H317519

 HQ H317519 March 30, 2021 OT:RR:CTF:FTM H317519 TJS CATEGORY: Classification; Origin TARIFF NO.: 2106.90.94; 2106.90.95; 2106.90.97 Ms. Tara Trussell Redpath Sugar Ltd. 95 Queen’s Quay East Toronto, ON M5E 1A3 Canada RE: Modification of HQ H313454; Drink mixes; Tariff Classification; USMCA Dear Ms. Trussell: This is in reference to your correspondence, dated March 19, 2021, requesting reconsideration of Headquarters Ruling Letter (“HQ”) H313454, dated February 4, 2020, concerning U.S. Customs and Border Protection’s (“CBP”) tariff classification of certain drink mixes under the Harmonized Tariff Schedule of the United States (“HTSUS”), and the country of origin marking and eligibility of these drink mixes for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”). Upon review, we have determined HQ H313454 to be in error with respect to the classification of the drink mixes produced under a certain scenario and with respect to the classification analysis pertaining to the remaining drink mixes. Additionally, we are amending HQ H313454 with respect to the eligibility of certain drink mixes for preferential tariff treatment under the USMCA. The country of origin for marking purposes for all of the drink mixes remains Brazil. Therefore, for the reasons set forth below, we hereby modify HQ H313454. FACTS: HQ H313454 described the products at issue as follows: The products at issue consist of the following five dry powdered drink mixes: lemonade, orange, fruit punch, grape, and lemon tea. The drink mixes are composed of several ingredients from various countries that are blended together in Canada. Below is a list of the ingredients for each drink mix and the country from which those ingredients are sourced and their classification under the HTSUS: Lemonade: Ingredient Country of Origin HS Code  Sugar Brazil 1701.99.10  Citric Acid Canada 2918.14.00  Sodium Citrate Canada 2918.15.20  Beatreme Mexico 3302.10.90  Lemon Flavor United States 3302.10.10  Silicon Dioxide United States 2811.22.00  Ascorbic Acid China 2936.27.00  FD&C Yellow #5 colour United States 3203.00.20   Orange: Ingredient Country of Origin HS Code  Sugar Brazil 1701.99.10  Citric Acid Canada 2918.14.00  Sodium Citrate Canada 2918.15.20  Beatreme Mexico 3302.10.90  Lemon Flavor United States 3302.10.10  Silicon Dioxide United Sates 2811.22.00  Ascorbic Acid China 2936.27.00  FD&C Yellow #5 United States 3203.00.20  FD&C Yellow #6 United States 3203.00.20  FD&C Yellow #6 lake United States 3203.00.20   Fruit Punch: Ingredient Country of Origin HS Code  Sugar Brazil 1701.99.10  Citric Acid Canada 2918.14.00  Sodium Citrate Canada 2918.15.20  Beatreme Mexico 3302.10.90  Punch Flavor United States 3302.10.10  Silicon Dioxide United States 2811.22.00  Ascorbic Acid China 2936.27.00  FD&C Red #40 colour United States 3203.00.20  FD&C Red #40 lake United States 3203.00.20   Grape: Ingredient Country of Origin HS Code  Sugar Brazil 1701.99.10  Citric Acid Canada 2918.14.00  Sodium Citrate Canada 2918.15.20  Grape Dried Crystals United States 0806.20.90  Grape Flavor United States 3302.10.10  Silicon Dioxide United States 2811.22.00  Ascorbic Acid China 2936.27.00  FD&C Red #40 colour United States 3203.00.20  FD&C Blue #1 colour United States 3203.00.20   Lemon Tea: Ingredient Country of Origin HS Code  Sugar Brazil 1701.99.10  Caramel Colour United States 3204.19.90  Citric Acid United States 2918.14.00  Sodium Citrate Israel 2918.15.20  Lemon Flavor United States 3302.10.10  Tea Flavor United States 3302.10.10  Silicon Dioxide United States 2811.22.00  Ascorbic Acid China 2936.27.00  Tricalcium Phosphate Israel 2835.26.90   The drink mixes are produced in 2,200 lb. batches in a ribbon blender. Each drink mix is composed of raw cane sugar imported into Canada from Brazil where it is further refined. One by one the sugar and other ingredients are added to the blender where they are mixed together for ten minutes until the blend is made into the drink mix. The final product for each drink mix contains more than 65 percent by dry weight of sugar. The drink mix is then tested for color, brix, and taste. Once approved by the laboratory, the drink mix is prepared and shipped to the United States. The following are three shipment scenarios for the drink mixes: Scenario 1 Blended in Canada and packaged in 2,200 lb supersacks. These supersacks will be shipped to a co-manufacturer in the United States where they will discharge the supersack into their hopper. The product will be filled in fibre canisters or 2 