OT:RR:CTF:FTM H307101 MJD
Mr. Alan McKnight
Supervisory Import Specialist
U.S. Customs and Border Protection
1803 Eastport Drive
Tampa, FL 33605
RE: Internal Advice Request; Tariff Classification of Amaro Montenegro
Dear Mr. McKnight:
This is in response to the internal advice request, dated November 6, 2019, initiated by Total Logistics Resource, Inc. (“TLR”) on behalf of their client, E & J Gallo Winery (“Gallo”), and transmitted to our office on November 27, 2019, concerning the proper tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of Amaro Montenegro, an alcoholic beverage made in Italy.
FACTS:
On November 6, 2019, TLR on behalf of Gallo filed an internal advice request regarding the tariff classification of Amaro Montenegro. According to an ingredients’ breakdown of the product submitted by Gallo, Amaro Montenegro consists of a mixture of water, ethyl alcohol, sugar, caramel, and flavoring preparations and substances, containing approximately 40 botanicals. Some of these botanicals include: sweet & bitter oranges, petite dried oranges, coriander seeds, marjoram, oregano, Artemisia blend, cinnamon, cloves, and nutmeg. Based on the information provided, 1 liter of Amaro Montenegro contains 16.51 percent of sugar by weight of the finished product.
According to the Amaro Montenegro website, the alcohol beverage is created by three main processes: boiling, maceration, and distillation. The process begins by boiling chopped botanicals that are mixed together in water for a specific amount of time. Then select botanicals are developed into extracts through maceration in an aqueous-alcoholic solution for 20 to 30 days. Next, carefully chosen botanicals go through a distillation process. At the end of this process, 12 essential extracts or 12 essences are created. The 12 essences are then blended together to form 6 aromatic notes. Sugar, water, and alcohol are then added to the 6 notes. At the end of the process, a single drop of the seventh and final tasting note is added to the bottle. The final note is called Il Premio and is the result of micro-distillation of five unique botanicals.
Gallo has previously imported Amaro Montenegro as a liqueur under subheading 2208.70.0030, HTSUSA (Annotated), which provides for “Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages: Liqueurs and cordials: In containers each holding not over 4 liters.” However, after consulting EU guidance and discovering that “a bitter is defined by its predominate bitter taste,” Gallo now believes that Amaro Montenegro should be classified as a bitter under 2208.90.1000, HTSUSA, which provides for “Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages: Other: Bitters: Fit for use as beverages.” Gallo argues that Amaro Montenegro is more bitter than it is sweet, and “the flavoring substances are predominately of a bitter type.” Furthermore, Gallo claims that while bitters are a type of a liqueur, it is more specific to classify Amaro Montenegro as a bitter under subheading, 2208.90.1000, HTSUSA, than a liqueur under subheading, 2208.70.0030, HTSUSA.
ISSUE:
Whether the Amaro Montenegro under consideration is classified as a liqueur under subheading 2208.70.00, HTSUS, or as a bitter under subheading 2208.90.10, HTSUS.
LAW AND ANALYSIS:
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule 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 2 through 6 may then be applied in order.
The 2020 HTSUS provisions under consideration are as follows:
2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages:
* * *
2208.70.00 Liqueurs and cordials…
2208.70.0030 In containers each holding not over 4 liters…
* * *
2208.90 Other:
* * *
Bitters:
* * *
2208.90.1000 Fit for use as beverages…
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 ENs for heading 22.08, HTSUS, states, in pertinent part:
The heading covers, whatever their alcoholic strength:
…
Liqueurs and cordials, being spirituous beverages to which sugar, honey or other natural sweeteners and extracts or essences have been added (e.g., spirituous beverages produced by distilling, or by mixing, ethyl alcohol or distilled spirits, with one or more of the following: fruits, flowers or other parts of plants, extracts, essences, essential oils or juices, whether or not concentrated). These products also include liqueurs and cordials containing sugar crystals, fruit juice liqueurs, egg liqueurs, herb liqueurs, berry liqueurs, spice liqueurs, tea liqueurs, chocolate liqueurs, milk liqueurs and honey liqueurs.
All other spirituous beverages not falling in any preceding heading of this Chapter.
In addition to undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol, the heading includes, inter alia:
…
(13) Alcoholic aperitives (absinth, bitters, etc.) other than those with a basis of wine of fresh grapes which fall in heading 22.05.
In the instant case, there is no disagreement that Amaro Montenegro is a product classified under heading 2208, HTSUS. The issue is at the six-digit level and concerns whether Amaro Montenegro is classified as a bitter instead of a liqueur. Gallo argues that by application of GRI 3(a) bitters, fit for use in beverages in subheading 2208.90.1000, HTSUSA, is a more specific description of the Amaro Montenegro product than “liqueurs and cordials” in subheading 2208.70.00, HTSUS.
While not binding on CBP, Title 27 (Alcohol, Tobacco Products and Firearms) of the Code of Federal Regulations, administered by the Alcohol and Tobacco and Tax and Trade Bureau of the United States Department of the Treasury, provide product specifications for cordials and liqueurs. See 27 C.F.R. § 5.22(h). The industry standards of identity for cordials and liqueurs provided in 27 C.F.R. § 5.22(h), are the following:
Cordials and liqueurs are products obtained by mixing or redistilling distilled spirits with or over fruits, flowers, plants, or pure juices therefrom, or other natural flavoring materials, or with extracts derived from infusions, percolation, or maceration of such materials, and containing sugar, dextrose, or levulose, or a combination thereof, in an amount not less than 2 ½ percent by weight of the finished product.
In this case, Amaro Montenegro’s ingredients and method of production that includes a combination of maceration, distillation, and boiling are aligned with the description and requirements for a liqueur. The ENs for heading 22.08, provide that for a spirituous beverage to be considered a liqueur, sweetener and essences or extracts must be added to the beverage. Here 12 essences are created by boiling 40 botanicals, then macerating select botanicals in ethyl alcohol, and distilling certain botanicals. There are 40 botanicals in total that make up the Amaro Montenegro, some of them include fruits such as sweet and bitter oranges, and petite dried oranges; and parts of plants such as nutmeg, clove, cinnamon, Artemisia blend, oregano, marjoram, and coriander seed. Furthermore, the product contains 16.51 percent by weight of sugar which is over the 2.5 percent by weight of sugar requirement for a product to be identified as a liqueur, in accordance with 27 C.F.R. § 5.22(h). Therefore, the combination of sugar, ethyl alcohol, and the botanicals that are transformed into 12 essences through boiling, distillation, and maceration, make Amaro Montenegro a liqueur, and not a bitter.
Based on the foregoing, we find that pursuant to GRI 1 and 6, the subject Amaro Montenegro is classified as a “liqueur” under subheading 2208.70.00, HTSUS, which provides for “Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages: Liqueurs and cordials.”
HOLDING:
By application of GRI 1 and 6, we find that Amaro Montenegro is properly classified under subheading 2208.70.00, HTSUS. Specifically, it is classified under subheading 2208.70.0030, HTSUSA, which provides for “Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent vol.; spirits, liqueurs and other spirituous beverages: Liqueurs and cordials: In containers each holding not over 4 liters.” The 2020 column one, general rate of duty is free.
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/.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Chief
Food, Textiles and Marking Branch
Cc: Ms. Dianna Davis
Supervisory Import Specialist
U.S. Customs and Border Protection
1100 Raymond Blvd.
Newark, NJ 07102