CLA-2 OT:RR:CTF:TCM H116109 NCD
Mark DuBois
Product Safety Manager
Reichhold, Inc.
P.O. Box 13582
Research Triangle Park
North Carolina 27709
RE: Revocation of NY N051856; classification of Dion® 9100
Dear Mr. DuBois:
This letter is in reference to the electronic request, filed June 28, 2010 on behalf of Reichhold, Inc. (“Reichhold”), for reconsideration of New York Ruling Letter (NY) N051856, dated February 23, 2009. NY N051856 was issued to Reichhold by U.S. Customs and Border Protection (CBP) in response to Reichhold’s February 11, 2009 request for a ruling as to the proper classification of the Dion® 9100 under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed NY N051856, have determined that it is incorrect, and, for the reasons set forth below, are revoking that ruling.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice of the proposed action was published in the Customs Bulletin, Vol. 50, No. 18, on May 4, 2016. No comments were received in response to the notice.
FACTS:
In NY N051856, CBP stated as follows with regard to Reichhold’s original ruling request and the merchandise at issue:
Dion 9100 is described as an unsaturated polyester resin manufactured from epoxy resin, bisphenol A and methacrylic acid. The resin will be imported in the form of a liquid prepolymer as a 60-70% solution in styrene for use in building fiberglass reinforced tanks, pipes and other plastic parts.
Based upon the provided description, CBP classified the Dion® 9100 in subheading 3907.91.50, HTSUS, which provides for “Polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms: Other polyesters: Unsaturated.”
On June 10, 2010, prior to filing the instant reconsideration request, Reichhold submitted to CBP a series of diagrams depicting the chemical synthesis by which the Dion® 9100 is manufactured (see figures 1 and 2 below). The diagrams were forwarded to CBP’s Laboratories and Scientific Services Directorate (LSSD) for technical analysis. LSSD provided the following description of the diagrams:
The structure forwarded to our office shows a molecule with epoxide terminating units and a repeating internal structure (between 3 and 10 functionalized repeating units) that is reacted with methacrylate to form the final product with vinyl ester terminating units. Information on this product notes it is a “Bisphenol-A epoxide based vinyl ester resin…’
Upon additional review of the diagrams, LSSD noted with respect to the Dion® 9100 in its final state:
Since between three and ten ether-function monomer units are present, versus the two terminating carboxylic ester units, the polyether units predominate…the chemical in question is obtained from an epoxide (epoxide-terminating groups are found in the chemical prior to reacting with methracrylate, as previously noted) and ether-functional groups are readily visible in the polymer chain.
Figure 1
Figure 2
ISSUE:
Whether the Dion® 9100 is properly classified as an “other polyether” of subheading 3907.20.00, HTSUS, as an “epoxide resin” of subheading 3907.30.00, HTSUS, or as an “unsaturated polyester resin” of subheading 3907.91.50, HTSUS.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
3907 Polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms:
3907.20.00 Other polyethers
3907.30.00 Epoxide resins
Other polyesters:
3907.91 Unsaturated:
3907.91.50 Other
As an initial matter, we consider whether Dion® 9100 is properly classified in heading 3907, HTSUS, which describes, inter alia, epoxide resins, “other” polyethers, and “other” polyesters in primary forms. Interpretation of heading 3907 is governed by Note 3 to Chapter 39, which states, in relevant part, as follows:
Headings 39.01 to 39.11 apply only to goods of a kind produced by chemical synthesis, falling in the following categories…
(c) Other synthetic polymers with an average of at least 5 monomer units….
With respect to “chemically modified” polymers, Note 5 to Chapter 39 states as follows:
Chemically modified polymers, that is those in which only appendages to the main polymer chain have been changed by chemical reaction, are to be classified in the heading appropriate to the unmodified polymer. This provision does not apply to graft copolymers.
