CLA-2 OT:RR:CTF:TCM H257206 CkG
TARIFF NO: 3824.90.92
Port Director
U.S. Customs and Border Protection
Port of Savannah
1 East Bay Street
Savannah, GA 31401
ATTN: Katie Lynch, Import Specialist
Re: Application for Further Review of Protest No. 1703-14-100208; classification of Zinc Oxide
Dear Port Director,
This is in reply to the Application for Further Review (AFR) of Protest No. 1703-14-100208, dated July 30, 2014, on behalf of Pirelli Tire, LLC (“Protestant”), contesting U.S. Customs and Border Protection’s (CBP) classification and liquidation of six entries of PreMix ZnO Red 80% in heading 3824, HTSUS.
The subject entries were made between January 31, 2013, and September 27, 2013. The PreMix ZnO Red 80% was entered in subheading 2817.00.00, HTSUS, as zinc oxide, and liquidated between February 07, 2014 and April 11, 2014, in subheading 3824.90.92, HTSUS, as “other” chemical products and preparations of the chemical or allied industries. Protestant claims classification, as entered, in subheading 2817.00.00, HTSUS.
FACTS:
The PreMix ZnO Red 80% is composed of 80% zinc oxide (ZnO), and 20% low molecular weight ethylene-vinyl acetate (EVA) and ethylene propylene rubber (EPR) polymer binder, with less than 1% red pigment. The EVA-EPR binder is chemically linked with the zinc oxide powder to form a granular or pellet shaped composite, where both the polymer and zinc oxide are cross linked together. The polymer matrix is stated to be chemically inactive, and degrading under heat.
The Protestant states that the polymer does not alter the chemical function of the zinc oxide, and that the function of the zinc oxide as a chemical accelerator during the vulcanization reaction is not affected by its combination with the polymer binder.
ISSUE:
Whether the PreMix ZnO Red 80% is classified in heading 2817, HTSUS, as zinc oxide, or in heading 3824, HTSUS, as an other chemical preparation.
LAW AND ANALYSIS:
The matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii),(iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 1703-14-100208 was properly accorded to protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise.
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification 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 or notes do not require otherwise, the remaining GRIs 2 through 6 may be applied.
The HTSUS provisions under consideration are as follows:
2817.00.00: Zinc oxide; zinc peroxide
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:
* * *
Note 1 to Chapter 28 provides as follows:
Except where the context otherwise requires, the headings of this Chapter
apply only to :
Separate chemical elements and separate chemically defined
compounds, whether or not containing impurities;
The products mentioned in (a) above dissolved in water;
The products mentioned in (a) above dissolved in other solvents provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use;
The products mentioned in (a), (b) or (c) above with an added stabiliser (including an anti-caking agent) necessary for their preservation or transport;
The products mentioned in (a), (b), (c) or (d) above with an added anti-dusting agent or a colouring substance added to facilitate their identification or for safety reasons, provided that the additions do not render the product particularly suitable for specific use rather than for general use.
* * *
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).
EN 28.17 provides, in pertinent part, as follows:
Zinc oxide is mainly used in industrial paints. It is also used in the rubber industry, ceramic, glass manufacturing, electronics and pharmaceuticals. Zinc oxide is also a precursor of a wide variety of inorganic or organic salts used in the manufacture of plastics.
* * *
Pursuant to Note 1 to Chapter 28, the addition of chemical elements or compounds to an otherwise pure chemical element of this Chapter is permissible when such additives are present only as anti-dusting agent added for safety reasons, as stabilizers (such as anti-caking agents) necessary for preservation or transport, as coloring agents to facilitate their identification. The instant zinc oxide compound contains 20% of EVA and EPR polymer binder and .1% red pigment. The protestant contends that the polymer is present only as a dust suppressant, and the red pigment solely to facilitate identification.
There is no dispute that the .1% pigment added to the product for identification is permissible under Note 1(e) to Chapter 28; the issue is whether the EVA-EPR binder is itself necessary for safety or transport, and if so, whether the quantity exceeds that necessary for safety or transport and renders the product suitable for specific use rather than general use.
