CLA-2 OT:RR:CTF:TCM H018531 IDL
Ms. Sherri Comeau
Customs Compliance Specialist
Barry Callebaut
2950 Nelson Street
St. Hyacinthe, Quebec J2S 1Y7
Canada
Re: Milk Chocolate Flakes; Sweet Chocolate Sprinkles; NY N006037 and NY N006038 affirmed
Dear Ms. Comeau:
This letter is in response to your requests, received on September 12, 2007, for reconsideration of New York Ruling Letter (NY) N006037, dated February 16, 2007, and NY N006038, dated February 20, 2007, issued to a customs broker on behalf of your company, Barry Callebaut, by the National Commodity Specialist Division, U.S. Customs and Border Protection (CBP). At issue in NY N006037 was the classification of milk chocolate flakes (Product No. SPLIT-9-M-448) under the Harmonized Tariff Schedule of the United States (HTSUS). At issue in NY N006038 was the classification of sweet chocolate sprinkles (splinters/flakes) (Product No. SPLIT-9-D-472) under the HTSUS. We have reviewed NY N006037 and NY N006038, and have found them to be correct. Our discussion on this matter is set forth below.
FACTS:
In NY N006037, the merchandise at issue was described as milk chocolate flakes composed of 55.5 percent sugar, 16.5 percent cocoa butter, 15.0 percent dry whole milk, 13.0 percent cocoa paste and traces of vanilla flavor, shipped in 5-kilogram bags. The flakes were intended to be used to decorate cakes and pastries.
In NY N006038, the merchandise at issue was described as sweet chocolate sprinkles/splinters/flakes composed of 58.0 percent sugar, 32.5 percent cocoa liquor, 7.0 percent cocoa powder, 2.0 percent butterfat, and traces of soy lecithin and vanilla flavor, shipped in 5-kilogram bags. The sprinkles were intended to be used to decorate desserts.
In both rulings, CBP classified the relevant merchandise in subheading 1806.90.9090, HTSUSA, which provides for “Chocolate and other food preparations containing cocoa: Other … Other … Other … Other … Other.” You have taken the position that the milk chocolate flakes and the sweet chocolate sprinkles should have been classified under subheading 1806.20.9900, HTSUSA, which provides for, among other things, food preparations containing cocoa weighing more than 2 kg or in “bulk form”.
ISSUE:
Whether the milk chocolate flakes and sweet chocolate sprinkles described above are correctly classified under subheading 1806.20.9900 or under subheading 1806.90.9090, HTSUSA?
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 HTSUS provisions under consideration are as follows:
1806 Chocolate and other food preparations containing cocoa:
* * *
Other preparations in blocks, slabs or bars, weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg:
* * *
Other:
* * *
Other:
* * *
Other:
* * *
Other:
* * *
Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17:
* * *
1806.90.90 Other…..
* * *
1806.90.9090 Other…
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 18.06 provides the following:
Chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter; in some cases, cocoa powder and vegetable oil may be substituted for cocoa paste….
* * *
The heading also includes all sugar confectionery containing cocoa in any proportion (including chocolate nougat), sweetened cocoa powder, chocolate powder, chocolate spreads, and, in general, all food preparations containing cocoa (other than those excluded in the General Explanatory Note to this Chapter).
As stated above, the milk chocolate flakes contain ingredients that
include cocoa paste, sugar, vanilla flavor, and cocoa butter. The sweet chocolate sprinkles contain ingredients that include sugar, cocoa powder, and vanilla flavor. Both the milk chocolate flakes and the sweet chocolate sprinkles meet the requirements of heading 1806, HTSUS, and the description provided in EN 18.06. As such, both chocolate products are properly classified in heading 1806, HTSUS. GRI 6 provides that “for legal purposes”, classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheadings 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.
You contend that in both instances, the correct classification for the products is subheading 1806.20, HTSUS, because it provides for food preparations containing cocoa in “bulk form…of a content exceeding 2 kg”, and in both instances the relevant merchandise weighs more than 2 kg. It has long been the position of CBP that the expression “bulk form” in subheading 1806.20 refers to food preparations that will undergo material change into a finished article after importation. See HQ 083901 (May 12, 1989), wherein we classified miniature molded milk chocolate bears under subheading 1806.90, HTSUS, holding that such products were finished articles, rather than a material form to be made into a finished article. See also, HQ 087146 (October 10, 1991), wherein we classified chocolate sprinkles and shavings under subheading 1806.90, HTSUS, based on this principle.
Based on the foregoing definition of “bulk form”, we find that although the products are shipped in bulk quantities (5-kilogram bags), they are not in “bulk form” as required by subheading 1806.20, HTSUS. Flakes and sprinkles are not forms cited in the provision, and are not encapsulated by the phrase “other bulk form”. Rather, the milk chocolate flakes and sweet chocolate sprinkles (or splinters/flakes) are imported as finished goods. As such, we find that the milk chocolate flakes and sweet chocolate sprinkles are precluded from classification under subheading 1806.20, and meet the requirements of subheading 1806.90, HTSUS.
Both chocolate products in the instant case contain over 10 percent by dry
weight of sugars mixed with other ingredients. Subheadings 1806.90.5500 and 1806.90.5900, HTSUSA, cover “Articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17”. Additional U.S. Note 3 to Chapter 17 provides the following:
[T]he term “articles containing over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17” means articles containing over 10 percent by dry weight of sugars derived from sugar cane or sugar beets, whether or not mixed with other ingredients, except… (d) cake decorations and similar products to be used in the same condition as imported without any further processing other than the direct application to individual pastries or confections, finely ground or masticated coconut meat or juice thereof mixed with those sugars, and sauces and preparations therefor.
According to the information submitted, the milk chocolate flakes and sweet chocolate sprinkles are used for decorating desserts and, therefore, fall under the exception listed in subsection (d) of Additional U.S. Note 3 to Chapter 17. Thus, the products are precluded from classification under subheadings 1806.90.5500 and 1806.90.5900, HTSUSA. Accordingly, the milk chocolate flakes and sweet chocolate sprinkles are classified under subheading 1806.90.9090, HTSUSA.
HOLDING:
By application of GRI 1 through the provisions of GRI 6, the milk chocolate flakes and sweet chocolate sprinkles are classified in heading 1806, HTSUS, and are specifically provided for under subheading 1806.90.9090, HTSUSA, as “Chocolate and other food preparations containing cocoa: Other … Other … Other … Other … Other.”
EFFECT ON OTHER RULINGS:
NY N006037, dated February 16, 2007, and NY N006038, dated February 20, 2007, are affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division