CLA-2 OT: RR: CTF: TCM H192517 TNA
John M. Peterson
Neville Peterson LLP
17 State Street, 19th Floor
New York, NY 10004
RE: Revocation of New York Ruling N144035; Classification of Thermal Conductive Greases
Dear Mr. Peterson:
This is in response to your letter dated October 21, 2011, on behalf of Shin-Etsu MicroSi, Inc. for reconsideration of New York Ruling Letter (“NY”) N144035 dated April 28, 2011, regarding the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of thermal conductive greases under subheading 3824.90.28, HTSUS. We have reviewed NY N144035 and, based on new information provided by the importer and supplemental laboratory reports received from U.S. Customs & Border Protection’s (“CBP’s”) laboratory, determined that it is incorrect.
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 proposing to revoke NY N144035 was published in the Customs Bulletin, Vol. 48, No. 29, on July 23, 2014. One comment was received in support of the revocation.
FACTS:
The subject merchandise consists of five types of thermal conductive greases. These products, identified as X23-7783D, G751, X23-7756, X23-7762, and G765, are imported in the form of organopolysiloxane paste containing aluminum and zinc oxide, together with trade secret ingredients. They are used as thermally conductive pastes in the manufacture of electronic products, such as printed circuit boards and other board-level products for which thermal dissipation is an important feature. They aid in thermal dissipation via a heat sink. They are imported in bulk and either repackaged and sold in bulk, or repackaged into syringes.
In an initial round of laboratory reports, the laboratory found that X-237783D, G-765, G751, and X23-7762 were thermal conductive greases composed of more than five percent of a proprietary chemical that was an aromatic compound. The first round of laboratory reports concluded that X23-7756 was composed of less than one percent of a proprietary chemical that was an aromatic compound. As a result, the laboratory concluded that classification in subheading 3824.90.70, HTSUS, was appropriate for this product.
In NY N144035, on the basis of laboratory reports that focused on the amount of aromatics in the material, CBP classified these substances under subheading 3824.90.28, HTSUS, as “[p]repared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: [o]ther: [o]ther: [m]ixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: [o]ther.”
Shin-Etsu is requesting reconsideration of this classification based on evidence that the subject merchandise contains less that 5% by weight of aromatic compounds. In support of this contention, the company submitted a more detailed breakdown of the subject merchandise’s ingredients and their percentages than had been submitted for NY N144035. As such, Shin-Etsu argues that these products should be classified under subheading 3824.90.70, HTSUS, as other materials for printed circuit boards, plastics and metal finishings.
A round of supplemental laboratory reports were issued based on the new information submitted by the importer found that all five of the subject products were silicone in primary form.
ISSUE:
Whether the subject thermal conductive greases are classified under subheading 3824.90.28, HTSUS, as “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other: Other,” in subheading 3824.90.70, HTSUS, as “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other: Other: Other: Mixtures of dibromo neopentyl glycol; Polydibromophenylene oxide; Tetrabromobisphenol-A-carbonate oligomers; and Electroplating chemical and electroless plating solutions and other materials for printed circuit boards, plastics and metal finishings, or in subheading 3910.00.00, HTSUS, as “Silicones in primary forms”?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings and any relative section or chapter notes.” In the event that the goods cannot be classified solely on the basis of GRI 1 and if the headings and legal notes do not otherwise require, the remaining GRIs may be applied in order.
The HTSUS headings under consideration in this case are as follows:
3824 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included:
3824.90 Other:
Other:
Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances:
3824.90.28 Other
Other:
3824.90.70 Mixtures of dibromo neopentyl glycol; Polydibromophenylene oxide; Tetrabromobisphenol-A-carbonate oligomers; and Electroplating chemical and electroless plating solutions and other materials for printed circuit boards, plastics and metal finishings
3910.00.00 Silicones in primary forms
Note 3 to Chapter 39, HTSUS, states the following:
Headings 3901 to 3911 apply only to goods of a kind produced by chemical synthesis, falling in the following categories: …
(d) Silicones (heading 3910)
Note 6 to Chapter 39, HTSUS, states the following:
In headings 3901 to 3914, the expression “primary forms” applies only to the following forms:
(a) Liquids and pastes, including dispersions (emulsions and suspensions) and solutions;
(b) Blocks of irregular shape, lumps, powders (including molding powders), granules, flakes and similar bulk forms.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the Harmonized System at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The ENs to heading 3824, HTSUS, states, in pertinent part, the following:
This heading covers:…
(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS
With only three exceptions (see paragraphs (7), (19) and (32) below), this heading does not apply to separate chemically defined elements or compounds.
