OT:RR:CTF:FTM H330555 BJK
Mr. Robert B. Back
Focus Solutions B.V.
Wilhelminakanaal Noord 2A
4902 VR Oosterhout
The Netherlands
RE: Tariff classification of Natural Cream Emulsion Flavoring from the Netherlands
Dear Mr. Back:
This is in response to your request, on behalf of Focus Solutions B.V., dated February 10, 2023, for a binding ruling regarding the tariff classification of a natural cream emulsion flavoring, WONF F-1088, product number #01-061-145-000, under the Harmonized Tariff Schedule of the United States ("HTSUS"), imported into the United States from the Netherlands.
Your request was forwarded by the National Commodity Specialist Division to this office for a response. In arriving at our determination, we considered the information submitted in your ruling request and additional information submitted via email. Within your request for a binding ruling, you asked that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. 177.2(b)(7), your request for confidentiality is approved. The information contained within the brackets of your request will not be released to the public.
FACTS:
The subject merchandise is a natural cream emulsion flavoring, WONF F-1088, product number #01-061-145-000 (hereinafter referred to as "cream flavoring"), that is described as a light white liquid that appears and smells like standard cream, milk, or other dairy products. The cream flavoring is comprised of the following: a cream base [***], [***]; water, [***]; and a "natural flavor" [***], [***]. According to the requestor, the cream flavoring is manufactured by mixing and blending all the ingredients together in a tank. No distillation or special processing beyond the mixing and blending in the tank occurs.
The primary ingredient is the cream base, which is composed of the following ingredients: [***] cream, [***] sugar derived from sugar beet, [***] milk protein concentrate, and [***] water. The cream base is said to contain no alcohol and functions to impart cream flavoring in product. The secondary ingredient is the "natural flavor" [***], which contains alcohol, and is composed of [***] and [***].
A sample of the cream flavoring was submitted to U.S. Customs and Border Protection (CBP) for laboratory analysis. Based on CBP's lab analysis, the cream flavoring contained 21.4 percent sucrose and 0.8 percent lactose on an as is basis. Fructose, glucose, and maltose were not detected. The sample contained 6.2 percent total milk fat and 4 percent protein on an as is basis. The sample contained 11 percent total milk solid on an as is basis. No vanillin, ethylvanillin, maltol or any other flavor/fragrance ingredient were observed in the sample. Semiquantitative analysis showed that the sample contained approximately 15 percent ethanol.
The cream flavoring is not intended for consumption as a beverage, but rather it is imported and sold in bulk to manufacturers for use in alcoholic beverage products to yield a cream flavoring and mouth feel. The cream flavor is said to contain 15.088 percent ABV before it is mixed into other alcohol to produce the final flavored beverage.
ISSUE:
What is the tariff classification of the cream flavoring?
LAW AND ANALYSIS:
Classification decisions under the HTSUS are made in accordance with the General Rules of Interpretation ("GRIs"). 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 2 through 6 may then be applied in order.
The 2023 HTSUS provisions under consideration are as follows:
0402 Milk and cream, concentrated or containing added sugar or other sweetening matter:
* * *
1901 Malt extract; food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing less than 40 percent by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of headings 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:
1901.90 Other:
1901.90.61 Described in additional U.S. note 10 to chapter 4 and entered pursuant to its
provisions
1901.90.62 Other (See subheadings 9904.04.50 - 9904.05.01)
* * *
2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 percent by vol.; spirits, liqueurs and other spirituous beverages:
2208.90 Other:
2208.90.80 Other
* * *
3302 Mixtures of odiferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry; other preparations based on odiferous substances, of a kind used for the manufacture of beverages:
* * *
Chapter 33, HTSUS, Note 2 states that:
The expression "odiferous substances" in heading 3302 refers only to the substances of heading 3301, to odiferous constituents isolated from those substances or to synthetic aromatics.
* * *
In addition, in interpreting the HTSUS, the Explanatory Notes ("ENs") of the Harmonized Commodity Description and Coding System may be utilized. The ENs to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff 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 (Aug. 23, 1989).
