CLA-2 OT:RR:CTF:TCM HQ H264274 NCD
Port Director
U.S. Customs and Border Protection
John F. Kennedy International Airport
Bldg #77
Jamaica, NY 11430
Attn: Tarra Speaks, Senior Import Specialist
Re: Protest and Application for Further Review No. 4701-13-100104; Classification of cosmetics ingredients
Dear Port Director:
The following is our decision regarding the Application for Further Review of Protest No. 4701-13-100104, timely filed on April 10, 2013, on behalf of Barnet Products Corp. (“Barnet” or “Protestant”). In the instant protest, Barnet contests classification by U.S. Customs and Border Protection (“CBP”) of various cosmetics ingredients under the Harmonized Tariff Schedule of the United States (“HTSUS”). Our decision as to the proper tariff classification of the subject cosmetics ingredients, and to the disposition of the instant protest, is set forth below.
FACTS:
The instant protest pertains to four liquids and two waxes, all of which are incorporated into cosmetic products as active ingredients following importation. According to Barnet’s submissions, which include material data safety sheets for each product, the products contain extracted botanical material, caprylic/capric triglycerides, and, in the cases of the three waxes, hydrogenated vegetable oil. The names and respective chemical make-ups of the products are described as follows:
Product Name
Constituents (by weight)
Lavandox
Caprylic/capric triglyceride
96-99%
Lavandula Stoechas extract
1-4%
Saliporine-8
Caprylic/capric triglyceride
94-99%
Salicornia herbacea extract
1-6%
Gorse Oil
Caprylic/capric triglyceride
96%
Ulex europaeus flower extract
1-4%
Buckwheat Oil
Caprylic/capric triglyceride
95-99%
Polygonum fagopyrum seed extract
1-5%
Buckwheat Wax
Caprylic/capric triglyceride
70-80%
Hydrogenated vegetable oil
15-20%
Polygonum fagopyrum seed extract
1-5%
Arophira
Caprylic/capric triglyceride
70-80%
Hydrogenated vegetable oil
15-20%
Crithmum maritimum extract
1-5%
Barnet asserts in its protest that the liquids are all obtained by means of a supercritical carbon dioxide solvent extraction in which supercritical carbon dioxide is applied to the botanical material to precipitate the latter’s dissolution in a co-solvent of caprylic/capric triglycerides. According to Barnet, the waxes are similarly obtained by means of an initial supercritical carbon dioxide extraction, but subsequently undergo partial evaporation and mixture with hydrogenated vegetable oil. These processes are depicted in appended production flowcharts for the above-listed products, all of which were issued by the products’ manufacturer.
The instant protest pertains to six entries of the subject products entered by Protestant at John F. Kennedy Airport between January 10, 2012 and June 21, 2012 under heading 1302, HTSUS, specifically under subheading 1302.19.91, HTSUS, which provides for: “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Other: Other.” CBP liquidated the six entries between October 12, 2012 and March 8, 2013 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.” Protestant now claims classification as entered.
ISSUE:
Whether the subject cosmetics ingredients are properly classified as extracts of heading 1302, HTSUS, or as chemical mixtures of heading 3824, HTSUS.
LAW AND ANALYSIS:
Initially, we note that 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. (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. 4701-13-100104 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because Protestant alleges that the decision against which the instant protest is filed involves questions of law or fact upon which the Commissioner of Customs, his designee, and the Customs courts have not ruled.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
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 HTSUS provisions under consideration are as follows:
1302 Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products:
Vegetable saps and extracts:
1302.19 Other:
1302.19.91 Other
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:
3824.90 Other:
Other:
Other:
Other:
3824.90.92 Other
As a preliminary matter, we note that the subject products can only be classified in heading 3824, HTSUS, if they are deemed excluded from heading 1302, HTSUS. Cargill, Inc. v. United States, 318 F. Supp. 2d 1279, 1278-88 (Ct. Int’l. Trade 2004) (characterizing heading 3824 as a basket provision). Accordingly, we initially consider whether the products are classifiable in heading 1302.
Heading 1302 provides, inter alia, for vegetable extracts. The tariff term “extract” is not defined in the HTSUS, but EN 13.02 provides the following description of “extracts” for tariff classification purposes:
Vegetable saps and extracts.