lb pillow pouches, packaged 6 per case, palletized and shipped for sale in the United States to the retail market. Scenario 2 Blended and packaged in Canada. The blended product will be discharged into a hopper where it is gravity fed to the filler. The product will be filled in fibre canisters or 2 lb pillow pouches, packaged 6 per case, palletized and shipped for sale in the United States to the retail market. Scenario 3 Blended and packaged in Canada. The blended product will be discharged into a hopper where it is gravity fed to the filler. The product will be filled in fibre canisters or 2 lb pillow pouches, packaged 6 per case, palletized and shipped for sale in the United States to the foodservice industry (camps, amusement parks & restaurants). To consume the drink mix beverage, the contents of the mix are emptied in a container, and cold water is added according to the instructions on the drink mix. HQ H313454 classified the drink mixes in scenarios one and three under subheading 2106.90.94, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included: Other […]: Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to chapter 17: Other.” The ruling classified the drink mixes in scenario two under subheading 2106.90.95, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included: Other […]: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions” and, if the quantitative limits described in Additional U.S. Note 8 to Chapter 17, HTSUS, have been reached, under subheading 2106.90.97, HTSUS, which provides for “[f]ood preparations not elsewhere specified or included: Other […]: Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: Other.” In classifying the products, HQ H313454 determined that “[a]ll of the drink mixes meet the first two requirements of [Additional U.S. Note 2 to Chapter 17] - that they must contain over 65 percent of dry weight of cane sugar and are capable of being further processed with other ingredients i.e. water.” HQ H313454 further determined that the country of origin of the drink mixes was Brazil. With respect to the USMCA, the ruling determined that the drink mixes classified under subheading 2106.90.95, HTSUS, were eligible for preferential tariff treatment under the USMCA, whereas the drink mixes classified in subheadings 2106.90.94 and 2106.90.97, HTSUS, did not qualify for preferential tariff treatment under the USMCA since the country of origin of the drink mixes for marking purposes was Brazil. In your request for reconsideration, you dispute the classification of the drink mixes under scenario one and the determination that the drink mixes classified in subheadings 2106.90.94 and 2106.90.97, HTSUS, did not qualify for preferential tariff treatment under the USMCA. ISSUES: What is the tariff classification under the HTSUS of the powdered drink mixes produced under scenario one? Whether the drink mixes classified under subheadings 2106.90.94 and 2106.9

Tariff ClassificationClassification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI).  GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes.  In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI 2 through 6 may then be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level. The 2021 HTSUS provisions under consideration are as follows:2106: Food preparations not elsewhere specified or included:2106.90: Other:Other:Other:Other:Other:Articles containing over 65 percent by dry weight of sugar described in additional U.S. note 2 to Chapter 17:2106.90.9400: Other. . . Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17: 2106.90.9500: Described in additional U.S. note 8 to chapter 17 and entered pursuant to its provisions. . . 2106.90.9700: Other. . .* * * * *Additional U.S. Note 2 to Section IV, HTSUS, provides as follows: 2. For the purposes of this section, unless the context otherwise requires—the term “percent by dry weight” means the sugar content as a percentage of the total solids in the product;the term “capable of being further processed or mixed with similar or other ingredients” means that the imported product is in such condition or container as to be subject to any additional preparation, treatment or manufacture or to be blended or combined with any additional ingredient, including water or any other liquid, other than processing or mixing with other ingredients performed by the ultimate consumer prior to consumption of the product;the term “prepared for marketing to the ultimate consumer in the identical form and package in which imported” means th