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HQ 956269

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May 31, 1995

CLA-2 R:C:F 956269 ASM

CATEGORY: CLASSIFICATION

TARIFF NO: 1901.90.4200; 2106.90.9999

Ms. Averill Boyland
102B Chapel
Tauranga, New Zealand

RE: Tariff Classification of Whey-Based Foods

Dear Ms. Boyland:

This letter is in response to your request for a ruling on the tariff classification of whey-based foods.

FACTS:

A tariff classification ruling has been requested for four food preparations, products of New Zealand. All are dry mixes, three of which are to be combined with water, the fourth to be mixed with the reconstituted form of one of the first three. Ingredients breakdowns were provided, as well as weight per unit.

ISSUE:

What is the proper classification under the Harmonized Tariff Schedule of the United States Annotated of the subject whey-based products?

LAW AND ANALYSIS:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), is made in accordance with the General Rules of Interpretation (GRI's). The systematic detail of the harmonized system is such that virtually all 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 GRI's may then be applied. The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN's), which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI's. - 2 -

The product "Pritikin Way Plain" is described as a powder consisting of 44 percent whey powder, 22 percent maltodextrin, 14 percent vegetable fat, 9.5 percent sodium caseinate, and unstated quantities of dextrose, emulsifiers, vegetable gums, free-flow agents, vitamins, minerals, and antioxidant, presented in 2 kg plastic bags. "Chocolite" powder contains 41.5 percent whey powder, 20.5 percent maltodextrin, 13.5 percent vegetable fat, 7.9 percent sodium caseinate, 7 percent cocoa powder, and unstated amounts of dextrose, vegetable gum, flavors, emulsifiers, aspartame, free-flow agents, vitamins, minerals, and antioxidant. presented in 1.7 kg bags. "Strawberrylite" is a powder composed of 43 percent whey powder, 21.5 percent maltodextrin, 14 percent vegetable fat, 9.5 percent sodium caseinate, and unstated quantities of dextrose, flavors, colors, emulsifiers, aspartame, vegetable gums, free-flow agents, vitamins, minerals, and antioxidant, presented in 1.7 kg plastic bags. These three products are to be mixed with water. "Yolite" is a powder composed of corn starch, acacia gum, malic and citric acid, soybean oil, lactobacillus acidophilis, aspartame, xanthan gum, and, for the fruit flavored varieties, dried fruit pulp and natural flavorings. When added to 200 milliliters of "Pritikin Way," "Yolite" results in a reduced calorie yogurt substitute.

The principal ingredient (41.5 to 44 percent, by weight) in "Pritikin Way Plain, Chocolite, and Strawberrylite," is whey powder, a dairy product which is itself provided for in heading 0404, HTSUSA. However, while heading 0404 permits the presence of sugar or other sweetening matter, and the EN's allow only small quantities of other additives (natural milk constituents, stabilizing agents, antioxidants, vitamins, anticaking agents), a food preparation merely based on the dairy ingredient and containing substances not allowed in the chapter, must be classified elsewhere (See EN's, pp. 29-30, 31-32). Such products are directed to chapter 19, specifically, heading 1901. These three mixes contain such non-permitted additives as vegetable fat, sodium caseinate, vegetable gums, emulsifiers, flavorings, and colorings and cannot be classified in chapter 4.

Heading 1901, HTSUSA, in relevant part, provides for food preparations of goods of headings 0401 to 0404, not containing cocoa powder or containing cocoa powder in a proportion by weight of less than 10 percent, not elsewhere specified or included. Among the products to be classified here are those products of chapter 4 which, as a result of the addition of other ingredients, are excluded from headings 0401 to 0404. The EN's specifically note that heading 1901 includes "Preparations in powder...form used as infant food or for dietetic purposes and consisting of milk to which secondary ingredients...have been added" (EN's, p. 141). Thus, the three mixes, "Pritikin Way Plain, Chocolite, and Strawberrylite" properly fall in heading 1901, HTSUSA.

The classification of "Pritikin Way Plain, Chocolite, and Strawberrylite" at the subheading level is dependent upon the method of packaging. If the mixes are packed in retail containers, the applicable subheading will be 1901.90.9095, HTSUSA. However, if the mixes are packed in non- retail units, they will fall in subheading 1901.90.4200, HTSUSA. In accordance with the HTSUSA, a retail unit is that which is put-up for sale to the ultimate purchaser in the identical form in which it has been imported into the U.S. Based upon the information provided to this office, it appears that the product will be packaged in non-retail containers, i.e., 25 kg multi-wall bags with plastic links to be packed and labelled in the United States. However, it appears that the method of packaging has not yet been finally determined.