Chapter 4 General Note states that:
This Chapter covers:
(I) Dairy products:
(A) Milk, i.e., full cream milk and partially or completely skimmed milk
(B) Cream
(C) Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream
(D) Whey
(E) Products consisting of natural milk constituents, not elsewhere specified or included
(F) Butter and other fats and oils, derived from milk; dairy spreads
(G) Cheese and curd
The products mentioned at Items (A) to (E) above may contain, in addition to natural milk constituents (e.g., milk enriched in vitamins or mineral salts), small quantities of stabilizing agents which serve to maintain the natural consistency of the product during transport in liquid state (disodium phosphate, trisodium citrate and calcium chloride, for instance) as well as very small quantities of anti-oxidants or of vitamins not normally found in the product. Certain of these products may also contain small quantities of chemicals (e.g., sodium bicarbonate) necessary for their processing; products in the form of powder or granules may contain anticaking agents (for example, phospholipids, amorphous silicon dioxide).
. . .
The Chapter also excludes, inter alia, the following :
(a) Food preparations based on dairy products (in particular, heading 19.01)
. . . .
* * *
EN 19.01 states, in pertinent part, that:
. . .
(III) Food preparations of goods of headings 04.01 to 04.04, not containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included.
The preparations of this heading may be distinguished from the products of headings 04.01 to 04.04 in that they contain, in addition to natural milk constituents, other ingredients not permitted in the products of those earlier headings.
* * *
EN 22.08 states, in pertinent part, that:
This heading covers, whatever their alcoholic strength:
A) Spirits produced by distilling wine, cider or other fermented beverages or fermented grain or other vegetable products, without adding flavoring; they retain, wholly or partly, the secondary constituents (esters, aldehydes, acids, higher alcohols, etc.) which give the spirits their peculiar individual flavors and aromas.
B) Liqueurs and cordials, being spirituous beverages to which sugar, honey or other natural sweeteners and extracts or essences have been added (e.g., spirituous beverages produced by distilling, or by mixing, ethyl alcohol or distilled spirits, with one or more of the following : fruits, flowers or other parts of plants, extracts, essences, essential oils or juices, whether or not concentrated). These products also include liqueurs and cordials containing sugar crystals, Fruit, nut or vegetable juices, egg liqueurs, herb liqueurs, berry liqueurs, spice liqueurs, tea liqueurs, chocolate liqueurs, milk liqueurs and honey liqueurs.
C) All other spirituous beverages not falling in any preceding heading of this Chapter.
Provided that their alcoholic strength by volume is less than 80% vol, the heading also covers undenatured spirits (ethyl alcohol and neutral spirits) which, contrary to those at (A), (B), and (C) above, are characterized by the absence of secondary constituents giving a flavour or aroma. These spirits remain in the heading whether intended for human consumption or for industrial purposes.
* * *
EN 33.02 states, in pertinent part, that:
This heading covers the following mixtures provided they are of a kind used as raw materials in the perfumery, food or drink industries (e.g., confectionary, food or drink flavorings) or in other industries (e.g., soap-making):
1) Mixtures of essential oils
2) Mixtures of resinoids
3) Mixtures of extracted oleoresins
4) Mixtures of synthetic aromatics
5) Mixtures consisting of one or more odiferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics)
6) Mixtures of one or more odiferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics) combined with added diluents or carriers such as vegetable oil, dextrose or starch
7) Mixtures, whether or not combined with a diluent or carrier containing alcohol, of products of other Chapters (e.g., spices) with one or more odiferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics), provided these substances form the basis of the mixture.
. . .
The heading also includes other preparations based on odoriferous substances, of a kind used for the manufacture of beverages. These preparations may be either alcoholic or non-alcoholic and may be used to produce either alcoholic or non-alcoholic beverages. They must have a basis of one or more odoriferous substances, as described in Note 2 to this Chapter, which are used primarily to impart a fragrance and secondarily to give a flavor to beverages. Such preparations generally contain a relatively small quantity of odoriferous substances which characterize a particular beverage; they may also contain juices, coloring matter, acidulants, sweeteners, etc., provided that they retain their character of odoriferous substances. As presented, these preparations are not intended for consumption as beverages and thus can be distinguished from the beverages of Chapter 22.
* * *
The product subject to this ruling is a natural cream flavoring, consisting of a cream base, water, a "natural flavor," and alcohol. While the subject cream flavoring is comprised of a cream base that would be a product of heading 0402, the inclusion of alcohol in the "natural flavor" places the cream flavoring outside the purview of Chapter 4, HTSUS, as a "milk or cream." The General Note to Chapter 4, HTSUS indicates that "small quantities of stabilizing agents" are permissible within a milk or cream under Chapter 4, HTSUS. However, the inclusion of alcohol in the cream flavoring at issue here serves more than to stabilize the dairy constituents. As such, the cream flavoring is not classifiable under Chapter 4, HTSUS.
