Cane and Beet Sugar (Quota, Classification & Entry)

Published CBP guidance; operative status and applicability must be assessed from the retained publisher edition.

What Every Member of the
Trade Community Should Know About:
Cane and Beet
Sugar
(Quota,
Classification &
Entry)

AN INFORMED COMPLIANCE PUBLICATION
APRIL 2012

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Cane and Beet Sugar (Quota, Classification & Entry)
April 2012

NOTICE:
This publication is intended to provide guidance and information to the trade community.
It reflects the position on or interpretation of the applicable laws or regulations by U.S.
Customs and Border Protection (CBP) as of the date of publication, which is shown on
the front cover. It does not in any way replace or supersede those laws or regulations.
Only the latest official version of the laws or regulations is authoritative.

Publication History

First Published: January 2000
Revised February 2000
Revised March 2004
Revised July 2006
Revised April 2012

PRINTING NOTE:
This publication was designed for electronic distribution via the CBP website
(http://www.cbp.gov/) and is being distributed in a variety of formats. It was originally set
up in Microsoft Word97
®
. Pagination and margins in downloaded versions may vary
depending upon which word processor or printer you use. If you wish to maintain the
original settings, you may wish to download the .pdf version, which can then be printed
using the freely available Adobe Acrobat Reader
®
.

Cane and Beet Sugar (Quota, Classification & Entry)
April 2012

PREFACE

On December 8, 1993, Title VI of the North American Free Trade Agreement Implementation
Act (Pub. L. 103-182, 107 Stat. 2057), also known as the Customs Modernization or “Mod” Act,
became effective. These provisions amended many sections of the Tariff Act of 1930 and
related laws.

Two new concepts that emerge from the Mod Act are “informed compliance” and “shared
responsibility,” which are premised on the idea that in order to maximize voluntary compliance
with laws and regulations of U.S. Customs and Border Protection, the trade community needs to
be clearly and completely informed of its legal obligations. Accordingly, the Mod Act imposes a
greater obligation on CBP to provide the public with improved information concerning the trade
community's rights and responsibilities under customs regulations and related laws. In addition,
both the trade and U.S. Customs and Border Protection share responsibility for carrying out
these requirements. For example, under Section 484 of the Tariff Act, as amended (19 U.S.C.
1484), the importer of record is responsible for using reasonable care to enter, classify and
determine the value of imported merchandise and to provide any other information necessary to
enable U.S. Customs and Border Protection to properly assess duties, collect accurate
statistics, and determine whether other applicable legal requirements, if any, have been met.
CBP is then responsible for fixing the final classification and value of the merchandise. An
importer of record’s failure to exercise reasonable care could delay release of the merchandise
and, in some cases, could result in the imposition of penalties.

Regulations and Rulings (RR) of the Office of International Trade has been given a major role in
meeting the informed compliance responsibilities of U.S. Customs and Border Protection. In
order to provide information to the public, CBP has issued a series of informed compliance
publications on new or revised requirements, regulations or procedures, and a variety of
classification and valuation issues.

This publication, prepared by the National Commodity Specialist Division of Regulations and
Rulings is entitled “Cane and Beet Sugar (Quota, Classification & Entry).” It provides guidance
regarding the quota, classification & entry of these items. We sincerely hope that this material,
together with seminars and increased access to rulings of U.S. Customs and Border Protection,
will help the trade community to improve voluntary compliance with customs laws and to
understand the relevant administrative processes.

The material in this publication is provided for general information purposes only. Because
many complicated factors can be involved in customs issues, an importer may wish to obtain a
ruling under Regulations of U.S. Customs and Border Protection, 19 C.F.R. Part 177, or to
obtain advice from an expert who specializes in customs matters, for example, a licensed
customs broker, attorney or consultant.

Comments and suggestions are welcomed and should be addressed to U.S. Customs and
Border Protection, Office of International Trade, Executive Director, Regulations and Rulings,
799 9
th
Street N.W. 7
th
floor, Washington, D.C. 20229-1177.

Sandra L. Bell
Executive Director, Regulations and Rulings
Office of International Trade

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INTRODUCTION.......................................................................................... 7
PRESIDENTIAL PROCLAMATION 6179................................................... 7
Chapter 17 HTSUS, Additional U.S. Note 5 (Quota Allocations).................................. 7
Certificate of Quota Eligibility....................................................................................... 8
Specialty Sugar Certificate........................................................................................... 9
Subheadings 1701.13.1000; 1701.14.1000................................................................ 10
Sampling of Raw Sugar.............................................................................................. 10
Subheadings 1701.13.2000; 1701.14.2000 (Re-Export Sugar)........................... 12
Subheading 1701.12.1000......................................................................................... 13
Subheading 1701.91.1000......................................................................................... 14
Subheadings 1701.99.1010; 1701.99.1025; 1701.99.1050........................................ 14
Subheading 1702.90.1000......................................................................................... 15
Subheading 2106.90.4400......................................................................................... 17
High Tariff Rate Subheadings.................................................................................... 17
GENERAL NOTE 15.................................................................................. 18
COUNTRY OF ORIGIN MARKING........................................................... 19
ADDITIONAL INFORMATION................................................................... 21
The Internet................................................................................................................ 21
Customs Regulations................................................................................................. 21
Customs Bulletin........................................................................................................ 21
Importing into the United States................................................................................. 22
Informed Compliance Publications............................................................................. 22
Value Publications...................................................................................................... 23
“Your Comments are Important”................................................................................. 24

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INTRODUCTION

This publication covers the quota, classification and entry requirements of sucrose
derived from sugar cane and sugar beets.

