June 11, 2008 CBP Bulletin Notice on Change in Condition of Liquid Fungicide
In the June 11, 2008 issue of the U.S. Customs and Border Protection Bulletin (Vol. 42, No. 25), CBP published a notice proposing to modify one ruling as follows:
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Proposed modification of ruling. CBP is proposing to modify a ruling (HQ 231152) on an imported liquid fungicide that has ingredients added in a foreign trade zone before export to Canada, with respect to NAFTA drawback within the meaning of 19 USC 3333(a), and for purposes of the NAFTA duty deferral limitation.
CBP states that any person who has received an interpretive ruling concerning identical merchandise should advise CBP by July 11, 2008, the date that written comments on the proposed ruling are due. Furthermore, CBP states that a ruling requestor's failure to advise CBP of pending ruling requests involving identical merchandise, may raise issues of reasonable care on the part of the ruling requestor or its agents in certain situations (see bulletin for details).
Liquid fungicide. The fungicide under consideration is Azoxystrobin Millbase concentrate - which is made up of water, a dispersant/surfactant, a preservative/antibacterial agent, an antifoaming agent and the active ingredient.
The concentrate is imported into the U.S. and admitted to a FTZ. Within the zone propylene glycol, a biocide, and bentonite (a stabilizer), are added. The fungicide is tested, packaged and labeled in the zone, then exported to Canada.
HQ 231152 determined that the added propylene glycol provided flowability and permitted the fungicide to be used in cold conditions, resulting in the exported fungicide not being in the same condition for purposes of NAFTA drawback under 19 USC 3333(a) and 19 CFR 181.45(b)(1), and not being eligible for unused merchandise drawback under 19 USC 1313(j)(1). The fungicide was also determined to be changed in condition for the purpose of applying the limitation on duty deferral imposed by NAFTA.
The ruling requester asked CBP to reconsider its determination because the purpose of the propylene glycol was to prevent freezing during transportation and storage rather than to permit use of the fungicide in cold conditions.
CBP is now proposing to issue HQ W231514 in order to modify HQ 231152 as HQ 231152 did not consider the effect of the other substances that were added along with the propylene glycol in the FTZ. The proposed ruling considers the effect of the additional substances, and clarifies the basis for the determination that the fungicide was changed in condition. However, CBP's conclusion remains the same.
Specifically, CBP proposes that the addition of the three ingredients to the liquid fungicide materially alters it by enabling the active ingredient to stay in suspension, so that crop spraying is easier, which is not mere dilution within the meaning of 19 CFR 181.45(b)(1).
Therefore, CBP is proposing that the imported concentrate is not in the same condition within the meaning of 19 USC 3333 and 19 CFR 181.45; and is changed in condition by the addition of the ingredients in the zone within the meaning of 19 USC 3333(a) and for purposes of the limitation on duty deferral imposed by NAFTA.
Accordingly, it is proposed that HQ 231152 be modified by HQ W231514.
June 11, 2008 CBP Bulletin (Vol. 42, No. 25) available athttp://www.cbp.gov/xp/cgov/trade/legal/bulletins_decisions/bulletins_2008/