The heading covers saps and extracts (vegetable products usually obtained by natural exudation or by incision, or extracted by solvents), provided that they are not specified or included in more specific headings of the Nomenclature (see list of exclusions at the end of Part (A) of this Explanatory Note)…
…Extracts may be in liquid, paste or solid form. “Tinctures” are extracts still dissolved in the alcohol by means of which they are extracted; the so called “fluid extracts” are solutions of extracts in, for example, alcohol, glycerol or mineral oil. Tinctures and fluid extracts are generally standardised (for instance, pyrethrum extract may be standardised by adding mineral oil to produce commercial grades with a standard pyrethrins content of, e.g., 2%, 20% or 25%). Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder (e.g., belladonna extract, to which powdered gum Arabic is added), or to obtain a standard strength (for instance, certain quantities of starch are added to opium in order to obtain a product containing a known portion of morphine). The addition of such substances does not affect the classification of these solid extracts.
The vegetable saps and extracts of this heading are generally raw materials for various manufactured products. They are excluded from the heading when, because of the addition of other substances, they have the character of food preparations, medicaments, etc…
According to this description, a fluid or solid extract of heading 1302 is a product obtained by solvent extraction and, where needed, certain post-extraction steps tailored to converting the form or standardizing the contents of the extract. In view of this, fluid solutions of dissolved vegetable material left in raw, unaltered form or supplemented with certain standardizers fall within the scope of heading 1302. See Headquarters Ruling Letter (HQ) W967653 and W968370, dated July 31, 2008 (ruling that pine bark extracts dissolved in ethanol and standardized at certain concentrations are classified in heading 1302). They remain within heading 1302 upon evaporation of the solvent to render the extract a solid, and the subsequent addition of inert substances that enable or facilitate the pulverization or standardization of the now-solid extract. See HQ H225004 and HQ 225008, dated November 10, 2015 (classifying mixtures of botanical extracts, dextrin, silicon dioxide, and cellulose in heading 1302 upon determining that the latter ingredients functioned merely as glidants and binders). However, as made clear by EN 13.02, any additions must be truly inert in that they do not impart properties that, for example, increase the nutritional or pharmaceutical utility of the extract to the point that it is no longer raw. See HQ 962392, dated May 1, 2000 (ruling that an extract mixed with roots and berries was no longer a “raw material” classifiable in heading 1302); HQ H195716, dated February 19, 2015 (excluding from heading 1302 an extract supplemented with enriched soybean lecithin to improve the bioavailability of the extract’s polyphenols); New York Ruling Letter N245425, dated September 4, 2013 (classifying blend of various extracts with benzyl alcohol and glycerine used in personal care products in heading 3824); and NY N104435, dated May 17, 2010 (classifying mineral extract with added preservatives used in cosmetic products in heading 3824).
Here, Barnet asserts that the four liquids are obtained solely by supercritical carbon dioxide solvent extractions that yield solutions of botanical material in caprylic/capric triglycerides. This account of the production process is consistent with the depictions in the manufacturer-issued flowcharts for these liquids and with descriptions contained in a patent pertaining to the Buckwheat Oil, all of which indicate that the liquids have not undergone additional processing or supplementation beyond initial extraction. See U.S. Patent No. 6,596,288, issued July 22, 2003. Moreover, Barnet’s descriptions of the liquids’ chemical compositions are supported by pertinent material safety data sheets and promotional literature, issued not only by Barnet but also by the manufacturer, that list botanical extractants and caprylic/capric triglycerides as the liquids’ sole constituents. Therefore, the four liquids, i.e., Lavandox, Saliporine-8, Gorse Oil, and Buckwheat Oil, are meet the description of “fluid extract” set forth in EN 13.02. As such, they are properly classified in heading 1302.