Sugars are products that may be classified in chapter 17, chapter 21 or chapter 29 of
the Harmonized Tariff Schedule of the United States (HTSUS). The sugars of chapter
17 include products such as sucrose, glucose, fructose, lactose and maltose. The
sugars of chapter 21 include syrups that contain added coloring or flavoring matter. The
sugars of chapter 29 include products such as chemically pure galactose, sorbose,
xylose and raffinose.

Classification depends on the type of sugar, the form of the sugar and the source of
the sugar.

While there are many types of sugar, only sucrose is subject to a quota. Sucrose
can be obtained from a variety of sources, including sugar cane, sugar beets, maple
sugar, sorghum, carob beans and palms.

PRESIDENTIAL PROCLAMATION 6179

Importation of sugar is governed by Presidential Proclamation 6179. Presidential
Proclamation 6179, dated September 13, 1990, established a tariff rate quota on
sucrose derived from sugar cane or sugar beets effective October 1, 1990. The
Proclamation set a lower tariff rate of duty for sucrose entered up to a specified quota
level, and a significantly higher rate of duty for sucrose entered in excess of the quota
allocation.

The quota applies to sucrose in both dry and liquid forms, which are classified in
chapter 17 and chapter 21 of the HTSUS. The quota period begins on October 1 and
extends to September 30 of the next year.

Entries of sucrose classified under both the low and high tariff rates must be reported to
the Customs Quota Section in Customs Headquarters.

Chapter 17 HTSUS, Additional U.S. Note 5 (Quota Allocations)

Additional U.S. Note 5 of chapter 17 describes the modifications of the duty rates and
quantitative limitations that are contained in the Proclamation.

Additional U.S. Note 5(a)(i) provides for three different quota allocations. The Note
states:

The aggregate quantity of raw cane sugar entered, or withdrawn from
warehouse for consumption, under subheadings 1701.13.1000 or
1701.14.1000, during any fiscal year, shall not exceed in the aggregate an

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amount (expressed in terms of raw value), as shall be established by the
Secretary of Agriculture (hereinafter referred to as “the Secretary”), and
the aggregate quantity of sugars, syrups and molasses entered, or
withdrawn from warehouse for consumption, under subheadings

1701.12.10, 1701.91.10, 1701.99.10, 1702.90.10 and 2106.90.44, during
any fiscal year, shall not exceed in the aggregate an amount (expressed in
terms of raw value), as shall be established by the Secretary. With either
the aggregate quantity of raw cane sugar or the aggregate quantity for
sugars, syrups and molasses other than raw cane sugar, the Secretary
may reserve a quota quantity for the importation of specialty sugars as
defined by the United States Trade Representative.

The first quota allocation covers raw cane sugar provided for in subheadings
1701.13.10 or 1701.14.10. This quota is allocated on a country by country basis by the
United States Trade Representative, as published in the Federal Register, pursuant to
Additional U.S. Note 5(b)(i).

In alphabetical order, the countries currently with an allocation under this quota are:
Argentina, Australia, Barbados, Belize, Bolivia, Brazil, Colombia, Congo, Côte d’Ivoire,
Costa Rica, Dominican Republic, Ecuador, El Salvador, Fiji, Gabon, Guatemala,
Guyana, Haiti, Honduras, India, Jamaica, Madagascar, Malawi, Mauritius, Mexico,
Mozambique, Nicaragua, Panama, Papua New Guinea, Paraguay, Peru, Philippines,
South Africa, St. Kitts & Nevis, Swaziland, Taiwan, Thailand, Trinidad-Tobago, Uruguay
and Zimbabwe.

Certificate of Quota Eligibility

Additional U.S. Note 5(b)(iv) states:

The United States Trade Representative may promulgate regulations
appropriate to provide for the allocations authorized pursuant to this note.
Such regulations may, among other things, provide for the issuance of
certificates of eligibility to accompany any sugars, syrups or molasses
(including any specialty sugars) imported from any country or area for
which an allocation has been provided and for such minimum quota
amounts as may be appropriate to provide reasonable access to the U.S.
market for articles the product of those countries or areas having small
allocations.

In addition to having a raw sugar produced in a country with a quota allocation, a
Certificate of Quota Eligibility (CQE) is required in order to qualify for the low tariff
rate under subheadings 1701.13.10 or 1701.14.10. The CQE is obtained by the
importer from the country producing the raw sugar.

The Certificates are furnished to the various countries by the United States Department
of Agriculture (USDA). Each CQE is numbered and identified by foreign country. It

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contains information that includes the date of the current quota period, the shipper, the
vessel, the port of loading, the name and address of the consignee, date of departure,
etc.

A CQE is only valid for the quota period it covers. It must be presented at the time of
entry. No bond may be taken for this document.

Note that a country without a quantity allocation under this quota may export raw cane
sugar to the United States provided that the high tariff rate duties are paid. A CQE is
not required in this case. This does not apply to any country subject to a United States
embargo.

The second quota allocation provided by Additional U.S. Note 5(a)(i) pertains to
subheadings 1701.12.10, 1701.91.10, 1701.99.10, 1702.90.10, and 2106.90.44. This
quota allocation is sometimes referred to as the “Refined Sugar Quota”, but as we will
see later, it covers more than simply refined sugar. With two exceptions, this quota is
allocated on a global, first come, first served basis. As a result, the quota opens and
fills on the same day.

