HQ 952272: Classification of a sugar blend

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 952272

                        December 8, 1992


CLA-2   CO:R:C:F 952272K

CATEGORY: Classification

TARIFF No.: 1701.99.0125; 9904.40.20

Mr. Michael Dahm
Willson Freight Services Inc.
560 Delaware Ave.
Buffalo, New York 14202

RE: Classification of a sugar blend

Dear Sir:

     This is in response to your letter of July 21, 1992, in
which you asked for a ruling concerning the classification of a
sugar blend and for other information.

FACTS:

     Sugar from either Australia or Swaziland will be imported
into Canada and refined and then blended with fructose and
dextrose of U.S. origin.  The product will then be imported into
the United States in bulk form.  The composition of the blend
consists of 64 percent refined cane sugar, 31 percent dextrose
and 5 percent fructose. 

ISSUE:

     What is the tariff classification of the blended sugar and
is the product free of duty under the Canadian Free Trade
Agreement (CFTA)?

LAW AND ANALYSIS:

     The classification of imported merchandise under the
Harmonized Tariff Schedule of the United States (HTSUS) is
governed by the principles set forth in the General Rules of
Interpretation (GRI).  GRI 1 requires that classification be
determined first according to the terms of the headings of the
tariff schedule and any relative section and chapter notes and,
unless otherwise required, according to the remaining GRI, taken
in their appropriate order.   Because there is no heading that
provides for blends or mixtures of the sugars, as identified 
                               -2-

above, classification may not be accomplished at the heading or
GRI 1 level.

     GRI 2(b) then requires that "the classification of goods
consisting of more than one material or substance shall be
according to the principles of rule 3."  GRI 3(b) is applicable
for mixtures and that rule requires that "mixtures, composite
goods of different materials or made up of different components 
...which cannot be classified by reference to 3(a), shall be
classified as if they consisted of the material or component
which gives them  their essential character, insofar as this
criterion is applicable."

     Headquarters Ruling Letter (HRL) 082230 dated January 12,
1989 (082230), concerned a blend of 65 percent sugar and 35
percent dextrose.  In applying the above rule, we held that the
sucrose (sugar) was the essential character of the blend and it
is considered as sugar, classifiable in subheading 1701.99,
HTSUS, for cane or beet sugar.  We affirm our position that is
also applicable to your merchandise which is classifiable in
subheading 1701.99.0125, HTSUS.

     You also inquired as to the country of origin of the blend,
whether the blend is subject to quota, and whether the blend is
entitled to treatment under the Canadian Free Trade Agreement
(CFTA).

     In HRL 082033 dated September 5, 1989 (082033), we held that
raw sugar from Australia which is refined in Canada is not
substantially transformed into a Canadian product since the
refining process does not change the essential character of the
sugar.  Accordingly, raw sugar from Australia and Swaziland that
is refined in Canada remains a product of Australia and
Swaziland.

     Australia and Swaziland are both subject to the sugar quota
provided for by the Additional U.S. Note 3 (a) and (b), Chapter
17, HTSUS.  The sugar blend is classifiable under subheading
1701.99.0125, HTSUS, as sugar not to be further refined or
improved in quality.  Accordingly, the sugar is subject to an
additional agricultural fee of 2.2 cents per kilogram under 
subheading 9904.40.20, HTSUS, with a Certificate of Quota
Eligibility.  If a Certificate of Quota Eligibility is not
submitted, the classification would be under subheading
1701.99.0225, HTSUS, and the additional agricultural fee under
subheading 9904.40.20, HTSUS, would also apply.

     With respect to the application of duty reductions under the
CFTA, raw cane sugar is classifiable under subheading 1701.11,
HTSUS; dextrose is classifiable under subheading 1702.30, HTSUS;
and fructose is classifiable under subheading 1702.50, HTSUS.
After refining the raw sugar in Canada and the blending with 

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dextrose and fructose, the product is classifiable under
subheading 1701.99, HTSUS.  To qualify for a duty reduction under
the CFTA, the product must be wholly obtained or produced in the
territory of Canada and/or the United States or, for purposes
here, must have been transformed in the territory of Canada
and/or the United States, so as to be subject to a change in the
tariff classification as set forth in the General Notes to the
HTSUS.  General Note (3)(c)(vii)(R)(4)(bb), HTSUS, for Section
IV, Chapters 16 through 24, requires a change in the merchandise
to heading 1704 from any other heading to qualify as a change in
tariff classification.  Because the blending of the components
does not create the requisite change in tariff classification,
the product does not qualify for duty reduction under the CFTA.

HOLDING:

     Merchandise consisting of raw sugar from Australia or
Swaziland that was refined in Canada and used in a blending
process resulting in a blend composed of 64 percent sugar, 31
percent dextrose and 5 percent fructose is classifiable as sugar,
not to be further refined or improved in quality, under
subheading 1701.99.0125, HTSUS.  Further, the merchandise is not
eligible for duty reduction treatment under the Canadian Free
Trade Agreement.

                         Sincerely,




                         John Durant
                         Director
                         Commercial Rulings Division