N323065

N323065 December 16, 2021 CLA-2-17:OT:RR:NC:N2:232 CATEGORY: Classification; Country of Origin, Trade Programs TARIFF NO.: 1701.91.4800; 9823.10.02 Mr. Brett Harris Roll & Harris LLP 2001 L Street NW Washington, DC 20036 RE: The Classification, Marking, and Eligibility of the United States-Mexico Canada Trade Agreement (USMCA) for Sugar and Vanillin Blends Dear Mr. Harris, This is in response to your letter dated December 3, 2021 on behalf of your client, The Hershey Company, requesting a ruling on classification, country of origin marking and the eligibility of the USMCA on Sugar and Vanillin Blends. The subject merchandise is described as Sugar and Vanillin Blends, a mixture of sugar and artificial vanillin powder. Product 1 consists of 99.98 percent sugar and 0.02 percent vanillin powder. Product 2 consists of 99.5 percent sugar and 0.5 percent vanillin powder. Product 3 consists of 99 percent sugar and 1 percent vanillin powder. You state that the raw cane sugar (Products of Brazil, Guatemala and other Central American countries) is refined, blended with the vanillin powder (Product of the United States, France and China) and packed in Canada. The finished products will be shipped to the United States in 2,200 pound supersacks. The Sugar and Vanillin Blends will be further mixed with other ingredients upon importation for the manufacturing of confectionery products. Classification: The applicable subheading for all Sugar and Vanillin Blends will be 1701.91.4800. Harmonized Tariff Schedule of the United States (HTSUS), which provides for cane or beet sugar and chemically pure sucrose, in solid form...containing added flavoring matter whether or not containing added coloring... articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17...other. The general rate of duty will be 33.9 cents per kilogram plus 5.1 percent ad valorem. Country of Origin Marking The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. Applied in sequential order, the required hierarchy establishes that: The country of origin of a good is the country in which: (a)(1) The good is wholly obtained or produced; (a)(2) The good is produced exclusively from domestic materials; or (a)(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied. Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because all five sugar and vanillin blended products are neither wholly obtained nor produced exclusively from “domestic” (Canada, in this case) materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). The applicable tariff shift requirement in section 102.20 for the Sugar and Vanillin Blends Products of subheading 1701.91, HTSUS, consist of the following: A change to heading 1701 through 1702 from any other chapter. Because the foreign material (sugar) contained in all Sugar and Vanillin Blends is classified in subheadings 1701.13, the tariff shift rule in 19 C.F.R. § 102.20(a)(3) is not met. Since an analysis of section 102.11(a) has not produced a country of origin determination, we turn to section 102.11(b) of the regulations. Section 102.11(b)(1) provides as follows: (b) Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section: (1) The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good, or . . . When determining the essential character of a good under 19 C.F.R. § 102.11, 19 C.F.R. § 102.18(b)(1) provides that only domestic and foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the § 102.20 specific rule or other requirements applicable to the good shall be taken into consideration. Here, the only material that does not undergo the applicable tariff shift in 19 C.F.R. § 102.20(d) is the raw sugar from Brazil, Guatemala and the Central American countries, and consistent with Sections 102.11(b) and 102.18(b)(1), it is the material that imparts the “essential character” unto the Sugar and Vanillin Blended Products. Accordingly, for marking purposes the country of origin of the Sugar and Vanillin Blends are Brazil, Guatemala and the Central American countries of the raw cane sugar used in the Sugar and Vanillin Blends. USMCA: The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11, HTSUS, implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states, in relevant part: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if— the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or … Since all Sugar and Vanillin Blends contain non-originating material, they are not considered goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and (ii). We must next determine whether the Sugar and Vanillin Blends under GN 11(b)(iii). All Sugar and Vanillin Blends are classified in subheading 1701.91, HTSUS. The applicable rule of origin for merchandise under subhea

of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). The applicable tariff shift requirement in section 102.20 for the Sugar and Vanillin Blends Products of subheading 1701.91, HTSUS, consist of the following:   A change to heading 1701 through 1702 from any other chapter.    Because the foreign material (sugar) contained in all Sugar and Vanillin Blends is classified in subheadings 1701.13, the tariff shift rule in 19 C.F.R. § 102.20(a)(3) is not met. Since an analysis of section 102.11(a) has not produced a country of origin determination, we turn to section 102.11(b) of the regulations. Section 102.11(b)(1) provides as follows:(b) Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:(1) The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good, or . . .When determining the essential character of a good under 19 C.F.R. § 102.11, 19 C.F.R. § 102.18(b)(1) provides that only domestic and foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the § 102.20 specific rule or other requirements applicable to the good shall be taken into consideration. Here, the only material that does not undergo the applicable tariff shift in 19 C.F.R. § 102.20(d) is the raw sugar from Brazil, Guatemala and the Central American countries, and consistent with Sections 102.11(b) and 102.18(b)(1), it is the material that imparts the “essential character” unto the Sugar and Vanillin Blended Products.Accordingly, for marking purposes the country of origin of the Sugar and Vanillin Blends are Brazil, Guatemala and the Central American countries of the raw cane sugar used in the Suga