The two exceptions to the global allocation are Canada and Mexico. Each of these
countries has a specific allocation under this quota. However, sugar from Canada and
Mexico may enter under the general global quota, if it is still open, before using their
specific allocations.

Mexico and Canada are required to provide a CQE to obtain the low tariff rates when
entering under its specific quota allocation.

The third and final quota allocation provided by Additional U.S. Note 5(a)(i) is for
Specialty Sugars. This is actually a part of the second quota allocation, the so-called
“Refined Sugar Quota.” It currently covers refined sugars classified chiefly in two
subheadings: 1701.91.1000 and 1701.99.1010. It has a specific quantity allocation, and
is based on a first come, first served basis.

Note that Specialty Sugars may enter under the general refined global quota, before
using their specific quota allocation.

Specialty Sugar Certificate

The Office of the United States Trade Representative determines which products can
be designated as Specialty Sugars. As per the aforementioned Additional U.S. Note
5(b)(iv), a Specialty Sugar Certificate is required in order to enter sugar under the
specific Specialty Sugar quota allocation.

An importer writes a letter to USDA, describing the product, providing technical
information and furnishing a sample of the sugar. The Specialty Sugar Certificate is
actually the response letter from USDA to the importer indicating that the product is a

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Specialty Sugar. This letter must be present
ed at the time of entry for a sugar to obtain
the low tariff rate under this quota. No bond may be taken for this document.

A sugar may be entered at the high tariff rates without a Specialty Sugar Certificate,
provided the country is not subject to a United States embargo.

The following is a listing of the various subheadings of chapter 17 and chapter 21,
HTSUS, in which different forms of sugar are classified. This listing discusses the
varieties of sugar products and steps that must be taken by importers when importing
sugar products.

Subheadings 1701.13.1000; 1701.14.1000

Subheadings 1701.13.1000, 1701.14.1000, HTSUS, provide for “Cane or beet sugar
and chemically pure sucrose, in solid form: Raw sugar not containing added
flavoring or coloring matter: Cane sugar...Described in additional U.S. note 5 to
this chapter and entered pursuant to its provisions.”

This is the tariff provision for raw cane sugar, which is identified in the first quota
allocation in additional U.S. note 5(a)(i). It provides for the low tariff rate of duty. The
subheading for the high tariff rate of duty is 1701.13.5000, 1701.14.5000, HTSUS.

Products classified in these provisions must be derived from sugar cane and must be in
solid form. The term “solid” includes powders, crystals, etc. It excludes sugar in the
form of a liquid or syrup. The products classified in these subheadings cannot contain
any added flavoring or coloring matter.

The term raw sugar is defined in Subheading Note 1 to chapter 17: “For the purposes
of subheadings 1701.12, 1701.13 and 1701.14, ‘raw sugar’
means sugar whose content
of sucrose by weight, in the dry state, corresponds to a polarimeter reading of less than
99.5 degrees.” Polarimetric testing uses optical means to determine the percentage of
sucrose in a product.

Sampling of Raw Sugar

Customs Directive 3820-001B, dated May 1, 2007, requires that all importations of raw
sugar must be sampled and tested by the United States CBP Laboratory. One sample
of approximately one pound or 450 grams is required for each 2,100,000 pounds of bulk
raw sugar. For raw sugar imported in bags, one bag out of each 100 bags must be
sampled, or 10 bags must be sampled, whichever is greater.

The raw sugar must be sampled for various purposes. First, to determine the polarity
of the sugar for classification. Noting the above referenced Subheading Note 1 to
chapter 17, raw sugar must have a polarity of less than 99.5 degrees.

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Second, s
ampling is required to determine the dutiable quantity of the raw sugar.
Additional U.S. Note 1 to chapter 17 states: “The term ‘degree’
as used in the ‘Rates of
Duty’ columns of this chapter means International Sugar Degree as determined by
polarimetric test performed in accordance with procedures recognized by the
International Commission for Uniform Methods of Sugar Analysis (ICUMSA).” The
specific rates of duty for sugar are applied only on the actual sugar content of the
products as determined by the CBP Laboratory.

Finally, the sampling and testing of raw sugar is required to determine the “raw value”
of the sugar. This concept is addressed in Additional U.S. Note 5(c) to chapter 17,
which provides:

For purposes of this note, the term raw value
means the equivalent of
such articles in terms of ordinary commercial raw sugar testing 96 degrees
by the polariscope as determined in accordance with regulations or
instructions issued by the Secretary of the Treasury. Such regulations or
instructions may, among other things, provide: (i) for the entry of such
articles pending a final determination of polarity; and (ii) that positive or
negative adjustments for differences in preliminary and final raw value be
made in the same or succeeding quota periods. The principal grades and
types of sugar shall be translated into terms of raw value in the following
manner--

(A) For articles described in subheadings 1701.12.05, 1701.12.10,
1701.12.50, 1701.13.05, 1701.13.10, 1701.13.20, 1701.13.50,
1701.14.10, 1701.14.20, 1701.14.50, 1701.91.05, 1701.91.10,
1701.91.30, 1701.99.05, 1701.99.10, 1701.99.50, 2106.90.42, 2106.90.44
and 2106.90.46 by multiplying the number of kilograms thereof by the
greater of 0.93, or 1.07 less 0.0175 for each degree of polarization under
100 degrees (and fractions of a degree in proportion).