As a threshold consideration, CBP notes that the cream flavoring contains roughly 15 percent ABV, which has us consider heading 2208, HTSUS, undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol.; spirits, liqueurs and other spirituous beverages. In examining whether the cream flavoring, by virtue of its alcohol content, is classified under heading 2208, HTSUS, CBP looks to the ENs and prior CBP rulings as instructive. The ENs for heading 2208, HTSUS, provide that this heading covers spirits, liqueurs, and cordials, and "all other spirituous beverages not falling in the preceding heading of this Chapter." EN 22.08 states that this heading covers "Spirts produced by distilling wine, cider or other fermented beverages or fermented grain or other vegetable products." The cream flavoring therefore would not be considered a spirit under EN 22.08, as it is a mixed and blended product of a cream base, "natural flavor" that contains alcohol and water, and is not distilled or fermented. EN 22.08 also provides that the heading covers "Liqueurs and cordials, being spirituous beverages to which sugar, honey or other natural sweeteners and extracts or essences have been added (e.g., spirituous beverages produced by distilling, or by mixing, ethyl alcohol or distilled spirits, with one or more of the following : fruits, flowers or other parts of plants, extracts, essences, essential oils or juices, whether or not concentrated." As described previously, there are no fruits, flowers, other parts of plants, extracts, essences, essential oils, or juices contained in the cream flavoring, and moreover, the cream flavoring is not produced by distilling or mixing alcohol or distilled spirits with any of those ingredients. EN 22.08 also states that "Provided that their alcoholic strength by volume is less than 80% vol, the heading also covers undenatured spirits (ethyl alcohol and neutral spirits) which, contrary to those at (A), (B), and (C) above, are characterized by the absence of secondary constituents giving a flavour or aroma. These spirits remain in the heading whether intended for human consumption or for industrial purposes" (emphasis added). Here, it is the secondary constituents of the cream flavoring, namely the cream base which accounts for most of the composition of the product, that imbues the cream flavoring with both a flavour and aroma. Therefore, based on a plain reading of EN 22.08, the cream flavoring at issue here would not fall in one of the enumerated provisions above.
In Headquarters Ruling Letter (HQ) 966103, dated December 19, 2003, CBP considered whether a cream liqueur concentrate was classified under heading 2208, HTSUS, as a spiritous beverage. CBP determined that the cream liqueur concentrate, which was produced by combining cream, alcohol, sucrose, maltodextrine, sodium caseinate, and water, was not a spirituous beverage. In HQ 966103, CBP concluded that a spiritous beverage is a beverage containing alcohol, distilled rather than fermented and to be considered a beverage, "a product must have an actual and substantial use as a beverage itself, and not be diluted or principally used as an ingredient" (citing Strohmeyer & Arpe Co. v. U.S., 28 C.C.P.A. 34; CAD 121 (1940) and Wah Shang Co. v. U.S., 44 C.C.P.A. 155; CAD 654 (1957)). In HQ 966103, CBP found that the cream liqueur concentrate, as entered, was not intended for consumption as a beverage, but instead as an ingredient for use in further beverage manufacturing and production. Therefore, CBP concluded that the cream liqueur concentrate could not be a spirituous beverage within the context of EN 22.08 due to its use as an ingredient in further processing and manufacturing.
Consequently, pursuant to both the plain language of EN 22.08 and application of the ENs to a cream liqueur concentrate in HQ 966103, the cream flavoring here is neither a spirituous beverage as contemplated under heading 2208, HTSUS, nor is it a spirit characterized by the absence of secondary constituents giving a flavor or aroma, whether intended for human consumption or for industrial purposes. Therefore, the cream flavoring is precluded from classification under heading 2208, HTSUS.
