CBP Finds Mixed Nuts Don't Meet KORUS Eligibility, Not Comparable to NAFTA Treatment
Mixed nuts imported to the U.S. by CIL International that were salted and packaged in South Korea do not meet the eligibility requirements for preferential treatment under the Korea-U.S. Free Trade Agreement (KORUS), said CBP in a recently released ruling, dated Aug. 19. The ruling, HQ H243328, responds to a CIL request that the agency reconsider another ruling on the issue that said the nuts were not eligible under KORUS. The company asked CBP to revise its ruling based on how it treated similar nuts under NAFTA, which CBP said cannot be compared, despite similar language in the free trade agreements.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
CBP in the previous ruling said the nuts are not eligible "as the mixture was not wholly obtained in Korea or the U.S., or both, and did not meet the tariff shift requirements" of General Note 33, which require "a change to subheadings 2008.19 through 2008.99 from any other chapter," said CBP. Also under GN 33, "nuts roasted in oil (and otherwise incidentally processed)" can only be considered originating if the "fresh good" comes from Korea or the U.S. CBP said the salting of the non-originating nuts is incidental processing, which excludes them for KORUS preferential treatment. The nuts in question include a variety of nuts from India, Vietnam, Brazil, Bolivia, Peru and Korea.
The company said CBP should take another look at the ruling because the non-originating nuts imported into Korea have been dried and the requirements under GN 33 specifically points to "fresh" goods. CBP disagreed, because it assumes "that the nuts were dried in the countries in which they were grown and that their countries of origin are the countries in which they were dried and from which they were imported." The origination of a "fresh" good is considered based on the good's "state prior to be frozen, packed, or roast," as defined in rules for Harmonized Tariff Schedule Heading 2008, said CBP. "Whether the nuts were dried when imported is not a consideration under the rule" and "salting or processes incidental to roasting does not confer origin," said CBP. As a result, the previous ruling HQ 240383, is affirmed, the agency said.
The agency should also consider that it last year ruled in NY 228118 that raw, salted cashew nuts imported into Canada from non-NAFTA countries and then roasted and salted in Canada were found to qualify for NAFTA preferential duty treatment, said CIL. CIL similarly salts its nuts after roasting and should receive preferential treatment under KORUS, it told CBP. While NAFTA includes similar wording as KORUS for Chapter 20, a ruling on NAFTA treatment is "inapplicable to rulings decided," under KORUS, said CBP.