(B) For articles described in subheading 1702.90.05, 1702.90.10 and
1702.90.20, by multiplying the number of kilograms of the total sugars
thereof (the sum of the sucrose and reducing or invert sugars) by 1.07.

(C) The Secretary of the Treasury (now Secretary of Homeland Security) shall
establish methods for translating sugar into terms of raw value for any
special grade or type of sugar, syrup, or molasses for which he/she
determines that the raw value cannot be measured adequately under the
above provisions.

The various quota quantity allocations are expressed in terms of raw value. Since
sugar is imported at different polarities or degrees of purity, the above concept of raw
value is used to standardize sugar shipments at a polarity of 96 degrees.

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The final raw value figures determined by the Customs Laboratory are sent to the Quota
Section in Customs Headquarters in order to adjust the quota quantities.

Subheadings 1701.13.2000; 1701.14.2000 (Re-Export Sugar)

Subheadings 1701.13.2000, 1701.14.2000, HTSUS, provide for Cane or beet sugar
and chemically pure sucrose, in solid form: Raw sugar not containing added
flavoring or coloring matter: Cane sugar: Other sugar to be used for the
production (other than by distillation) of polyhydric alcohols, except polyhydric
alcohols for use as a substitute for sugar in human food consumption, or to be
refined and re-exported in refined form or in sugar-containing products, or to be
substituted for domestically produced raw cane sugar that has been or will be
exported.

This tariff provision allows the entry of raw sugar into the United States without the
application of a tariff rate quota, provided that the sugar is used in one of three ways: to
produce a polyhydric alcohol, to be refined and then re-exported, or to be refined and
re-exported in a sugar containing product.

This provision refers to the “Sugar Re-Export Program”, which is regulated by the
United States Department of Agriculture (USDA).

The requirements for classification under this subheading are stated in Additional U.S.
Note 6 of chapter 17. The first part of this note simply restates the wording of the tariff
provision.

The second part of the note states: “The Secretary of Agriculture may issue licenses for
such entries and may promulgate such regulations (including any terms, conditions,
certifications, bonds, civil penalties, or other limitations) as are appropriate to ensure
that sugar entered under subheading 1701.13.20 is used only for such purposes.”

USDA issues a license for each of the uses of the raw sugar in subheadings
1701.13.2000 and 1701.14.2000, HTSUS.

A producer of polyhydric alcohol can obtain a license in the amount of up to 10,000
short tons, refined value. The polyhydric alcohol produced from the sugar does not
have to be exported, but it cannot be used for human consumption.

A sugar refiner can obtain a license for raw sugar in an amount of up to 50,000 metric
tons, raw value. The refined sugar must be exported, or transferred to a manufacturer
of sugar containing products no later than 90 days after the date of entry.

A manufacturer of sugar-containing products can obtain a license for an amount of up to
10,000 short tons, refined value. The sugar-containing product must be exported no
later than 18 months from the date of transfer of a quantity of refined sugar from a
refiner.

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The Re-Export Program also allows the use of domestic (US) raw cane sugar that has
been or will be exported.

In addition to obtaining a license, entries of sugar under subheading 1701.13.20,
HTSUS, must include a Summary of Transactions Sheet. This sheet contains
information on the quantity of sugar, date of entry, port of entry, etc. It must be signed
by a CBP official, and given to USDA by the importer.

It should be noted that USDA maintains these licenses within the same Agricultural
Licensing System as is used for the Dairy Import Licensing program and regulates all
related matters for this program including, bonds, record keeping, proof of export,
penalties, etc.

It is also important to remember that the Re-Export Program provided for under
subheading 1701.13.2000, HTSUS, applies only
to raw cane sugar.

Subheading 1701.12.1000

Subheading 1701.12.1000, HTSUS, provides for Cane or beet sugar and
chemically pure sucrose in solid form: Raw sugar not containing added flavoring
or coloring matter: Beet sugar...Described in additional U.S. note 5 to this chapter
and entered pursuant to its provisions.

This is the tariff provision for raw beet sugar, which is identified in the second quota
allocation in Additional U.S. Note 5 (a)(i). It provides for the low tariff rate of duty. The
subheading for the high tariff rate of duty is 1701.12.5000, HTSUS.

Products classified in these subheadings are similar to raw cane sugar in that they must
be in solid form, not contain any added flavoring or coloring matter, and are defined in
Subheading Note 1 to chapter 17: “For the purposes of subheadings 1701.13 and
1701.12, “raw sugar”
means sugar whose content of sucrose by weight, in the dry state,
corresponds to a polarimetric reading of less than 99.5 degrees.”

Subheading 1701.12, HTSUS, differs from subheadings 1701.13.10 and 1701.14.10,
HTSUS, in that it provides for sucrose derived from sugar beets, instead of sugar cane.
It is also noted that there is no Re-Export Program for raw sugar derived from beets.
There is very little raw beet sugar produced anywhere in the world today.

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Subheading 1701.91.1000

Subheading 1701.91.1000, HTSUS, provides for Cane or beet sugar and
chemically pure sucrose, in solid form: Other: Containing added flavoring or
coloring matter: Containing added coloring but not containing added flavoring
matter...Described in additional U.S. note 5 to this chapter and entered pursuant
to its provisions.

