CLA-2 CO:R:C:F 951741 ALS
2005.90.9500
Mr. Dennis Kovler
Import Manager
Mitsui Foods, Inc.
P. O. Box 825
Hackensack, New Jersey 07602
RE: Vegetables - Pepperoncini, Giardinera, and Olives in
Preservative Solution
Dear Mr. Kovler:
This is in reference to your letter of April 29, 1992,
regarding certain vegetables, the products of Spain, which are
processed and repackaged in Canada. Since your original letter
which was faxed to us was partially illegible, we requested a clear
copy of your inquiry. Your response was received on May 7, 1992.
FACTS:
The products under consideration are pepperoncini, giardinera,
and olives which are grown in Spain, shipped to Canada in 55 gallon
drums and then processed and repackaged. The products are stated
to be inedible at the time of importation into Canada. The
pepperoncini, small whole green peppers, arrives in Canada in a
liquid solution composed of water, salt (10-12 percent), vinegar
(.5 - 1 percent acetic acid), and sulfur dioxide (500 - 1000ppm).
In Canada, the peppers are washed in cold water for approximately
12 hours, and repackaged in plastic pouches in a new, hot brine,
composed of water, salt (4.4 per- cent), vinegar (4 percent acetic
acid), and preservative.
- 2 -
The Giardinera, mixture of vegetables, at the time of
importation into Canada, is in a brine composed of water, salt (4-
6 percent), vinegar (.2 - 1 percent acetic acid), and sulfur
dioxide (400-1000ppm). In Canada, the mixed vegetables are drained
and washed in cold water until completely desalted, and packed in
plastic pouches in a hot brine composed of salt (6.1 percent),
vinegar (3.4 percent acetic acid), and preservative.
The olives (sliced and/or broken green olives) are imported
into Canada in 55-gallon drums in a brine or water and salt (7-9
percent). In Canada, the olives are drained, washed with cold
water, and repackaged in plastic pouches in a hot brine consisting
of water, salt (8 percent), lactic acid (.8 percent), and
preservative.
The repackaged products, which are ready for consumption and
are sold to food service customers such as restaurants and pizza
shops, have been prepared in such a manner as to assure a
relatively long shelf life.
ISSUE:
1. How are the vegetables classified?
2. Are the products eligible for special treatment pursuant
to the U.S. - Canada Free Trade Agreement (CFTA)?
LAW AND ANALYSIS:
Classification of merchandise under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) is governed by
the General Rules of Interpretation (GRI's) taken in order.
GRI 1 provides that the classification is determined first in
accordance with the terms of the headings and any relative section
and chapter notes. If GRI 1 fails to classify the goods and if the
heading and legal notes do not otherwise require, the remaining
GRI's are applied, taken in order.
In order to classify the products under consideration we must
first determine whether they are prepared or preserved and, if so,
the method by which that condition was accomplished.
In this regard we noted that the pepperoncini and giardinera, in
their condition as imported into the United States are in a
solution of water, salt, vinegar and preservative. We also noted
that the olives, at the time of importation into the United States,
are in a solution of water, salt, lactic acid and - 3 -
preservative. Accordingly, the vegetables are prepared or
preserved at the time of such importation.
We next considered the classification of the prepared or
preserved vegetables. We noted that classification in either
Chapter 7, HTSUSA, which includes edible vegetables, etc., and
Chapter 20, which includes preparations of vegetables, depends on
the method used to accomplish such preparation or preservation.
Legal Note 1(a) to Chapter 20, HTSUSA, specifies, as hereto
pertinent, that vegetables prepared or preserved by the processing
specified Chapter 7, HTSUSA, are not covered by the provisions of
Chapter 20. We reviewed the various provisions of Chapter 7 as to
the preparation or preservation procedures therein. Those
provisions generally describe vegetables which are fresh, chilled,
steamed or dried, but make no reference to the procedures utilized
as to the subject vegetables. Reference is also made therein to
vegetables provisionally preserved and unsuitable for immediate
consumption.
In considering whether these vegetables would be considered
as provisionally preserved we consulted the Explanatory Notes (EN)
to the Harmonized System which represent the opinion of the tariff
classification experts at the international level. The relative
explanatory note (EN 07.11) specifies that vegetables which have
been treated solely to ensure their provisional preservation during
transport or storage prior to use are includable in heading 0711
of the Harmonized Tariff System provided they remain unsuitable for
immediate consumption in that state. The EN excludes items which,
in addition to having been provisionally preserved in brine, have
also been specially treated (e.g., by soda solution, by lactic
fermentation).
Although the information provided with the ruling request does
not specify whether the products have been specially treated as
previously discussed, we believe that the products have been so
treated. Virtually all green Spanish olives are de-bittered by
treatment with soda solution (lye) immediately after harvest, and
subsequently immersed in salt brine, where lactic fermentation
proceeds. This occurs prior to pitting and slicing.
