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HQ 959099





May 1, 1998

CLA-2 RR:CR:GC 959099 ptl

CATEGORY: CLASSIFICATION

TARIFF NO.: 3823.90.50/3823.90.27

Area Director of Customs
New York - JFK Area
Bldg #77
Jamaica, NY 11430

RE: IA 60/95; Ginkgo Biloba (Dimeric) Biflavonoid PHYTOSOME , Ginkgo Biloba PHYTOSOME , and Escin/ -sitosterol PHYTOSOME .

Dear Area Director:

This is in response to your memorandum of November 14, 1995 (CLA-2-K:TC:A2 KC), forwarding a request for Internal Advice (IA 60/95) submitted by counsel for Lipo Chemicals, Inc., concerning the classification of the above products under the Harmonized Tariff Schedule of the United States (HTSUS). Because all entries which are the subject of this Internal Advice were made in 1994, references in this decision will be to the 1994 HTSUS.

FACTS:

Ginkgo Biloba Dimeric Biflavonoid PHYTOSOME , Ginkgo Biloba PHYTOSOME , and Escin/ -sitosterol PHYTOSOME are all preparations imported to be used in cosmetics. The merchandise was invoiced as botanical extracts and entered in subheading 1211.90.8090, HTSUS, as other plants or parts of plants of a kind used primarily in perfumery, fresh or dried, whether or not cut, crushed or powdered: other: other: other. Customs classified the Ginkgo products under the provision for other chemical products and preparations of the chemical or allied industries, not elsewhere specified or included; other mixtures containing 5 percent or more by weight of aromatic or modified aromatic substances: other, in subheading 3823.90.2700, HTSUS. The Escin/ -sitosterol PHYTOSOME was classified under the provision for other chemical products and preparations of the chemical or allied industries, not elsewhere specified or included; other: other: other, in subheading 3823.90.5050, HTSUS.

In addition to arguing in support of the invoiced classification offered by the importer, counsel for the importer is proposing three additional, alternative classifications for the merchandise.

If Customs does not agree that the articles should be classified in heading 1302, HTSUS, as vegetable saps and extracts, counsel's next alternative classification is in heading 3003, HTSUS, as a medicament. Should that heading be improper, counsel suggests that the articles be classified in heading 2938, HTSUS, which provides for "Glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives:"

ISSUE:

Whether the merchandise is classifiable under the provision for other plants or parts of plants of a kind used primarily in perfumery, fresh or dried, whether or not cut, crushed or powdered, other in subheading 1211.90.8090, HTSUS, or as other vegetable saps and extracts; pectin substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products; other vegetable saps and extracts, in subheading 1302.19.9040, HTSUS, or alternatively in heading 3003 or 3004, HTSUS, as medicaments or products having therapeutic or prophylactic uses; or heading 2938, HTSUS, for glycosides; or as chemical products and chemical or other preparations in heading 3823, HTSUS?

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS 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 GRIs may then be applied in order.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, 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 following headings are under consideration:

1211 Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purposes, fresh or dried, whether or not cut, crushed or powdered:
1211.90 Other:

1211.90.80 Other
1211.90.8090 Other.

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:
Ginseng; substances having anesthetic, prophylactic or therapeutic properties:
1302.19.40 Other.

2938 Glycosides, natural or reproduced by synthesis, and their salts, ethers, esters and other derivatives.

2938.90.00 Other.

3003 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packages for retail sale:
3003.90.00 Other.

3823 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical and allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included:

3823.90 Other.

Other.
Mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances:
3823.90.2700 Other.

3823.90.5000 Other.

3823.90.5050 Other.

At the time of importation, the importer claimed the products were classified in heading 1211, HTSUS, other plants or parts of plants of a kind used in perfumery, in pharmacy or similar purposes. Because EN 12.11 states that "... the heading excludes such products consisting of plants or parts of plants ... of different species ... or consisting of plants or parts of plants of a single or different species mixed with other substances, such as one or more plant extracts..." this classification was rejected.

The first alternative offered by counsel is in heading 1302, HTSUS, as vegetable extracts. Counsel asserts that the ENs to heading 1302 allow for extracts of this type to be classifiable under this heading, even if they are combined with inert substances. Counsel also contends that the fact that the extraction process results in a high level of purity does not remove it from this classification. It is further argued that GRI 2(b), allows for mixtures of this type to be classifiable in heading 1302, HTSUS, because, it is claimed, that one of the components of the Phytosome (the extract) is referred to in the heading of chapter 13.

The manufacturer's materials provided by counsel claim that the leaves of the Gingko biloba L. contain a complex mixture of flavonoids and terpenes which are primarily responsible for its pharmacological activity. In the PHYTOSOME form, they are described as an original complex between the purified flavonoids extracted from the gingko leaves and soybean phospholipids. The Gingko Biloba PHYTOSOME is used in cosmetic gels and emulsions. The extract is also said to be sold in tablet or solution form, as the flavonoids are claimed to be used in the treatment of vascular disease, and are said to possess vasokinetic/vasomotor properties. A production flowchart for the Gingko Biloba products shows that the Gingko Biloba leaves are ground, then go through an acetone-water extraction and several concentration, filtration, and dilution processes before being dried, milled, mixed and sieved.