Barnet asserts that the two waxes are similarly obtained by initial supercritical carbon dioxide extraction, but that this extraction is followed by the partial evaporation of the triglyceride co-solvents and addition of “inert” hydrogenated vegetable oil. As with the liquids, Barnet’s descriptions of the waxes’ production processes and chemical compositions are substantiated by relevant patents, patent applications, product specifications, and promotional literature. See U.S. Patent No. 6,596,288 (describing production of Buckwheat Wax); and U.S. Patent App. No. 10/466,855, filed June 22, 2002 (describing production of Arophira). However, its characterization of the hydrogenated vegetable oil as “inert” is inaccurate. Our research indicates that while hydrogenated vegetable oil acts as a thickener and standardizer, it also boasts emollient properties that boost the efficacy of the cosmetic products into which it is incorporated. Richard J. Lewis, Sr., Hawley’s Condensed Chemical Dictionary 879 (15th ed. 2007) (listing “emollient” among functions of Neobee® hydrogenated vegetable oil); Vegetable Oil and Hydrogenated Vegetable Oil, cosmeticsinfo.org (last visited March 7, 2016) (“Vegetable Oil and Hydrogenated Vegetable Oil slow the loss of water from the skin by forming a barrier on the skin's surface… and Hydrogenated Vegetable Oil may also be used to increase the thickness of the lipid (oil) portion of cosmetics and personal care products.”). Similar to the various additives in above-cited HQ 962392, HQ H195716, NY N245425, and NY N104435, the hydrogenated vegetable oil is an active ingredient that advances the waxes to the point that they can no longer be considered simply “raw materials”. Consequently, the two waxes, i.e., Buckwheat Wax and Arophira, are excluded from heading 1302, HTSUS.
Barnet contends that the waxes are comparable to products that have previously been classified in heading 1302, HTSUS. To support this contention, Barnet cites HQ 963848, dated April 17, 2002, and HQ 957796, dated November 20, 1995, in which pyrethrum extracts with xylene additives were classified in heading 1302. Barnet also cites NY F87860, dated June 15, 2000, and NY 889578, dated September 8, 1993, classifying, respectively, a nettle root extract with a maltodextrin additive and an “herbal” extract product with olive oil and ethanol additives in heading 1302. However, as used in those products, xylene and maltodextrin are typically inert substances that lack utility beyond their functions as stabilizers. See NY N235903, dated December 17, 2012; NY D86864, dated February 16, 1999; and NY 818882, dated February 23, 1996 (discussing the use of maltodextrin as an inert ingredient in extract blends); 40 C.F.R. § 180.910-930 (listing xylene as an inert ingredient in pesticides), Memorandum from Pauline Wagner, Chief, Inert Ingredient Assessment Branch, Registration Division, Envtl. Prot. Agency to Lois A. Rossi, Director, Registration Division, Envtl. Prot. Agency (Dec. 14, 2005) (“Xylene…is used as an inert ingredient in agricultural crop products, post-harvest grain storage products, and residential pesticide products used in and around the home.”). Moreover, there is no indication that the ethanol-olive oil mixture added to the herbal product in NY 889578 was an active ingredient of that product. In effect, the instant waxes are distinguishable from the products at issue in the cases cited by Barnet and, as stated above, cannot be classified in heading 1302.
We accordingly consider whether the waxes are classifiable in heading 3824, HTSUS, which provides for chemical products and preparations not elsewhere specified or included. EN 38.24 states, in pertinent part, as follows:
(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS
…
The chemical or other preparations are either mixtures (of which emulsions and dispersions are special forms) or occasionally solutions. Aqueous solutions of the chemical products of Chapter 28 or 29 remain classified within those Chapters, but solutions of these products in solvents other than water are, apart from a few exceptions, excluded therefrom and accordingly fall to be treated as preparations of this heading.
The preparations classified here may be either wholly or partly of chemical products (this is generally the case) or wholly of natural constituents (see, for example, paragraph (24) below).
According to EN 38.24, “chemical preparations” within the meaning of heading 3824 encompass both non-aqueous solutions and mixtures of natural and chemically modified substances. The instant waxes, as mixtures of extracted botanical material, caprylic/capric triglycerides, and hydrogenated vegetable oil, are therefore described as such, and are properly classified there. This determination is consistent with CBP’s practice of classifying in heading 3824 products that cannot be described as extracts of heading 1302 or as products of other headings providing for chemical substances. See HQ H195716, dated February 19, 2015.
HOLDING:
By application of GRI 1, the Lavandox, Saliporine-8, Gorse Oil, and Buckwheat Oil are classified in heading 1302, HTSUS. They are specifically classified in heading 1302.19.9190, HTSUSA (Annotated), which provides for: “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Other: Other: Other.” The general column one rate of duty is free.
By application of GRI 1, the Buckwheat Wax and Arophira are classified in heading 3824, HTSUS. They are specifically classified in subheading 3824.90.9295, HTSUSA, 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: Other.” The general column one rate of duty is 5.0% ad valorem.
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 instructed to ALLOW the protest in part and DENY the protest in part.
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 CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at 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