N310935

N310935 April 14, 2020 CLA-2-38:OT:RR:NC:N3:140 CATEGORY: Classification TARIFF NO.: 3824.99.9297; 9903.88.03 Ms. Sheri Lawson Wilson International Inc. 160 Wales Avenue, Ste.100 Tonawanda, NY 14150 RE: The tariff classification and country of origin of O Plus AVS product freshness retainer Dear Ms. Lawson: In your letter dated March 27, 2020, you requested you requested a tariff classification and country of origin ruling on behalf of of your client, Food Freshly North America Inc. The subject product is called O Plus AVS, which is a freshness retainer used to extend shelf life of fresh cut fruits and vegetables. It is a watery solution which is used to dip fruits and vegetables in after processing. It will be sold to produce processors. It is mixed and packaged in Germany from ingredients sourced from China. The product will be imported from Germany into Canada and transported to the US by truck through various ports. You provided the following breakdown of ingredients: Sodium ascorbate (Headng 2936) (Derivative of Vitamin C) 60 - 98 % Ascorbic acid (Heading 2936) (Vitamin C) 2 - 20% Citric acid (Heading 2918) 2 - 15% Our research shows that the cited ingredients have (in part) the following uses. Sodium ascorbate has among other uses the function of being used as an antioxidant and an acidity regulator. Citric acid is used both as a natural flavor enhancer and preservative in a variety of foods, such as jams and jellies, and canned fruits and vegetables. It helps to regulate acidity, functions as an antioxidant and helps retain color. The low pH of ascorbic acid can help prevent microbial growth, thereby preventing spoilage and preserving freshness. For these reasons, ascorbic acid is a popular natural ingredient and preservative. You indicate a second prospective manufacturing scenario for the product, where it may be manufactured, with the Citric Acid being made in the EU. You suggest that both formulations will be country of origin Germany as the blending results in a new product with a different and specific use. You also suggest that the O Plus AVS product freshness retainer should be classified in subeading 3824.99.92. We agree. The applicable subheading, for both manufacturing scenarios, of the O Plus AVS product freshness retainer will be 3824.99.9297, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other: Other: Other: Other: Other: Other. The rate of duty will be 5 percent ad valorem. For country of origin marking purposes, a substantial transformation of an article occurs when it is used in manufacture, which results in an article having a name, character, or use differing from that of the article before the processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). In your letter, you indicate that both manufacturing scenarios, will involve the mixing of the raw materials in Germany from chemical ingredients sourced from China and/or the EU. It is our opinion, that the final product results simply from mixing together 3 antioxidant /acidity regulators with a similar end function in the final mixture. The act of mixing together these antioxidants and acidity regulators together does not produce a product with a new character or use. Even if the Citric acid were from the EU, at the levels indicated in the documents received, this would not change the result. It is our opinion that there is no substantial transformation for marking and origin purpsoses. Applying the Marking Rules set forth in section 304 of the regulations we find that for both manufacturing scenarios above, it is our opinion that for marking purposes the country of origin of the O Plus AVS product freshness retainer will be China. Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 3824.99.9297, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 3824.99.9297, HTSUS, listed above. The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively. 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 the World Wide Web at https://hts.usitc.gov/current. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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 Paul Hodgkiss at Paul.Hodgkiss@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division