OT:RR:CTF:TCM H268218 MAB
Mr. Sean T. Murray
Miller & Company P.C.
4929 Main Street
Kansas City, MO 64112
RE: Classification of Enfamil Ready-to-Use Infant formula
Dear Mr. Murray:
This is in reply to your request submitted on June 2, 2015, to the Director, National Commodity Specialist Division, Customs and Border Protection (CBP), seeking a binding ruling concerning the classification of Enfamil infant formula under the Harmonized Tariff Schedule of the United States (HTSUS). In addition, you requested confidential treatment of certain specific information. Your request was forwarded to our office for reply. We have also considered the information presented in your correspondence dated June 17, 2015 and July 13, 2015, along with an email to staff of the National Commodity Specialist Division, dated July 22, 2015.
FACTS:
The merchandise, known as Enfamil infant formula, is a ready-to-use liquid formula for infants from birth to 12 months old packed in an 8-fl oz. sealed plastic bottle. The product is said to provide complete and balanced nutrition for infants’ first full year. It is composed of 82.7% water, 6.3% fluid skim milk (or 1.8% milk solids), 5.9% lactose, 3.2% vegetable oils blend, and less than 1%, each, of a variety of ingredients including galacto-oligosaccharide syrup, whey protein concentrate (80% protein), certain vitamins, minerals, prebiotics, and DHA, a fatty acid.
The lactose ingredient is produced from whey. The average moisture content in the lactose is 4.95% and the solids content is 95.05%.
ISSUE:
Whether the infant formula is a food preparation of goods of headings 0401 to 0404 (milk and whey, etc.) and therefore classified in heading 1901, Harmonized Tariff Schedule of the United States (HTSUS), or a food preparation not elsewhere specified or included of heading 2106, HTSUS?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (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 GRIs may then be applied.
The tariff provisions at issue are the following:
1901 …; Food preparations of goods of heading 0401 to 0404, not containing cocoa or containing less than 5 percent by weight of cocoa calculated on
a totally defatted basis, not elsewhere specified or included:
1901.10 Preparations for infant use, put up for retail sale:
Other:
Other:
Infant formula containing oligosaccharides:
1901.10.6000 Described in additional U.S. note 2 to this chapter and entered pursuant to its provisions
1901.10.7500 Other
* * * * *
2106 Food preparations not elsewhere specified or included:
2106.90 Other:
Other:
Other:
Other:
Other:
2106.90.99 Other:
Other:
2106.90.9990 Canned
* * * * *
When interpreting and implementing the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, while neither legally binding nor dispositive, provide a guiding commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. CBP believes the ENs should always be consulted. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to heading 1901 state, in pertinent part, the following:
The preparations of this heading may be distinguished from the products of headings 0401 to 0404 in that they contain, in addition to natural milk constituents, other ingredients not permitted in the products of those earlier headings. Thus heading 1901 includes, for example:
Preparations in powder or liquid form used as infant food or for dietetic purposes and consisting of milk to which secondary ingredients (e.g., cereal, groats, yeast) have been added;
Milk preparations obtained by replacing one or more constituents of milk (e.g., butyric fats) by another substance (e.g., oleic fats).
The ENs to Chapter 4 state, in pertinent part, the following:
This Chapter does not cover:
Products obtained from whey, containing by weight more than 95% lactose, expressed as anhydrous lactose, calculated on the dry matter (heading 17.02);
The ENs to heading 1702 (other sugars) state, in pertinent part, the following:
Lactose (also known as milk sugar) … which occurs in milk and is produced commercially from whey. This heading covers both commercial and chemically pure lactose. Such products must contain by weight more than 95% lactose, expressed as anhydrous lactose, calculated on the dry matter. … Products obtained from whey and containing 95% or less by weight of lactose, expressed as anhydrous lactose, calculated on the dry matter, are excluded (generally heading 0404)….
Lactose is used extensively, in milk, in the preparation of infant foods; it is also used in confectionery, in jam-making or in pharmacy.
The ENs to heading 21.06 state, in pertinent part, the following:
Provided that they are not covered by any other heading of the Nomenclature, this
Heading covers:
Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water milk, etc.), for human consumption.
You assert that the Enfamil infant formula meets all the requirements of heading 1901 in that it is a food preparation, of a good or goods of headings 0401 – 0404, that is not elsewhere specified or included, and contains less than 5% of cocoa. In regard to the requirement that it contains goods of headings 0401 to 0404, you emphasize that the infant formula includes the following milk products: skim milk (1.8% milk solids, wherein you factor out the liquid content), lactose (6.0%), and whey protein concentrate (0.8%), which together constitute 8.6 percent of the product. You explain that “[m]ilk and cream, not concentrated or containing added sugar or other sweetening matter” are classified in headings 0401 - 0404. You cite Note 1 to HTS Chapter 4 that “milk” is defined as “full cream milk or partially or completely skimmed milk.” In your calculation, in addition to the skim milk, you have included the lactose ingredient (which is 95.05 percent lactose by dry weight). Also, you state that the whey protein concentrate (0.8%) is covered by heading 0404.
You therefore argue that the Enfamil infant formula with a (corrected) total percentage of 8.5 percent of milk solids of headings 0401 to 0404 should be classified in subheading 1901.10 “…as preparations for infant use, put up for retail sale.” Specifically, you argue that the Enfamil should be classified in 1901.10.6000/.7500, because its milk solids content is below 10% by weight, and it contains lactose and a galacto-oligossaccharides syrup, which are both oligosaccharides.