While a definition of ”polymer” is absent from the HTSUS, the General EN to Chapter 39 describes “polymers” within the meaning of Notes 4 and 5 to Chapter 39 as “molecules which are characterised by the repetition of one or more types of monomer units.” See also Richard J. Lewis, Sr., Hawley’s Condensed Chemical Dictionary 1013 (15th ed. 2007) (defining “polymer” as “a macromolecule formed by the chemical union of five or more identical combining units called monomers”) [hereinafter Hawley’s] . As to the specific types of polymers classifiable in heading 3907, EN 39.07 provides as follows:
This heading covers:
***
Other polyethers. Polymers obtained from epoxides, glycols or similar materials and characterised by the presence of ether-functions in the polymer chain. They are not to be confused with the polyvinyl ethers of heading 39.05, in which the ether-functions are substituents on the polymer chain. The most important members of this group are poly(oxyethylene) (polyethylene glycol), polyoxypropylene and polyphenylene oxide (PPO) (more correctly named poly(dimethylphenylene-oxide)). These products have a variety of uses, PPO being used, like the polyacetals, as engineering plastics, polyoxypropylene as an intermediate for polyurethane foam…
Epoxide resins. Polymers made, for example, by condensing epichlorohydrin (1-chloro-2,3-epoxypropane) with bisphenol A (4,4’-isopropylidenediphenol), novolak (phenolic) resins or other polyhydroxy compounds or by epoxidising unsaturated polymers. Whatever the basic structure of the polymer, these resins are characterised by the presence of reactive epoxide groups which allow them to be readily cross-linked at the time of use, e.g. by the addition of an amino compound, an organic acid or anhydride, a boron trifluoride complex or an organic polymer…
***
These polymers are characterised by the presence of carboxylic ester functions in the polymer chain and are obtained, for example, by condensation of a polyhydric alcohol and a polycarboxylic acid…
The diagram provided by Reichhold indicates that the Dion® 9100 contains between three and ten repeating ether-function units as its sole repeating monomer unit. The Dion® 9100 can consequently be described as a polymer of ether-function units. EN 39.07 instructs that polymers characterized by the presence of ether functions in the polymer chain are to be described as “other polyethers” for purposes of classification in heading 3907. Moreover, EN 39.07 describes such “other polyethers” as having been obtained from epoxides. In this case, epoxides form the reactive terminating units of the polymer chain with which the methacrylate is reacted to produce the Dion® 9100. In effect, by operation of Note 3 to Chapter 39, and consistent with the General EN to Chapter 39 and EN 39.07, the Dion® 9100 is properly classified as “other polyethers” in heading 3907.
As to the proper classification of the Dion® 9100 at the subheading level, Subheading Note 1 to Chapter 39 states, in pertinent part, as follows:
Within any one heading of this chapter, polymers (including copolymers) are to be classified according to the following provisions…
Where there is no subheading named "Other" in the same series:
Polymers are to be classified in the subheading covering polymers of that monomer unit which predominates by weight over every other single comonomer unit. For this purpose, constituent monomer units of polymers falling in the same subheading shall be taken together. Only the constituent comonomer units of the polymers in the series under consideration are to be compared.
Chemically modified polymers are to be classified in the subheading appropriate to the unmodified polymer.
The EN to Subheading Note 1 expounds on the note as follows:
A subheading named “Other” does not include subheadings such as “Other polyesters” and “Of other plastics”.
The expression “in the same series” applies to subheadings of the same level, namely, one-dash subheadings (level 1) or two-dash subheadings (level 2) (see the Explanatory Note to General Interpretative Rule 6).
In the instant case, the series in which the subheadings under consideration fall contains the subheading “other polyethers” but is devoid of any subheading entitled simply “Other.” Therefore, Subheading Note 1(b) governs classification of the Dion® 9100 at the subheading level. As described above, the structure representing Dion® 9100 contains between three and ten ether-function units as its sole repeating monomer units. By contrast, it does not contain a single repetition of the reactive epoxide units, let alone five such repetitions, or any carboxylic acid esters whatsoever. See EN 39.07. By logical necessity, then, the ether units predominate by weight for purposes of Subheading Note 1(b)(1), to the effect that the Dion® 9100 must be classified in the subheading covering the ether units’ composite polymer. Again, polymers consisting of ether-functions are described as “other polyethers” for tariff classification purposes, particularly where, as here, they originate from epoxides. Therefore, the Dion® 9100 is properly classified in subheading 3907.20.00.
We have also considered whether the Dion® 9100 is classifiable in subheading 3907.30.00. To this end, we note that Subheading Note 1(b)(2) to Chapter 39 requires classification of chemically modified polymers in the subheading appropriate to the unmodified polymer, and Note 5 defines “chemically modified polymers” as “those in which only appendages to the main polymer chain have been changed by chemical reaction.” However, while the unreacted polymer chain depicted in Figure 1 is labelled “epoxy resin,” it actually lacks the repeating epoxide monomer units required for description as such. See EN 39.07; Hawley’s at 507 (noting in defining “epoxy resins” that “[t]he reactive epoxies form a tight, cross-linked polymer network…”). In its unmodified state, just as in its reacted state, the Dion® 9100 is in fact a polymer of ether-function units. Therefore, it cannot be classified in subheading 3907.30.00.
HOLDING:
By application of GRIs 1 and 6, the Dion® 9100 is properly classified in heading 3907, HTSUS, specifically in subheading 3907.20.0000, HTSUSA (Annotated), which provides for: “Polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms: Other polyethers.” The 2015 column one general rate of duty is 6.1% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
New York Ruling Letter N051856, dated February 23, 2009, is hereby REVOKED in accordance with the above analysis.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division