This is the tariff provision for cane or beet sugar, as well as chemically pure sucrose,
containing added coloring matter, which is identified in the second quota allocation in
additional U.S. note 5(a)(i). It provides for the low tariff rate of duty. The subheading for
the high tariff rate of duty is 1701.91.3000, HTSUS.

Products classified in these provisions are cane or beet sugar, and chemically pure
sucrose in solid form, but now they may contain added coloring matter.

Regarding chemically pure sucrose, the Explanatory Notes to Chapter 17 state: “The
heading also includes chemically pure sucrose in solid form, whatever its origin.
Sucrose (other than chemically pure sucrose) obtained from sources other than sugar
cane or sugar beet is excluded (heading 17.02).”

Generally, the items classified in these provisions consist of a refined cane or beet
sugar with a small amount of added coloring, which are used as decorations on cakes,
cookies, confectionery, etc.

These provisions do not, however, cover sucrose with added flavoring matter, which is
provided for in subheadings 1701.91.42 through 1701.91.80, HTSUS, and is subject to
the sugar containing products quotas, not to the Additional U.S. Note 5 quotas.

Subheadings 1701.99.1010; 1701.99.1025; 1701.99.1050

Subheadings 1701.99.1010, 1701.99.1025 and 1701.99.1050 HTSUS, provide for
Cane or beet sugar and chemically pure sucrose, in solid form: other: other...
Described in additional U.S. note 5 to this chapter and entered pursuant to its
provisions.

These tariff provisions are identified in the second quota allocation in additional U.S.
note 5(a)(i). They provide for the low tariff rate of duty. The subheadings for the high
tariff rate of duty are 1701.99.5010, 1701.99.5025 and 1701.99.5050, HTSUS.

Products classified in these provisions must be cane or beet sugar or chemically pure
sucrose in solid form, which can not be raw sugar, or sucrose with added coloring or
flavoring matter. Effective July 1, 2004, the Harmonized Tariff was modified to provide
specific statistical breakouts for Specialty sugars under subheadings 1701.99.1010 and
1701,99.5010, HTSUS. Effective July 1, 2011, there is a new Statistical Note 1, which
states “For the purposes of heading 1701, the term “further processing” means

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performing those actions to further improve the quality of sugar by a refiner through
affination or defecation, clarification and further purification by absorption or
crystallization.” Subheadings 1701.99.10.25 and 1701.99.50.25 are sugar “not for
further processing,” and subheadings listed under “other”, 1701.99.10.50 and
1701.99.50.50 are thus “for further processing.”

There are two main types of products classified in these provisions. The first is refined
sugar. Subheading Note 1 to Chapter 17 defined raw sugar as having a content of
sucrose by weight, in the dry state, corresponding to a polarimeter reading of less than
99.5 degrees. Therefore, refined sugar would have a content of sucrose by weight in
the dry state, corresponding to a polarimeter reading of 99.5 degrees or higher.

The second type of product classified in these provisions is a mixture of refined sucrose
with other substances, when it is determined that the sucrose imparts the essential
character to the mixture under GRI 3(b). Examples of these would be mixtures of large
quantities of sucrose with smaller amounts of the other sugars of chapter 17, such as
dextrose, fructose, lactose or maltose.

Other types of products classified here are mixtures containing predominately sucrose
with smaller amounts of starches or flours. It is noted that these mixtures are in solid
form, usually consisting of powders, crystals, etc.

Subheading 1702.90.1000

Subheading 1702.90.1000, HTSUS, provides for other sugars...sugar syrups not
containing added flavoring or coloring matter...other, including invert sugar:
Derived from sugar cane or sugar beets: Containing soluble non-sugar solids
(excluding any foreign substances, including but not limited to molasses, that
may have been added or developed in the product) equal to 6 percent or less by
weight of the total soluble solids...Described in additional U.S. note 5 to this
chapter and entered pursuant to its provisions.

This is the tariff provision for sugar syrups, etc., which is identified in the second quota
allocation in additional U.S. Note 5(a)(i). It provides for the low rate of duty. The
subheading for the high rate of duty is 1702.90.2000, HTSUS.

These are the last subheadings in Chapter 17, HTSUS, that are subject to the tariff rate
quota of additional U.S. note 5. They are also the first subheadings subject to this
quota that do not pertain to sugar in solid form.

Products classified in these subheadings include syrups obtained by dissolving sucrose
from sugar cane or sugar beets in water, or juices and syrups that are obtained during
the extraction of sugars derived from sugar cane or sugar beets. Unlike the sucrose in
solid form, these products can not contain any coloring or flavoring matter.

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They must also meet the requirement that they contain 6 percen
t or less soluble non-
sugar solids, when considering the total soluble solids in the product. In addition,
this calculation excludes any foreign material added or developed in the product.
Generally, this would refer to materials added in the extraction or refining process.

Since syrups, etc. containing over 6 percent soluble non-sugar solids are not subject to
tariff rate quotas (subheading 1702.90.4000), samples of merchandise entered under
these subheadings are sent to the U.S. CBP laboratory to check the soluble non-sugar
solids Therefore, it is advisable to include information on the soluble non-sugar solids
content of the products when entry is made on this merchandise.

A sugar syrup containing over 6 percent soluble non-sugar solids was the subject of a
New York ruling, a Headquarters ruling, and two court cases.