We note that the classification of the lactose ingredient affects the classification of the infant formula. Lactose is a disaccharide derived from milk containing glucose and galactose units. The lactose ingredient you use to make the infant formula is produced from whey wherein the average moisture content is 4.95%. As such, it contains 95.05% lactose on the dry matter. Note (4) to Chapter 4, states that this Chapter does not cover:
Products obtained from whey, containing by weight more than 95% lactose, expressed as anhydrous lactose, calculated on the dry matter (heading 1702);
Thus, the lactose ingredient is classified in heading 1702, HTSUS, as a sugar, rather than heading 0404, HTSUS, as a product obtained from whey. Therefore, the lactose cannot be included in a calculation of percentage of goods of headings 0401 to 0404, HTSUS. The revised total of goods of headings 0401 to 0404, HTSUS, is 7.1% (6.3 % liquid skim milk in addition to 0.8% of whey protein concentrate). The pertinent question becomes whether or not 7.1% of goods of headings 0401 to 0404 is enough to classify the infant formula in heading 1901, HTSUS, as a food preparation of goods of milk and whey.
Ready-to-feed milk-based infant formulas classified in heading 1901 contain varying amounts of milk powder, or skim milk powder, or milk and whey powder, or whey protein powder and skim milk powder, or fluid skim milk with whey powder. See B85238, dated May 5, 1997 (classifying a ready-to-feed infant formula with 23.6% fluid skim milk, 6.2% whey and a concentrate infant formula with 47% fluid skim milk, 12% whey); HQ 950299, dated December 30, 1991 (classifying an infant formula with 5.23% demineralized whey protein powder, 1.8% milk powder), N245270, dated August 23, 2013 (classifying an infant formula with 22% nonfat goat milk powder), NY 815447, dated November 1, 1995 (classifying an infant powder with 35.1% milk, a liquid concentrate with 8.2% milk, a powder with 25.9% milk, a concentrate with 14.8% milk and whey, a ready-to-feed infant formula with 7.56% milk and whey, and a ready-to-feed infant formula with 4.2% milk.
The instant Enfamil infant formula (6.3% fluid skim milk and 0.8% whey protein concentrate) falls within the range cited in previous rulings. Therefore, it is properly classified under heading 1901, HTSUS.
Heading 2106 provides for food preparations not elsewhere specified or included. The EN to heading 2106 states this heading covers “preparations for use, either directly or after processing … for human consumption.” Customs has previously classified infant formulas in heading 2106. In most of these rulings, the infant formulas were not milk-based, i.e., they contained no milk or milk products. See, HQ 950917, dated May 11, 1992 (classifying a lactose-free infant formula in ready-to-use form in subheading 2106.90.9990); NY B85383, dated May 23, 1997 (classifying a soy-based formula in ready-to-use form in subheading 2106.90.9990).
On May 4, 2010, CBP classified a ready-to-feed milk-based infant formula in heading 2106 in N102047. The product is described as follows:
The product is a ready-to-feed shelf-stable infant formula, for children up to 12 months or age, in bottles containing 8 fluid ounces, six bottles in a shrink-wrapped cardboard tray. The formula is composed of approximately 85 percent water, 6 percent lactose, 3 percent fat blend, 2 percent nonfat dried milk, one percent whey protein concentrate, and less than one percent, each, vitamin premix, nutrient premix, nucleotide premix, ascorbic acid, potassium bicarbonate, potassium hydroxide, ferrous sulfate, and carrageenan.
The instant Enfamil infant formula uses 6.1% liquid skim milk and 0.8% whey protein concentrate. The infant formula in ruling N102047 uses 2% nonfat dried milk (skim milk powder) and 1% whey protein concentrate. Since the Enfamil infant formula contains more than double the amount of milk-based products than the infant formula in N102047, they are not analogous. Therefore, the Enfamil infant formula here is not properly classified in heading 2106.
As noted above, the instant Enfamil infant formula is classified in heading 1901, HTSUS. We do not need to resort to the “basket” provision, heading 2106, which provides only for products not specified elsewhere. Because the milk content is below 10% by weight (7.1%) and it contains a galacto-oligosaccharides syrup which is a oligosaccharide, at the 10-digit level, the Enfamil infant formula is classified in subheading 1901.10.6000/.7500, HTSUS, which provides for “Food preparations of goods of headings 0401 to 0404 … preparations for infant use put up for retail sale … Other: Infant formula containing oligosaccharides: Described in additional U.S. note 2 to this chapter and entered pursuant to its provisions … Other.”
HOLDING:
By application of GRI 1, the Enfamil infant formula is classified in heading 1901, HTSUS, which provides for “Food preparations of goods of heading 0401 to 0404…” It is specifically provided for in subheading 1901.10.6000, HTSUSA (Annotated), which provides for “Preparations for infant use put up for retail sale … Other: Infant formula containing oligosaccharides: Described in additional U.S. note 2 to this chapter and entered pursuant to its provisions.” The 2015 column one general rate of duty is 17.5% ad valorem. If the quantitative limits of Additional U.S. Note 2 to Chapter 19 are reached, then the classification will shift to subheading 1901.10.7500, HTSUSA, and is dutiable at the rate of $1.035/kg, plus 14.9% 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 World Wide Web at www.usitc.gov.
We note that you currently produce the infant formula in the United States for exportation. It’s our understanding that you sought this prospective ruling because the infant formula might be returned to the United States for testing. When returned, the infant formula could be eligible for a duty-free entry under subheading 9801.00.1095, HTSUSA (Annotated), which provides for products of the U.S. that are returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad upon compliance with the documentary requirements of section 10.1, CBP Regulations (19 C.F.R. §10.1).
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch