OT:RR:CTF:FTM H317110 TJS
Mr. Phillip Allmendinger
Griesson-deBeukelaer GmbH & Co.
August-Horch-Strabe 23
Polch 56751
Germany
RE: Revocation of NY N303994; Tariff classification of a chocolate-covered cookie assortment from Germany
Dear Mr. Allmendinger:
This is in reference to New York Ruling Letter (“NY”) N303994, dated April 24, 2019, concerning the tariff classification of a chocolate-covered cookie assortment under the Harmonized Tariff Schedule of the United States (“HTSUS”). In that ruling, U.S. Customs and Border Protection (“CBP”) classified the cookie assortment at issue under subheading 1905.90.1050, HTSUS, which provides for “Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty capsules of a kind suitable for pharmaceutical use, sealing wafers, rice
paper and similar products: Other: Bread, pastry, cakes, biscuits and similar baked products, and puddings, whether or not containing chocolate, fruit, nuts or confectionery: Other: Pastries, cakes and similar sweet baked products; puddings.” Upon additional review, we have found the classification of this product under subheading 1905.90.1050, HTSUS, to be incorrect. For the reasons set forth below, we hereby revoke NY N303994.
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 (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on February 16, 2022, in Volume 56, Number 6, of the Customs Bulletin. No comments were received in response to this notice.
FACTS:
NY N303994 described the cookie assortment at issue as follows:
The product is a chocolate covered cookie assortment said to contain approximately 37 percent sugar, 21 percent wheat flour, 11 percent chocolate, 10 percent cocoa butter, 8 percent vegetable shortening, 5 percent skim milk, 2 percent butterfat, and 6 percent total including trace amounts of vegetable oils, butter, eggs, almonds, salt lemon, caramel, sugar, and citric acid among others. The assortment consists of fifteen different varieties of decorated chocolate covered cookies shaped in circles, squares, sticks and a heart. The product is said to be packaged for retail sale in tins printed and embossed as a seasonal item suitable for gifting, weighing 1 kilogram per tin, net packed.
According to the product information submitted with the ruling request, including a photo of the assortment, the cookies are organized by variety in a plastic tray with a plastic film in the tin box. The product information also describes three of the fifteen cookies as wafers with cream fillings. Specifically, the “Coca Wafer with Dark Chocolate” is described as a wafer with cocoa cream filling, covered with dark chocolate, and decor of milk chocolate. The “Cocoa Wafer with Milk Chocolate” is described as a wafer with cocoa cream filling, covered with milk chocolate, and decor of white chocolate. The “Dark Chocolate Cream Roll” is described as a wrapped crispy light brown wafer with brown filling and a rough surface. According to the product specification, the target water content in the finished product is 2% with a maximum of 4%.
ISSUE:
What is the tariff classification of the chocolate-covered cookie assortment?
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 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 GRI 2 through 6 may then be applied in order. GRI 6 provides that for legal purposes, classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes, and mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. GRI 6 thus incorporates GRIs 1 through 5 in classifying goods at the subheading level.
The HTSUS headings under consideration are as follows:
1905 Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty capsules of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products:
Sweet biscuits; waffles and wafers:
1905.31.00: Sweet biscuits…
1905.32.00 Waffles and wafers…
1905.90: Other:
1905.90.10: Bread, pastry, cakes, biscuits and similar baked products, and puddings, whether or not containing chocolate, fruit, nuts or confectionery…
* * *
GRI 3(a) and (b) provide as follows:
When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
The EN to heading 1905, HTSUS, provides in pertinent part as follows:
The heading includes the following products:
…
(8) Biscuits. These are usually made from flour and fat to which may have been added sugar or certain of the substances mentioned in Item (10) below. They are baked for a long time to improve the keeping qualities and are generally put up in closed packages. There are various types of biscuits including:
Plain biscuits containing little or no sweetening matter but a relatively high proportion of fat; this type includes cream crackers and water biscuits.
Sweet biscuits, which are fine bakers’ wares with long-keeping qualities and a base of flour, sugar or other sweetening matter and fat (these ingredients constituting at least 50% of the product by weight), whether or not containing added salt, almonds, hazelnuts, flavouring, chocolate, coffee, etc. The water content of the finished product must be 12 % or less by weight and the maximum fat content 35% by weight (fillings and coatings are not to be taken into consideration in determining these contents). Commercial biscuits are not usually filled, but they may sometimes contain a solid or other filling (sugar, vegetable fat, chocolate, etc.). They are almost always industrially manufactured products.
Savoury and salted biscuits, which usually have a low sucrose content.
(9) Waffles and wafers, which are light fine bakers’ wares baked between patterned metal plates. This category also includes thin waffle products, which may be rolled, waffles consisting of a tasty filling sandwiched between two or more layers of thin waffle pastry, and products made by extruding waffle dough through a special machine (ice cream cornets, for example). Waffles may also be chocolate covered. Wafers are products similar to waffles.
* * *
The EN to GRI 3(b) state in pertinent part:
(VI) This second method relates only to :
(i) Mixtures.
(ii) Composite goods consisting of different materials.
(iii) Composite goods consisting of different components.
(iv) Goods put up in sets for retail sales.
It applies only if Rule 3 (a) fails.
…
(IX) For the purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.
…
For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which:
consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;
consist of products or articles put up together to meet a particular need or carry out a specific activity; and
are put up in a manner suitable for sale directly to end users without repacking (e.g., in boxes or cases or on boards).
“Retail sale” does not include sales of products which are intended to be re-sold after further manufacture, preparation, repacking or incorporation with or into other goods.