New York ruling 810328, dated May 15, 1995, concerned the classification of a sugar
syrup, which was produced by adding molasses to raw sugar, and then adding water.
The resulting syrup contained over 6 percent soluble non-sugar solids, and was
classified under subheading 1702.90.4000, HTSUS. After importation, the molasses
was removed and the syrup was used in the same manner as syrup subject to quota.

Headquarters issued ruling HQ 961273, dated November 8, 1999, revoking the NY
ruling, and classifying the syrup in 1702.90.1000/1702.90.2000, subject to quota. The
Headquarters ruling indicated that the product had no commercial identity. It was
manufactured simply to avoid the quota. The addition of molasses was a foreign
substance, which is excluded from the calculation of the soluble non-sugar solids.

In Heartland By Products v. United States & the Sugar Beet Association
, Slip Op 99-
110, dated October 19, 1999, the Court of International Trade determined that the syrup
was plainly described in subheading 1702.90.4000, that the addition of molasses was
not a foreign substance, since molasses is made from cane and beet sugar, and that
sugar, molasses and syrup all have the same chemical ingredients, including impurities
that naturally occur in sugar. The court further said that subheading 1702.90.4000 is
not a use provision, and that because a product is classified in its imported condition an
importer has a right to fashion his merchandise to obtain the lowest duty rate and
classification.

The Heartland
decision was appealed. In Heartland By-Products, Inc. v. United States,
264 F.3d 1126 (Fed. Cir. 2001), the Court of Appeals for the Federal Circuit upheld
CBP’ determination that adding molasses to raw sugar prior to importation in order to
obtain a lower duty rate and to avoid quota restrictions was improper tariff engineering.
The court also upheld Headquarters’ interpretation that the addition of the molasses
was adding a foreign substance and must be excluded when determining the soluble
non-sugar solids. Finally, the court upheld the revocation ruling classifying the sugar
syrup under 1702.90.10/20, HTSUS. The U.S. Supreme Court denied certiorari, 537
U.S. 812 (2002).

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Subheadings 1702.90.1000 and 1702.90.2000, HTSUS, also cover invert sugar, whic
h
must be derived from sugar cane or sugar beets. The Explanatory Notes to Chapter 17,
HTSUS, describe this product as: “Invert sugar...is usually prepared commercially by
the hydrolysis of refined sucrose solutions and consists of equal proportions by weight
of glucose and fructose.”

It should also be noted that sucrose solutions that are partially inverted are also covered
by these provisions.

Subheading 2106.90.4400

Subheading 2106.90.4400, HTSUS, provides for syrups derived from cane or beet
sugar, containing added coloring but not added flavoring matter... Described in
additional U.S. note 5 to chapter 17 and entered pursuant to its provisions.

This is the tariff provision for sucrose syrups with added coloring, which is identified in
the second quota allocation in Additional U.S. Note 5(a)(i). It provides for the low tariff
rate of duty. The subheading for the high tariff rate of duty is 2106.90.4600, HTSUS.

Products classified in these provisions must be syrups that are derived from sugar
cane or sugar beets, and contain added coloring matter.

These syrups are classified in chapter 21, instead of in chapter 17, because Heading
1702 only provides for “sugar syrups not containing added flavoring or coloring
matter....” For example, the Explanatory Notes to chapter 17, under section (B) Sugar
Syrups, state: “This part covers syrups of all sugars...provided they do not contain
added flavoring or coloring matter (see Explanatory Note to heading 21.06)”.

The syrups in these subheadings cannot contain any added flavoring matter.
Flavored syrups are provided for in various 2106.90 subheadings, and are subject to the
sugar containing products quotas, not to the U.S. Note 5 quotas.

High Tariff Rate Subheadings

The high tariff rate subheadings previously mentioned included: 1701.13.5000,
1701.14.5000 (raw cane sugar), 1701.12.5000 (raw beet sugar), 1701.91.3000 (sucrose
with added coloring), 1701.99.5010, 1701,99.5025, 1701.99.5050 (refined sucrose),
1702.90.2000 (sucrose syrups) and 2106.90.4600 (sucrose syrups with added coloring).

Classification under these subheadings is required for three main reasons:

(1) A quota quantity has not been allocated for a product.
(2) A quota allocation is filled for a product.
(3) A product does not satisfy a quota requirement, usually involving specific
documentation, which must be presented at the time of entry.

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Products classified under the high tariff rate subheadings are also subject to the
safeguard measures provided in Chapter 99, Subchapter IV of the Harmonized Tariff
Schedule. The relevant safeguard measures, which are described in U.S. Notes 1 and
2 to Subchapter IV, provide for duties based either upon the value or the quantity of
goods imported into the United States for certain agricultural products.

As stated in U.S. Note 1: “All of the duties provided for in this subchapter are cumulative
duties which apply in addition to the duties, if any, otherwise imposed in the tariff
schedule on the goods described therein”.

Currently, these additional duties are based on the value of the goods as provided for in
the various Chapter 99, Subchapter IV subheadings. If it is determined that the
additional duties are to be based on quantity, notice must be published in the Federal
Register by the Secretary of Agriculture.

These safeguard measures, requiring additional duties, do not apply to goods of
Canada, Mexico, Jordan, Singapore, Chile, Australia, or Morocco.

