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HQ 955405




April 8, 1996

CLA-2 RR:TC:FC 955405 ALS

CATEGORY: CLASSIFICATION

TARIFF NO.: 3907.20.0000

Port Director of Customs
U.S. Customs Service
1 East Bay St.
Savannah, GA 31401

RE: Request for Further Review of Protest 1703-93-100152, Dated October 20, 1993, Concerning the classification OTA-480

Dear Port Director:

This ruling is on a protest that was filed against a decision of July 23, 1993, concerning the classification of the subject product.

FACTS:

Based on information received from the manufacturer, OTA-480 is a reaction product of glycerol and 2-methyl-1,2 ethandiol to form glycerol propoxylate and a further reaction of glycerol propolylate with acrylic acid to form OTA-480, an acrylic modified polyether polyol. It is a mixture of different chemical compounds resulting from the reactions of the above processes. The product contains 19 different products, all of which, are different combinations of glycerol, propoxy and acrylic monomer units. The product is used in the manufacturer of inks, adhesives and coatings. The importer believes that the product is an ester of acrylic acid classifiable in subheading 2916.12.5000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The product was liquidated in subheading 3906.90.2000, HTSUSA, which provides for acrylic polymers in primary form.

ISSUE:

What is the classification of the instant product which is used in inks, adhesives and coatings?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUSA is governed by the General Rules Of Interpretation (GRI's) taken in order. GRI 1 provides that the classification is determined first in accordance with the terms of the headings and any relative section and chapter notes. If GRI 1 fails to classify the goods and if the headings and legal notes do not otherwise require, the remaining GRI's are applied, taken in order.

Counsel for the importer suggests that the product is classifiable in subheading 2916.12.5000, HTSUSA, as a separate chemically defined compound. It alternatively suggests that the product should be considered as a miscellaneous chemical mixture under subheading 3823.90.5000, HTSUSA.

In considering this matter we note that the product is a rather complex mixture of different monomer combinations containing a good number of crosslinking sites at the double bond at the acrylic end of the molecules. We note that Customs had concluded that this product had the chemical and structural characteristics of a typical resin prepolymer and that it fell within the definition of a "prepolymer" as stated in Note 3(e) to Chapter 39, HTSUSA. These products could be cured by various methods, i.e., heat (thermoset) UV light (OTA-480) or chemical (catalytic) reaction (epoxy).

Counsel for the importer indicates that OTA 480 is a chemically defined compound consisting of essentially 7 compounds, all formed simultaneously as co-products in the same chemical reaction. Counsel notes that only 34 percent of these compounds is the desirable product and that the product should be considered as a separately chemically defined compound based thereon. The remaining 66 percent of the product is stated to be undesirable byproducts or impurities which have an adverse effect on the physical properties of the finished polymer and are not intended for a specific purpose. Counsel also notes that repeating monomer units, typical of a prepolymer, occur in only 28 percent of the product, a portion which is only 7 percent by - 3 -
weight of the final product. Based on the above, counsel suggests that classification in subheading 2916.12.5000, HTSUSA, is appropriate. Alternatively, It suggests, without detailed argument, that the product should be classified in subheading 3823.90.5000, HTSUSA, as a mixture of polyethylene glycols.

After consideration of the information and documentation submitted by counsel, we note that the essence of the importer's position is that the ingredients which are unwanted because they do not form the optimal form of the propoxylate for cross linking are impurities. It is claimed that these impurities are dysfunctional and not the best form of the propoxylate for the purposes of cross linking. We, however, note that the stated "impurities" react with the polymer chains during the curing process and become part of the final cross-linked polymer. They obviously give the final product a number of properties, whether good, bad, or not as good as it could be. In other words these items have a definite influence on the physical properties of the final product. Therefore, we do not agree that these ingredients which are actively involved in the chemical and physical aspects of the OTA 480 can be characterized as "impurities." In this regard they are dissimilar to "impurities" otherwise noted in the Explanatory Notes to the Harmonized System (EN), e.g., Chapter 25. The product must be looked at as a whole, including the main ingredients and six lesser ingredients.

We do not agree with a technical expert for the importer that the Scientific Sub-Committee (SC) of the World Customs Organization has given a very broad scope to the term "impurities." While no definitive allowable percentages of "impurities" exists for separate chemically defined compounds, we believe that it is clear at both the international level and the domestic level that such products should only have minor amounts of impurities. Normally a product that is less than 90 percent pure would not be classifiable in chapter 29, HTSUSA, since, as the amount of impurities increase, the influence of their characteristics on the primary compound also increase. Impurities above that level are, as in the instant case, more likely to become a functional part of the mixture. We find it extremely difficult to agree with the argument that 66 percent of an expensive separate chemically defined chemical compound is incidentally present. Particularly, since these "impurities" cross-link into the final plastic and attached to the polymer. The properties added by these large amounts of "impurities" may - 4 -
be somewhat less than what is wanted but they have a direct impact on the properties of the cross-linked plastic. Accordingly, we believe that the suggested classification in subheading 2916.12.5000, HTSUSA, is not appropriate.

We understand that the product contains repeating units and is designed to be transformed into a higher molecular weight polymer through further polymerization or curing. Thus the products meets the Chapter 39 definition of a prepolymer. While the most desirable portion of the product does not, as indicated by counsel, have repeating units, we find no basis for ignoring ingredients that form 66 percent of the product. The number of repeating units is averaged over the entire product and not just the repeating chain. Thus, as in the instant case the repeating unit number may be relatively low, i.e., less than 2. This is consistent with General Note (e) to heading 39.01 to 39.11 of the EN which provides that prepolymers are products which are characterized by some repetition of monomer units.

We have concluded that the product is properly classifiable as a prepolymer. Based thereon, we find it unnecessary to address a suggested alternate classification of chapter 38, HTSUSA.

HOLDING:

A product formed by a chemical reaction which produces glycerol propoxylate and a further reaction with acrylic acid to form an acrylic modified polyether polyol, is considered a prepolymer and is classifiable in subheading 3907.20.0000, HTSUSA, which provides for other polyethers in primary form. Merchandise so classifiable is subject to a general rate of duty of 1.8 cents per kilogram and 7.5 percent ad valorem.

Since the rate if duty under the classification indicated above is more than the liquidated rate, you are instructed to deny the protest in full.

A copy of this ruling should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

In accordance with Section 3A(1)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest - 5 -

Directive, this decision should be provided by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to the mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Tariff Classification

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