The chemical products classified here are therefore products whose composition is not chemically defined, whether they are obtained as by-products of the manufacture of other substances (this applies, for example, to naphthenic acids) or prepared directly.
The chemical or other preparations are either mixtures (of which emulsions and dispersions are special forms) or occasionally solutions. Aqueous solutions of the chemical products of Chapter 28 or 29 remain classified within those Chapters, but solutions of these products in solvents other than water are, apart from a few exceptions, excluded therefrom and accordingly fall to be treated as preparations of this heading.
The preparations classified here may be either wholly or partly of chemical products (this is generally the case) or wholly of natural constituents (see, for example, paragraph (24) below).
The ENs to heading 3910, HTSUS, states, in pertinent part, the following:
The silicones of this heading are non-chemically defined products containing in the molecule more than one silicon-oxygen-silicon linkage, and containing organic groups connected to the silicon atoms by direct silicon-carbon bonds.
They have a high stability and may be either liquid, semi-liquid, or solid. The products include silicone oils, greases, resins and elastomers.
(1) Silicone oils and greases are used as lubricants remaining stable at high or low temperatures, as water-repellent impregnating products, as dielectric products, as foam inhibitors, as mould release agents, etc. Lubricating preparations consisting of mixtures containing silicone greases or oils fall in heading 27.10 or 34.03 as the case may be (see corresponding Explanatory Notes).
In NY N144035, CBP based its classification of X23-7783D, G751, X23-7762 and G765 on the fact that they contained an aromatic compound that was greater than 5% by weight of each of the four thermal grease products. However, in this request for reconsideration, the importer states in their March 23, 2012, memorandum, that there was an error in adequately communicating to CBP that the component labeled “Trade Secret 1” was not one chemical compound but a mixture of several compounds. In this request for reconsideration, the importer has provided the complete breakdown of the individual chemical compounds in the “product Trade Secret 1” compound.
Heading 3910 provides for silicone in primary form. The heading applies to silicones of a kind produced by chemical synthesis. See heading 3910, HTSUS; Note 3 to Chapter 39, HTSUS. For purposes of this heading, the term “primary form” covers pastes, including dispersions (emulsions and suspensions). See Note 6 to Chapter 39, HTSUS. Furthermore, the products of heading 3910, HTSUS, include silicone greases that remain stable at a high temperature. The heading also specifically includes silicone greases used as dielectric products. See EN 39.10.
In the present case, CBP’s laboratory’s analysis based on the complete breakdown of the subject merchandise that was submitted with the request for reconsideration shows that these products consist of organopolysiloxane paste with aluminum and zinc oxide. Therefore, the instant products are silicone in primary form. Furthermore, these products are silicone greases that are used for their stability at high temperatures, so as to whisk away the heat produced by the electric merchandise with which they are used. This is consistent with the description of the products in the explanatory notes to heading 3910, HTSUS. Classification in heading 3910, HTSUS, is also consistent with prior CBP rulings. See, e.g., NY G86540, dated April 2, 2001; NY 880713, dated December 16, 1992.
Heading 3824, HTSUS, is a basket provision. As such, if the subject merchandise can be more specifically classified elsewhere in the tariff, it is precluded from classification in heading 3824, HTSUS, even if it meets the terms of the heading. See, e.g., HQ 963688, dated February 4, 2000; HQ 967972, dated March 2, 2006. Pursuant to the analysis above, the subject merchandise is described by heading 3910, HTSUS. As a result, it cannot be classified in heading 3824, HTSUS.
HOLDING:
By application of GRI 1, the subject X23-7762, X23-7783D, G765, G751, and X23-7756 are classified under heading 3910, HTSUS. They are specifically provided for in subheading 3910.00.00, HTSUS, which provides for “silicones in primary form.” The column one rate of duty is 3%.
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 World Wide Web at www.usitc.gov/tata/hts/.
EFFECTS ON OTHER RULINGS:
NY N144035, dated April 28, 2011, is REVOKED.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division