The other products under consideration are the type of
vegetables one might find on a vegetable condiment tray. This
suggests that these products have undergone a fermentation process
prior to placement in barrels of brine.
- 4 -
Accordingly, since all the vegetables have been specially
treated in addition to being preserved in brine, the subject
vegetables would not be classifiable in Chapter 7. They are
classifiable in Chapter 20.
The vegetables, if considered to be prepared or preserved by
vinegar or acetic acid, would be classifiable in heading 2001 and,
if prepared or preserved by other than vinegar or acetic acid,
would be classifiable in heading 2005.
It has been Customs practice to regard a product as prepared
or preserved by vinegar or acetic acid when the acetic acid content
in the equilibrated product is equal to or exceeds .5 percent, as
determined by laboratory analysis. (See Headquarters Ruling Letter
(HRL) 085838, dated December 21, 1989, and
HRL 069121, dated May 20, 1983.)
If the samples of pepperoncini and giardinera are found to
contain a vinegar or acetic acid of .5 percent or more, they would
be classified in subheading 2001.90.3900, HTSUSA, as other
vegetables prepared or preserved by vinegar or acetic acid. Since
giardinera, a mixture of vegetables, is not specifically described
by one of the named vegetables and since none of the vegetables in
the relative subheading form the essential character of the
mixture, giardinera is classifiable under the provision for "other
vegetables, other".
If laboratory analysis indicates that the acetic acid content
is less than .5 percent, the pepperoncini would be classified in
subheading 2005.90.5510, HTSUSA, which provides for other
vegetables prepared or preserved otherwise than by vinegar or
acetic acid, not frozen...other vegetables...fruits of the genus
Capsicum (peppers)...other...sweet bell-type peppers. The
giardinera, with less than .5 percent acetic acid, would be
classified in subheading 2005.90.9500, HTSUSA, which provides for
other vegetables prepared or preserved otherwise than by vinegar
or acetic acid...mixtures of vegetables...other. (See New York
Ruling Letter (NYRL) 862378).
We next considered whether the subject vegetables would
qualify for special treatment under the provisions of the U. S. -
Canada Free Trade Agreement (CFTA). In accordance with General
Note 3(c)(vii)(B), HTSUSA, articles which are not wholly obtained
or produced in the territory of Canada and/or the United States
must be transformed in Canada and/or the United States in
accordance with the provisions of General Note 3(c)(vii)(R). - 5 -
Section IV thereof, which covers Chapters 16 through 24 of the
HTSUSA, as hereto pertinent, specifies in rule (aa) that there must
have been a tariff classification change from one chapter to
another, except for goods of chapter 20 subject to rule (ee), for
merchandise to be eligible for special CFTA treatment. The
referenced rule (ee) specifies that fruit, nut, and vegetable
preparations of chapter 20 preserved in various ways, including
packing in water, brine, etc., "shall be treated as a good of the
country in which the fresh good was produced." In view of the
foregoing, we do not believe that the vegetables under
consideration meet the requirements for special treatment under
the CFTA.
HOLDING:
Pepperoncini and Giardinera (vegetables) grown in Spain and
repackaged in Canada in plastic pouches in hot brine composed of
various percentages of water, salt, vinegar and preservative are
classifiable in subheading 2001.90.3900, HTSUSA, if the acetic acid
level of the products equals or exceeds .5 percent based on
laboratory analysis. They would be subject to a general rate of
duty of 12 percent ad valorem.
Pepperoncini, as noted above, is classifiable in subheading
2005.90.5510, HTSUSA, if the acetic acid content, as determined by
laboratory analysis, is less that .5 percent. The general rate of
duty for pepperoncini so classified is 17.5 percent ad valorem.
Giardinera, as noted above, is classifiable in subheading
2005.90.9500, HTSUSA, if the acetic acid content, as determined by
laboratory analysis, is less than .5 percent. The general rate of
duty for giardinera so classified is 17.5 percent ad valorem.
Olives grown in Spain and repackaged in Canada in plastic
pouches in a hot brine composed of water, salt, lactic acid and
preservative is classifiable in subheading 2005.70.2560, HTSUSA,
if green in color and broken and/or sliced, and if in containers
holding 8 kg. or less, drained weight. The general rate of duty
for olives so classified is 10.8 cents/kg. on the drained weight.
Vegetables grown in Spain, packaged in a preservative solution
in large containers which are repackaged in Canada in a - 6 -
new preservative solution and smaller containers, do not meet the
requirements of General Note 3(c)(vii)(R)(4)(aa) or (ee) and are
not eligible for special treatment under the U.S. - Canada Free
Trade Agreement.
Sincerely,
John Durant, Director
Commercial Rulings Division