These preferential duty rates are provided for by the Andean Trade Preference Act
(ATPA), the Caribbean Basin Initiative (CBI), the Generalized System of Preferences
(GSP), the United States-Israel Free-Trade Agreement (IFTA), the North American Free
Trade Agreement (NAFTA), and the United States-Jordan Free Trade Area
Implementation Act (JFTA), the United States-Singapore Free Trade Agreement, the
United States-Chile Free Trade Agreement, the United States-Australia Free Trade
Agreement, and the United States-Morocco Free Trade Agreement Act (MA), the DR
CAFTA and soon Colombia, Panama and South Korea. The only “Special” duty rates
that are applicable pertain to products from Mexico, Jordan, Singapore, Chile, and
Morocco.

GENERAL NOTE 15

General Note 15 of the Harmonized Tariff Schedule provides for: “Exclusions.
Whenever any agricultural product of chapters 2 through 52, inclusive, is of a type (i)
subject to a tariff rate quota and (ii) subject to the provisions of subchapter IV of chapter
99, entries of such products described in this note shall not be counted against the
quantity specified as the in-quota quantity for any such product in such chapters”.

All of the aforementioned sugar cane and sugar beet products include tariff provisions
that reference General Note 15. These subheadings include: 1701.13.0500,
1701.14.0500 (raw cane sugar), 1701.12.0500 (raw beet sugar), 1701.91.0500 (sucrose
with added coloring), 1701.99.0500 (refined sucrose), 1702.90.0500 (sucrose syrups),
and 2106.90.4200 (sucrose syrups with added coloring).

General Note 15 allows classification under these subheadings, which will not count
against the low tariff rate quota quantity allotment, for five circumstances. The three
that relate to the listed subheadings include:

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(a) such pr
oducts imported by or for the account of any agency of the U.S.
Government;
(b) such products imported for the personal use of the importer, provided

that the net quantity of such product in any one shipment does not
exceed 5 kilograms;
(c) such products, which will not enter the commerce of the United States,
imported as samples for taking orders, for exhibition, display or
sampling at a trade fair, for research, for use by embassies of
foreign governments or for testing of equipment, provided that
written approval of the Secretary of Agriculture or his designated
representative the United States Department of Agriculture (USDA)
is presented at the time of entry.

General Note 15 provides additional instruction regarding item (c) above: “In applying to
USDA for approval under subdivision (c) of this note, the importer must identify the
product, quantity and intended use of the goods for which an exemption is sought.
USDA may seek additional information and specify such conditions of entry as it deems
necessary to ensure that the product will not enter the commerce of the United States.”

The subheadings that refer to General Note 15 should not be used to classify quota
products unless one of the circumstances listed in items (a), (b) or (c) is applicable.

COUNTRY OF ORIGIN MARKING

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304),
provides that, unless excepted, every article of foreign origin (or its container) imported
into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and
permanently as the nature of the article (or its container) will permit, in such manner as
to indicate to the ultimate purchaser the English name of the country of origin of the
article. Part 134 of the Customs Regulations (19 CFR Part 134), implements the
country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The “country of origin” for marking purposes is defined by section 134.1(b), Customs
Regulations (19 CFR 134.1(b)), to mean the country of manufacture, production, or
growth of any article of foreign origin entering the United States. Further work or
material added to an article in another country must effect a substantial transformation
in order to render such other country the ”country of origin.”

Headquarters ruling HQ 082033, dated September 5, 1989 determined that the refining
of a raw sugar is not a substantial transformation.

This ruling concerned raw sugar from Australia that was refined in Canada. The refining
process included washing to remove the film of molasses, melting into a syrup,
clarification, decolorization, evaporation and crystallization.

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Headquarters stated: “The refining of cane sugar does not create an article with a new
name, character or use. The product remains sucrose which, while upgraded by
refining, retains the same use as with raw sugar: to provide a product with sweet taste
and nutrient value.”

Therefore, the country of origin of a refined sucrose is the country producing the raw
sugar, not the country where the sucrose is refined.

Headquarters ruling HQ 086097, dated May 15, 1990, determined that a sucrose syrup
produced from raw or refined sugar is not a substantial transformation.

This ruling concerned raw or refined crystalline sucrose, which was produced in the
United States or India and then sent to Canada for processing into a syrup. The
processing in Canada included pouring the dry sucrose into a heated tank, where it was
stirred and dissolved. The liquid sugar was pumped through strainers and then through
carbonation vessels where absorption occurs.

Headquarters stated: “The character of the sugar remains the same: sucrose, whether
in crystalline form or syrup, remains sucrose with the same sweetness and nutrient
value...Also, the fact that the product is now called a syrup instead of sugar is not
dispositive as to whether there has been a substantial transformation.”

Therefore, the country of origin of a sucrose syrup is the country producing the
crystalline raw or refined sucrose.

The marking rules for sucrose products from NAFTA countries (the United States,
Mexico and Canada) are found in the Annex 311 rules for determining the country of
origin of NAFTA goods set forth in 19 CFR Part 102. Note T.D. 96-46, published in 61
Federal Register 28932.

Under the NAFTA marking rules, raw sucrose refined in a NAFTA country does not
undergo a tariff shift, and remains a product of the country producing the raw sucrose.

Also, the production of a sucrose syrup in a NAFTA country from raw or refined
sucrose does not undergo a tariff shift, and remains a product of the country
producing the crystalline raw or refined sucrose.