The issue of whether the introduction of an additive to an otherwise pure chemical element of Chapter 28 or 29 renders a product particularly suitable for a specific use has been addressed by CBP and by the courts in prior rulings. For example, in Degussa Corp. v. United States, 508 F. 3d 1044 (Fed. Cir. 2007) (Degussa II), the Court of Appeals for the Federal Circuit (CAFC) reversed the holding in the Court of International Trade (CIT) that fumed silica is a separate chemical compound. In reversing the CIT"s holding, the CAFC found that the reaction of silicon dioxide and certain silanes or silicone oil (which left certain carbon containing moieties in the silicon product) changed the nature of the silica particles from hydrophilic (i.e. water-attractive) to hydrophobic (i.e. water-repellent), rendering it particularly suitable for incorporation into certain organic solvents and polymers (the hydrophobic nature of the finished silicon product made such incorporation faster and easier as compared to a hydrophilic formulation). Hence the product at issue could not be classified under Chapter 28.
Similarly, in Roche Vitamins, Inc. v. United States, 922 F. Supp. 2d 1353 (CIT 2013), aff’d 772 F.3d 728 (Fed. Cir. 2014), the CIT concluded, with respect to the beta carotene formulation “BetaTab”, that merchandise that might otherwise be classified under the headings of Chapter 29 becomes "particularly suitable for specific use," pursuant to Note 1(f) to Chapter 29, and is thus excluded from those headings, when (1) the ingredients added to it facilitate uses not ordinary to goods of the heading or (2) where the added ingredients alter the chemical's reactive properties in a manner that excludes uses ordinary to goods of the heading.”
In the instant case, the enclosure of the zinc oxide powder with the polymer binder in the instant case changes the nature of the product and renders it particularly suitable for the specific use of curing rubber. Zinc oxide has a natural affinity to attract and hold some moisture from humidity in the air (i.e., it is hygroscopic). The EVA-EPR binder acts as a hydrophobic encapsulant, preventing absorption of humidity which might otherwise interfere in the rubber curing process. At the vulcanization temperature, the binder gradually melts, evenly releasing the zinc oxide into the mixture. The gradual release of the zinc oxide into the rubber mixture also reduces energy consumption and prevents heat swell, resulting in a smoother extrusion profile. In essence, the polymer encapsulant is being used as a timed release mechanism for the zinc oxide. The primary purpose and ultimate goal of this particular formulation is therefore to ensure that the zinc oxide is evenly distributed in the rubber mixture, resulting in a more uniform rubber product (i.e. the texture and smoothness of the rubber will remain consistent, with no random hard or soft spots).
Typical anti-dusting agents, such as stearic acid or triglycerides, normally account for no more than 5% by weight of the product. It is not necessary to fully encapsulate the zinc oxide merely to preserve or stabilize it for transport; the 20% polymer encapsulation is designed to produce a better rubber compound by gradually releasing the zinc oxide into the rubber mixture. The instant EVR-EPR encapsulant goes beyond the function of an anti-dusting agent added for safety reasons, or an anti-caking agent necessary for stabilization or transport; this formulation is engineered to produce a version of zinc oxide for the specific use of curing rubber.
In addition, we note that the descriptions and advertisements of similar formulations of 80% zinc oxide with polymer binders suggest that such formulations are specially crafted for the specific use of curing rubber. For example, a technical data sheet for Rhenogran ZnO-80 describes it as “a special grade of zinc oxide particularly suitable for the rubber industry. Due to its EPDM elastomer bound form, the absorption of humidity from the atmosphere during storage is prevented. In comparison to extrusion compounds containing powdered zinc oxide, those manufactured with Rhenogran ZnO-80 provide smoother profiles. This is due to the more homogeneous dispersion of Rhenogran ZnO-80. A slight increase in modulus and tensile strenghth usually occurs; elongation at break is also improved…Effective and rapid dispersion of Rhenogran ZnO-80 becomes evident by reduced energy consumption during the mixing process. Rhenogran ZnO-80 prevents the heat swell which normally occurs when powdered zinc oxide is used in CR mixes.” “ActmixZnO-80” and “Predispersion Rubber Chemical ZnO-80”, both similar 80/20 zinc oxide formulations, are also marketed for their smooth extrusion and distribution and for their tensile strength.
Hence, we find that the encapsulation of the zinc oxide with the EVA-EPR binder renders the instant product particularly suitable for the specific use of curing rubber, and precludes its use in other applications such as pharmaceuticals or glass manufacturing. The Premix ZnO Red 80% is therefore excluded from Chapter 28 pursuant to Notes 1(d) and 1(e) to that Chapter.
HOLDING:
By application of GRI 1, the Premix ZnO Red 80% is classified in heading 3824, HTSUS, specifically subheading 3824.90.92, HTSUS, which provides for “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: Other: Other.” The 2014 column one, general rate of duty is 5% ad valorem.
You are instructed to deny the protest. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public online at
http://www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division