The term “goods put up in sets for retail sale” therefore only covers sets consisting of goods which are intended to be sold to the end user where the individual goods are intended to be used together. For example, different foodstuffs intended to be used together in the preparation of a ready-to-eat dish or meal, packaged together and intended for consumption by the purchaser would be a “set put up for retail sale”.
…
The Rule does not, however, cover selections of products put up together and consisting, for example, of:
a can of shrimps (heading 16.05), a can of pâté de foie (heading 16.02), a can of cheese (heading 04.06), a can of sliced bacon (heading 16.02), and a can of cocktail sausages (heading 16.01); or
a bottle of spirits of heading 22.08 and a bottle of wine of heading 22.04.
In the case of these two examples and similar selections of products, each item is to be classified separately in its own appropriate heading…
* * *
In NY N303994, CBP classified the subject cookie assortment under subheading 1905.90.10, HTSUS, which provides, in pertinent part, for “Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa…: Other.” There is no dispute that the subject merchandise is classified in heading 1905, HTSUS. The present issue is resolved at the six-digit classification level. We note that the assortment contains both biscuits and wafers, which are classifiable in different subheadings. The wafers are classified under subheading 1905.32.00, HTSUS, which provides for “Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa…: Sweet biscuits; waffles and wafers: Waffles and wafers.” The term “biscuit” as used in the tariff refers to both the cookie, its sweetened form, and the cracker, its unsweetened form. See Headquarters Ruling Letter (“HQ”) 087386 (July 13, 1990). Subheading 1905.31.00, HTSUS, covers sweet biscuits and subheading 1905.90.10, HTSUS, covers crackers.
We find that the biscuits at issue meet the criteria of a sweet biscuit and are commonly recognizable as cookies. According to the EN to heading 1905, HTSUS, sweet biscuits must have (1) a base of flour, sugar or other sweetening matter, and fat, which altogether constitutes at least 50% of the product by weight; (2) water content 12% or less by weight; and (3) maximum fat content 35% by weight. Fillings and coatings are not taken into consideration when determining these contents. The biscuits are issue contain approximately 37% sugar, 21% wheat flour, 11% chocolate, 10% cocoa butter, 8% vegetable shortening, 5% skim milk, 2% butterfat, and trace amounts of other ingredients. The flour, sugar, and fat content of the cookies constitute over 50% of the product by weight, thereby meeting the first criteria. The biscuits also meet the second criteria since the water content of the finished product is at most 4%. Last, the total fat content, including the cocoa butter, shortening, and butterfat, is below the 35% threshold provided in the EN. Because the biscuits at issue meet the definition of sweet biscuits in the EN, they are classified as sweet biscuits in subheading 1905.31.00, HTSUS.
In considering the classification of the assortment containing sweet biscuits of subheading 1905.31.00 and wafers of subheading 1905.32.00, HTSUS, a GRI 3(b) analysis is appropriate as no single subheading describes all the products which are packaged and sold together. The assortment is not a mixture because the sweet biscuits and the wafers are not comingled in the package. Likewise, the assortment is not a composite good because the sweet biscuits and the wafers are not attached to each other to form a practically inseparable whole nor are they mutually complementary components that form a whole. The EN to GRI 3(b) provides that merchandise is a “set put up for retail sale” if it (1) is composed of at least two different articles which are, prima facie, classifiable in different headings; (2) contains products or articles put up together to meet a particular need or carry out a specific activity; and (3) is “put up in a manner suitable for sale directly to end users without repacking.” The EN further states that the rule does not cover certain selections of products put up together, and that each item in these selections is to be classified separately in its own appropriate heading or, by application of GRI 6, subheading. We find that the cookie assortment is a compartmentalized selection of discrete foods that does not meet the second requirement of a “set put up for retail sale” because the biscuits and wafers are not put up together to meet a particular need or carry out a specific activity. The biscuits and wafers individually carry out the activity of consuming a sweet treat and are not intended to be eaten in tandem. Rather, the assortment provides a selection from which consumers can choose a certain flavor among the biscuits or wafers. Therefore, the biscuit and wafer assortment does not qualify as a set under GRI 3(b) for classification purposes and will be classified separately in subheading 1905.31.00, HTSUS, and 1905.32.00, HTSUS, respectively.
This conclusion is consistent with NY N053826, dated March 13, 2009, which concerned the tariff classification of a cookie assortment similar to the one at issue. The product in that ruling was an assortment of various cookies consisting of baked biscuits, wafers, or filled wafers wholly or partially covered with dark, milk, or white chocolate, or a combination of two different chocolates. The cookies were packaged in plastic trays in a rectangular metal tin. CBP classified the biscuits in subheading 1905.31.00, HTSUS, and the wafers and filled wafers in subheading 1905.32.00, HTSUS.
In view of the foregoing, we find the biscuits in the cookie assortment are classified under subheading 1905.31.00, HTSUS, which provides for “Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty capsules of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products: Sweet biscuits; waffles and wafers: Sweet biscuits.” The wafers are classified under subheading 1905.32.00, HTSUS, which provides for “Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty capsules of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products: Sweet biscuits; waffles and wafers: Waffles and wafers.”
HOLDING:
Based on the information provided, by application of GRI 1 and 6, the biscuits in the cookie assortment are classified under subheading 1905.31.00, HTSUS, which provides for “Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty capsules of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products: Sweet biscuits; waffles and wafers: Sweet biscuits.” The wafers are classified under subheading 1905.32.00, HTSUS, which provides for “Bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty capsules of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products: Sweet biscuits; waffles and wafers: Waffles and wafers.” The 2022 column one, general rate of duty for both provisions is free.
EFFECT ON OTHER RULINGS:
NY N303994, dated April 24, 2019, is hereby REVOKED.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
For Craig T. Clark, Director
Commercial and Trade Facilitation Division