August 6, 2008 CBP Bulletin Notice on Change in Condition of Liquid Fungicide
In the August 6, 2008 issue of the U.S. Customs and Border Protection Bulletin (CBP Bulletin) (Vol. 42, No. 33), CBP published a notice modifying a classification ruling and a treatment as follows:
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Modification of ruling, revocation of treatment.CBP is modifying a ruling on imported liquid fungicide that has ingredients added in a 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. This notice also covers any rulings on this merchandise which may exist but have not been specifically identified. In addition, CBP is revoking any treatment it has previously accorded to substantially identical transactions.
According to CBP, these actions are effective for merchandise entered or withdrawn from warehouse for consumption on or after October 5, 2008.
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 foreign trade zone. 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, and being ineligible for unused merchandise drawback under 19 USC 1313(j)(1). The merchandise was also determined to be changed in condition for purposes of the limitation on duty deferral imposed by NAFTA.
The ruling requester asked CBP to reconsider its determination because they assert 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 issuing HQ W231514 in order to modify HQ 231152. HQ 231152 did not consider the effect of the other substances that were added along with the propylene glycol in the FTZ. The new ruling reflects consideration of the effect of the additional substances, and clarifies the basis for the determination that the fungicide was changed in condition. CBP's conclusion remains the same.
Specifically, CBP asserts 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 determines 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, HQ 231152 is modified by HQ W231514.
(See ITT's Online Archives or 06/27/08 news, 08062755, for BP summary of proposed HQ W231514.)
August 6, 2008 CBP Bulletin (Vol. 42, No. 33) available at http://www.cbp.gov/xp/cgov/trade/legal/bulletins_decisions/bulletins_2008/