Alternatively, as suggested by Focus Solutions B.V., CBP considers whether the cream flavoring is classifiable under heading 3302, HTSUS, as an odiferous substance used in the manufacture of beverages. EN 33.02 provides that alcoholic or nonalcoholic preparations are classifiable under heading 3302, HTSUS, so long as the preparation has a basis of one or more odoriferous substances, as described in Note 2 to Chapter 33, which are used primarily to impart a fragrance and secondarily to give a flavor to beverages. Note 2 to Chapter 33 provides that the term "odiferous substances" in heading 3302, HTSUS, refers only to the essential oils classifiable under heading 3301, HTSUS. Therefore, for the natural cream flavoring to be classified under heading 3302, HTSUS, its ingredients must include an odiferous substance classified under heading 3301, HTSUS. The cream flavoring at issue does not contain essential oils or odiferous substances. Rather, it is composed of a cream base, water, "natural flavor", and alcohol, which are not classifiable under heading 3301, HTSUS. Consequently, the cream flavor is not composed of an odiferous substance to allow classification of the product under heading 3302, HTSUS.
CBP next looks to heading 1901, HTSUS, to determine whether the cream flavoring is classifiable as a food preparation of heading 0401 to 0404. EN 19.01 provides that "[t]he preparations of this heading may be distinguished from the products of headings 04.01 to 04.04 in that they contain, in addition to natural milk constituents, other ingredients not permitted in the products of those earlier headings." As discussed originally, the inclusion of alcohol in the cream flavoring resulted in the product being outside the purview of Chapter 4, HTSUS. In HQ 966103, CBP determined that the cream liqueur concentrate was not a spirituous beverage and could not be classified under heading 2208, HTSUS. Then, CBP examined whether the cream liqueur concentrate could be classified under heading 1901, HTSUS. CBP found that the cream liqueur concentrate was composed of 40 percent cream and the cream ingredient was a product of heading 0402, HTSUS. However, because of the addition of alcohol and other ingredients, the cream liqueur concentrate was precluded from classification in Chapter 4, HTSUS. Heading 1901, HTSUS, provides for "food preparations of goods of headings 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." In HQ 966103, CBP determined that the cream liqueur concentrate was a "food preparation of goods of heading 0401 to 0404 . . . not elsewhere specified or included," and classified the product under subheading 1901.90, HTSUS.
Here, the cream flavoring is composed primarily of a cream base, consisting of cream and milk protein concentrate, in addition to other ingredients. The cream base is a product classifiable under Chapter 4, HTSUS. However, the "natural flavor" contains alcohol, and the mixture and blending of the cream base with the "natural flavor" to produce the cream flavoring renders the final product unclassifiable under Chapter 4, HTSUS. Like the cream liqueur concentrate in HQ 966103, the cream flavoring here is "a food preparation of goods of heading 0401 to 0404 . . . not elsewhere specified or included," as provided for under heading 1901, HTSUS. Finding that the cream flavor is a food preparation under heading 1901, HTSUS, is consistent with our prior rulings on similar products. See HQ 084642, dated November 21, 1989 (determining that a cream liqueur whipped topping was not a beverage for purposes of heading 2208, HTSUS, but instead a food preparation with a milk or cream base classifiable under heading 1901, HTSUS); see also New York Ruling Letter ("NY") D85355, dated December 22, 1998 (determining that two types of cream base, both of which would be used as ingredients in the further production of different beverages and itself was not a beverage, was classifiable under heading 1901, HTSUS). Thus, the cream flavoring is classified under heading 1901, HTSUS.
HOLDING:
By application of GRI 1, the cream flavoring at issue is classified in subheading 1901.90.61, HTSUS, which provides, in relevant part, for "[F]ood preparations of goods of headings 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: Other: Other: Dairy products described in additional U.S. note 1 to chapter 4: Dairy preparations containing over 10 percent by weight of milk solids: Described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions." The 2023 general, column one rate of duty is 16% ad valorem.
If entered outside the quota, the applicable subheading for the cream flavoring will be 1901.90.62, HTSUS, which provides, in relevant part, for "[F]ood preparations of goods of headings 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: Other: Other: Dairy products described in additional U.S. note 1 to chapter 4: Dairy preparations containing over 10 percent by weight of milk solids: Other." The 2023 column one, general rate of duty is $1.035/kg + 13.6 percent 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 https://hts.usitc.gov/.
Please note that 19 C.F.R. 177.9(b)(1) provides that "[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by [CBP] field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based."
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Sarah Kafka, Chief Food, Textiles, and Marking Branch
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U.S. Department of Homeland Security
Washington, DC 20229