The manufacturer's materials in regard to Escin/ -sitosterol PHYTOSOME , describe it as a ternary complex among Escin/ -sitosterol and soybean phospholipids. The Phytosome molecule is said to be a chemical which enhances the effectiveness of Escin on the skin. It is said to be normally used in gels and emulsions. A production flowchart shows that Escin is dissolved in ethyl acetate containing soybean phospholipids plus -sitosterol. The mixture is then heated, with the concentration yielding a soft extract, which is then dried, milled, mixed and sieved to arrive at the final product.

The Gingko Biloba PHYTOSOME molecule is a chemical complex of the gingko flavonoids and the phospholipids. This complex is claimed to enhance the functionality of the flavonoids, which are aromatics, resulting in a product which is longer lasting, thus increasing its effectiveness on the skin.

The ENs to heading 1302 state that 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. The ENs go on to state that extracts may be simple or compound. Simple extracts are obtained by the treatment of only one variety of plant. The vegetable extracts of this heading are generally raw materials for various manufactured products. It is pointed out that the extracts are excluded from this heading when, because of the addition of other substances, they have the character of food preparations, medicaments, etc.

As pointed out in the ENs to heading 1302, what is covered in the heading are vegetable products obtained by natural exudation or by incision or by solvent extraction. The products in this case are the result of far more than simple processing. They go through several extractions, refining processes, and even centrifugation. The Gingko products are mixtures of flavonoids and soybean phospholipids. The Escin/ -sitosterol PHYTOSOME product is a mixture of saponin, -sitosterol and phospholipids. In other words, the products cannot be classified in heading 1302 as extracts or mixtures of extracts. They are formulated products far advanced from the extracts which would be classified in chapter 13.

The next alternative proposed by counsel is that classification in chapter 30, HTSUS, (medicaments) is appropriate because, it is asserted, the extracts found in PHYTOSOME have been recognized to exhibit anesthetic, prophylactic or therapeutic properties. Escin, as well as the Gingko products, are also said to exhibit such prophylactic or therapeutic properties.

We are unable to find a basis for classifying these products in chapter 30, HTSUS. There is no convincing proof that any of these products are either prophylactic or therapeutic in nature. The producer mentions that the gingko extract is useful for the health food market. However, this is not sufficient for the products to be considered medicaments, or to endow them with therapeutic or prophylactic properties. In the materials submitted by counsel, the products are described as being a base which is used as a part of a final product. While these products may be considered to enhance the effectiveness of the final product, they do not treat or prevent any symptom or condition. As such, they do not have the characteristics which are necessary for classification in chapter 30.

Another possible classification for the articles suggested by counsel is in heading 2938, HTSUS, for glycosides, on the basis of GRI 3(c). GRI 3(c) provides that, in the case of goods classifiable under two or more headings which cannot be classified by reference to GRI 3(a) or 3 (b), the goods will be classified under the heading which occurs last in numerical order among those which equally merit consideration.

As to the question of classification as a glycoside in heading 2938, HTSUS, the ENs to that heading state that "This heading also covers natural mixtures of glycosides and their derivatives (e.g., a natural mixture of digitalis glycosides containing purpurea glycosides A and B, digitoxin, gitoxin, gitaloxin, etc. ); but deliberate intermixtures or preparations are excluded." (Emphasis in the original) As has been pointed out, the products here - Phytosomes - are formulated preparations, mixtures of the particular extract, flavonoids and soybean phospholipids. As such, they are deliberate mixtures of far more than vegetable extracts and are not eligible for classification in heading 2938.

HOLDING:

Gingko Biloba (Dimeric) Bioflavonoid PHYTOSOME and Gingko Biloba PHYTOSOME are mixtures of flavonoids and soybean phospholipids and are classified in the provision 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; residual products of the chemical or allied industries, not elsewhere specified or included: other: other: mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: other, in subheading 3823.90.27, HTSUS (subheading 3824.90.28 in 1998).

Escin/ -sitosterol PHYTOSOME , a mixture of Saponin, -sitosterol and soybean phospholipids, is classified in the provision 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; residual products of the chemical or allied industries, not elsewhere specified or included: other: other: mixtures containing 5 percent or more by weight of one or more aromatic or modified aromatic substances: other: other: other: other: other: other, in subheading 3823.90.5050, HTSUS (subheading 3824.90.50 in 1998).

You should mail this decision to the internal advice applicant, through its counsel, no later than 60 days from the date of this letter. On that date 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 to the public via the Diskette Subscription service, the Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division


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