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NY N026839




May 8, 2008

CLA-2-04:OT:RR:E:NC:SP:231

CATEGORY: CLASSIFICATION

TARIFF NO.: 0404.10.1100; 0404.10.1500

Mr. William K. Vanderkooi
Diverse By-Products Ltd.
PO Box 4110
Sumas Way PO
Abbotsford
B.C., Canada V2S 8R1

RE: The tariff classification, marking and status under the North American Free Trade Agreement (NAFTA), of a fluid “whey blend” from Canada; Article 509

Dear Mr. Vanderkooi:

In your letter dated April 23, 2008, you requested a ruling on the status of a certain fluid “whey blend” from Canada under the NAFTA.

The product in question is described as a pale, yellow/green/clear liquid comprised of a mixture of whey (80%) and whey permeate (20%). (The whey permeate, also known as whey lactose concentrate, or lactose permeate, is the substance remaining after the protein has been removed from whey.) The blend is said to contain 9.4% solids and to have the viscosity of light syrup. On a dry basis, the blend contains 70% lactose, 11% protein and 0.2% fat.

You have advised that all source materials and ingredients used in the production of the “whey blend” are wholly of Canadian origin, and that all processing and mixing take place in Canada.

The “whey blend” is intended to be used as an animal feed supplement for dairy cattle. It will be imported in bulk form in tanker trucks, and subsequently stored in on-farm tanks.

You have suggested that the above-described product might be classifiable in subheading 0404.10.20, Harmonized Tariff Schedule of the United States (HTSUS), which provides for certain whey products other than “modified whey.” However, since we find that the product meets the definition of “modified whey,” as set forth in Subheading Note 1 of Chapter 4, HTSUS, it is more specifically provided for as such.

Accordingly, the applicable tariff provision for the above-described “whey blend,” if entered under quota, will be 0404.10.1100, HTSUS, which provides for whey and modified whey, whether or not concentrated or containing added sugar or other sweetening matter: modified whey: other than whey protein concentrates: described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions. The general rate of duty will be 13% ad valorem.

The applicable tariff provision for the above-described “whey blend,” if entered outside the quota, will be 0404.10.1500, HTSUS, which provides for whey and modified whey, whether or not concentrated or containing added sugar or other sweetening matter: modified whey: other than whey protein concentrates: other. The general rate of duty will be $1.035 per kilogram plus 8.5% ad valorem.

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/.

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 goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(i). When properly entered under subheading 0404.10.1100, HTSUS, the goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. However, because subheading 0404.10.1500, HTSUS, does not carry a special NAFTA duty rate for Canada, the “general” rate will apply when the goods are entered under that number.

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304) provides that, unless excepted, every article of foreign origin 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 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.

Articles that are incapable of being marked are excepted from marking pursuant to 19 U.S.C. 1304(a)(3)(A) and 19 CFR 134.32(a). The outermost containers or holders in which such articles ordinarily reach the ultimate purchaser shall be marked to indicate the country of origin of their contents. See 19 U.S.C. 1304(b) and 19CFR 134.22(a). As provided in 19 CFR 134.25, if an imported article which is incapable of being marked is intended to be repacked in a new container for sale to an ultimate purchaser after its release from Customs custody, or if the port director having custody of the article has reason to believe such article will be repacked after its release, the importer shall certify to the port director that the new container will be marked to indicate the country of origin of the article.

In this case, the imported liquid whey blend is incapable of being marked and is excepted from marking under 19 U.S.C. 1304(a)(3)(A) and 19 CFR 134.32(a). Also, since Customs and Border Protection has previously taken the position that tanks, tank cars and tank trucks are not “containers” for purposes of the marking provisions, the tank trucks carrying the imported whey blend do not have to be marked to indicate the origin of their contents. Furthermore, we find that the certification requirements of 19 CFR 134.25 do not apply if the imported product is to be “repacked” only into tanks, as you indicate. (See Headquarters Ruling Letters 735224, dated Dec. 29, 1993, and 732621, dated Feb. 5, 1990.)

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 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.

This merchandise may also be subject to regulations or restrictions administered by the U.S. Department of Agriculture, Animal and Plant Health Division (APHIS). You may contact this agency regarding possible applicable regulations at the following location:

U.S. Department of Agriculture
APHIS, VS
4700 River Road, Unit 40
Riverdale, MD 20737
Telephone number: (301) 734-3277

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 Nathan Rosenstein at 646-733-3030.

Sincerely,

Robert B. Swierupski
Director,

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