percent soluble non-sugar solids in the total soluble solids, excluding any substances added or developed in the product. The item will be imported in various bulk containers, for example, 1liter bottles and 10 liter bags. It will be used, in its imported condition, by restaurants as a sweetener in hot or cold beverages.

The applicable subheading for the Liquid Sugar, if described in additional U.S. note 5 to chapter 17 and entered pursuant to its provisions, will be 1702.90.1000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar syrups not containing added flavoring or coloring matter; artificial honey, whether or not mixed with natural honey; caramel: Other, including invert sugar and other sugar and sugar syrup blends containing in the dry state 50 percent by weight of fructose: Derived from sugar cane or sugar beets: Containing soluble non-sugar solids (excluding any foreign substances, including but not limited to molasses, that may have been added or developed in the product) equal to 6 percent or less by weight of the total soluble solids. The general rate of duty will be on the total sugars at the rate of 3.6606 cents per kilogram. If not described in additional U.S. note 5 to chapter 17 and not entered pursuant to its provisions, the applicable subheading will be 1702.90.2000, HTSUS. The rate of duty will be 35.74 cents per kilogram.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

The Liquid Sugar is not provided for in chapter 21 of the Harmonized Tariff Schedule of the United States, because the citric acid is not a flavor for classification purposes.

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) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

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

(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--

(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or

(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.

Based on the facts provided, the good described above qualifies for NAFTA preferential treatment, because it will meet the requirements of HTSUS General Note 12(b)(ii)(A). When classified under subheading 1702.90.1000, HTSUS, the good will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

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 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 John Maria at 646-733-3031.

Sincerely,

Robert B. Swierupski
Director,

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