Assuming importation of these products in non-retail units, classification under subhheading 1901.90.4200, HTSUSA, requires that the mixes be entered pursuant to U.S. note 10, chapter 4, HTSUSA, which states:

The aggregate quantity of dairy products described in additional U.S. note 1 to chapter 4, entered under subheadings ... 1901.90.42, ... in any calendar year shall not exceed 1,905,000 kilograms ... .

Thus, classification of "Pritikin Way Plain, Chocolite, and Strawberrylite" under subheading 1901.90.4200, HTSUSA, will depend upon availability for the aggregate quantity of dairy products at the time of importation into the United States.

If, at the time of importation, there is no availability for importation of these products under subheading 1901.90.4200, HTSUSA, the products will be classified pursuant to 1901.90.4300, HTSUSA. It must be noted, however, that subheading 1901.90.4300, HTSUSA, is also subject to subheadings 9904.04.50 - 9904.05.01, HTSUSA, which provide for the imposition of additional duties based upon either the value or quantity of goods imported into the U.S. for certain agricultural products (see U.S. note 1, subchapter IV, chapter 99).

The fourth product, "Yolite," is a powder which, when added to the reconstituted "Pritikin Way Plain," produces a low-calorie yogurt substitute. The principle ingredients in this product are those substances which provide the thickening properties to the liquid into which it has been added - corn starch and vegetable (acacia, or arabic) and synthetic (xanthan) gums. In the three "Yolite" flavors, the quantity of starch ranges from 39 to 42 percent, and gums from 31 to 33 percent, by weight.

Heading 1901, HTSUSA, in relevant part, provides for food preparations of flour, meal, starch, or malt extract. The EN's at p. 140, state that such products are those "which derive their essential character from such materials, whether or not these ingredients predominate by weight or volume." The product, "Yolite" has a significant quantity (39 to 42 percent) of vegetable and synthetic gums which suggests that the food's essential character is not imparted by the cornstarch. Thus, "Yolite" cannot be classified in heading 1901 and can only be properly classified in subheading 2106.90.9999, HTSUSA, as a food preparation not elsewhere specified or included.

HOLDING:

The products, "Pritikin Way Plain, Chocolite, and Strawberrylite," if imported in non-retail units of 25 kg multi-wall bags with plastic links, are properly classified in subheading 1901.90.4200, HTSUSA, dutiable under the general column one rate of duty at 16 percent ad valorem. However, at the time of importation of these products into the U.S., if there is no availability for importation under subheading 1901.90.4200, HTSUSA, they would be properly classifiable under subheading 1901.90.4300, HTSUSA, dutiable under the general column one rate of duty at $1.187/kg plus 15.6 percent ad valorem, and may be subject to the imposition of additional duties pursuant to subheadings 9904.04.50 - 9904.05.01, HTSUSA. If these products are imported in retail units, they are classifiable under subheading 1901.90.9095, HTSUSA, which are dutiable under the general column one rate of 9.4 percent ad valorem.

The product "Yolite" is classified in subheading 2106.90.9999, HTSUSA, which is dutiable at 9.4 percent ad valorem, under the general column one rate of duty.

Sincerely,

John Durant, Director
Commercial Rulings Division

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See also:

• Tariff No.: 1901.90.42 - Dairy preps o/10% by wt of milk solids (descr. in add US note 1 to Ch. 4), neosi, subject to add US note 10 to Ch.4
• Tariff No.: 1901.90.43 - Dairy preps o/10% by wt of milk solids (descr. in add US note 1 to Ch. 4), neosi, not subject to gen note 15 or add US note 10 to Ch.4
• Tariff No.: 1901.90.90 - Flour-, meal-, starch-, malt extract- or dairy-based food preps not containing cocoa and not containing specific amounts of dairy, nesoi
• Tariff No.: 2106.90.99 - Food preparations not elsewhere specified or included, not canned or frozen
• Tariff No.: 9904.04.50 - Dairy prod. in 0402.29.50 & .99.90, 0403.10.50 & .90.95, 1901.10.40 & .85, & 2202.90.28, entered value safe. period, under $0.65/kg
• Tariff No.: 9904.05.01 - Dairy prod. in Ch. 4 addl US note 1, in 2202.90.28 entered in quantity safeguard period