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ADDITIONAL INFORMATION

The Internet

The home page of U.S. Customs and Border Protection on the Internet’s World Wide
Web, provides the trade community with current, relevant information regarding CBP
operations and items of special interest. The site posts information -- which includes
proposed regulations, news releases, publications and notices, etc. -- that can be
searched, read on-line, printed or downloaded to your personal computer. The web site
was established as a trade-friendly mechanism to assist the importing and exporting
community. The web site also links to the home pages of many other agencies whose
importing or exporting regulations that U.S. Customs and Border Protection helps to
enforce. The web site also contains a wealth of information of interest to a broader
public than the trade community. For instance, the “Know Before You Go” publication
and traveler awareness campaign is designed to help educate international travelers.

The web address of U.S. Customs and Border Protection is http://www.cbp.gov

Customs Regulations

The current edition of Customs and Border Protection Regulations of the United States
is a loose-leaf, subscription publication available from the Superintendent of
Documents, U.S. Government Printing Office, Washington, DC 20402; telephone (202)
512-1800. A bound edition of Title 19, Code of Federal Regulations is also available for
sale from the same address. All proposed and final regulations are published in the
Federal Register, which is published daily by the Office of the Federal Register, National
Archives and Records Administration, and distributed by the Superintendent of
Documents. Information about on-line access to the Federal Register may be obtained
by calling (202) 512-1530 between 7 a.m. and 5 p.m. Eastern time. These notices are
also published in the weekly Customs Bulletin described below.

Customs Bulletin

The Customs Bulletin and Decisions (“Customs Bulletin”) is a weekly publication that
contains decisions, rulings, regulatory proposals, notices and other information of
interest to the trade community. It also contains decisions issued by the U.S. Court of
International Trade, as well as customs-related decisions of the U.S. Court of Appeals
for the Federal Circuit. Each year, the Government Printing Office publishes bound
volumes of the Customs Bulletin. Subscriptions may be purchased from the
Superintendent of Documents at the address and phone number listed above.

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Importing into the United States

This publication provides an overview of the importing process and contains general
information about import requirements. The current edition of Importing Into the United
States contains much new and revised material brought about pursuant to the Customs
Modernization Act (“Mod Act”). The Mod Act has fundamentally altered the relationship
between importers and U.S. Customs and Border Protection by shifting to the importer
the legal responsibility for declaring the value, classification, and rate of duty applicable
to entered merchandise.

The current edition contains a section entitled "Informed Compliance." A key component
of informed compliance is the shared responsibility between U.S. Customs and Border
Protection and the import community, wherein CBP communicates its requirements to
the importer, and the importer, in turn, uses reasonable care to assure that CBP is
provided accurate and timely data pertaining to his or her importation.

Single copies may be obtained from local offices of U.S. Customs and Border
Protection, or from the Office of Public Affairs, U.S. Customs and Border Protection,
1300 Pennsylvania Avenue NW, Washington, DC 20229. An on-line version is
available at the CBP web site. Importing into the United States is also available for
sale, in single copies or bulk orders, from the Superintendent of Documents by calling
(202) 512-1800, or by mail from the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 979050, St. Louis, MO 63197-9000.

Informed Compliance Publications

U.S. Customs and Border Protection has prepared a number of Informed Compliance
publications in the “What Every Member of the Trade Community Should Know
About:...” series. Check the Internet web site http://www.cbp.gov
for current
publications.

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Value Publications

Customs Valuation under the Trade Agreements Act of 1979 is a 96-page book
containing a detailed narrative description of the customs valuation system, the customs
valuation title of the Trade Agreements Act (§402 of the Tariff Act of 1930, as amended
by the Trade Agreements Act of 1979 (19 U.S.C. §1401a)), the Statement of
Administrative Action which was sent to the U.S. Congress in conjunction with the TAA,
regulations (19 C.F.R. §§152.000-152.108) implementing the valuation system (a few
sections of the regulations have been amended subsequent to the publication of the
book) and questions and answers concerning the valuation system.

Customs Valuation Encyclopedia (with updates) is comprised of relevant statutory
provisions, CBP Regulations implementing the statute, portions of the Customs
Valuation Code, judicial precedent, and administrative rulings involving application of
valuation law. A copy may be purchased for a nominal charge from the Superintendent
of Documents, Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-
7054. This publication is also available on the Internet web site of U.S. Customs and
Border Protection.

The information provided in this publication is for general information
purposes only. Recognizing that many complicated factors may be
involved in customs issues, an importer may wish to obtain a ruling under
CBP Regulations, 19 C.F.R. Part 177, or obtain advice from an expert
(such as a licensed Customs Broker, attorney or consultant) who
specializes in customs matters. Reliance solely on the general
information in this pamphlet may not be considered reasonable care.

Additional information may also be obtained from U.S. Customs and Border Protection
ports of entry. Please consult your telephone directory for an office near you. The
listing will be found under U.S. Government, Department of Homeland Security.

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24

“Your Comments are Important”

The Small Business and Regulatory Enforcement Ombudsman and 10 regional
Fairness Boards were established to receive comments from small businesses about
Federal agency enforcement activities and rate each agency’s responsiveness to small
business. If you wish to comment on the enforcement actions of U.S. Customs and
Border Protection, call 1-888-REG-FAIR (1-888-734-3247).

REPORT SMUGGLING 1-800-BE-ALERT OR 1-888-NO-DROGA

Visit our Internet w
eb site: http://www.cbp.gov