For over a decade, CBP has ruled that raw nuts imported into Mexico or Canada, that were then roasted and blanched or salted, qualified for preferential tariff treatment under the NAFTA upon importation into the United States and permitted to be marked accordingly. But, pursuant to CBP’s recent decision, which takes effect May 9, 2016, the process of salting is no longer considered a qualifying process when determining NAFTA eligibility, modifying and revoking numerous rulings.
It has been long-standing practice for companies to ship various raw nuts classified under HTSUS Chapter 8, to Canada or Mexico where the nuts are then roasted and salted. After preparation the nuts were then classified under subheading 2008.19 which includes various types of prepared or preserved nuts. For years, the CBP has held that the change in tariff code as a result of the roasting and salting satisfied the tariff shift rule of GN 12. But according to the CBP’s new reasoning, GN 12(s)(ii), which provides exceptions for tariff classification rules, salting isn’t a qualifying process. GN 12(s)(ii) provides:
Fruit, nut and vegetable preparations of chapter 20 that have been prepared or preserved merely by freezing, by packing (including canning) in water, brine or natural juices, or by roasting, either dry or in oil (including processing incidental to freezing, packing, or roasting), shall be treated as an originated good only if the fresh good where wholly produced or obtained entirely in the territory of one or more NAFTA parties.
Based on this exception, the CBP held that the term “processing incidental to freezing, packing, or roasting,” includes the process of “salting.” Thus, non-originating nuts that are “merely roasted, or processed in a manner incidental to roasting,” which now includes salting, are no longer originating products. Instead, the origin of the nut preparations is determined by the origin of the nuts in the “fresh” or raw state.