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NY R01891

May 16, 2005

CLA-2-21:RR:NC:2:228 R01891


TARIFF NO.: 2106.90.9997

Ms. Heather Marcaccini
Cargill, Inc.
P.O. Box 5626
Minneapolis, MN 55440-5626

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

Dear Ms. Marcaccini:

In your letter dated May 3, 2005 you requested a ruling on the status of a yogurt coating from Canada under the NAFTA.

An ingredients breakdown and description of the manufacturing process accompanied your letter. The product is described as a yogurt coating, imported in bulk form, used to enrobe pretzels. The product is said to consist of 53 percent sugar, 39.7 percent vegetable oil, 6 percent whole milk powder, and less than one percent, each, of yogurt powder, yogurt flavor, lecithin, salt, and vanillin. The product is made by blending all ingredients according to a prescribed formula. When solid product is desired, the liquid coating is hardened in cooling tunnels, and broken into chunks.

The sugar is refined in Canada from raw sugar cane imported from non-NAFTA countries. The vegetable oil is refined in the United States from imported Indonesian crude oil. All other ingredients are products of Canada.

The applicable tariff provision for the yogurt coating material will be 2106.90.9997, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for food preparations not elsewhere specified or includedotherotherothercontaining sugar derived from sugar cane and/or sugar beets.. The general rate of duty will be 6.4 percent ad valorem.

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. ยง 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

Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUSA General Note 12(b)(ii)(A) and 12(t)/21.14. The goods will therefore 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 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 Stanley Hopard at 646-733-3029.


Robert B. Swierupski

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