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NY H85634




December 5, 2001

CLA-2-04:RR:NC:2:231 H85634

CATEGORY: CLASSIFICATION

TARIFF NO.: 0404.90.3000; 0404.90.5000

Mr. Louis Shoichet, Esq.
Tompkins and Davidson, LLP
One Astor Plaza
New York, NY 10036-8901

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of an ultrafiltered milk product from Canada; Article 509

Dear Mr. Shoichet:

In your letter, dated November 2, 2001, on behalf of your client, Douwe Egberts Coffee Systems (DECS), a division of the Sara Lee Corporation, Itasca, IL, you requested a ruling on the status of an ultrafiltered milk product from Canada under the NAFTA.

The merchandise is an ultrafiltered milk product that is designed to be used with the Cafitesse® Coffee Beverage System (CCBS). CCBS combines a liquid coffee concentrate product with the ultrafiltered milk product to make portion-controlled cups of cappuccino or latté beverages. Your client will purchase the milk product from Natrel, Inc., a Canadian producer.

The ultrafiltered milk product will be produced from raw milk of Canadian origin, and it will be collected at Canadian farms. The milk will be stored at a temperature of 39o-43o Fahrenheit (4o-6o Centigrade), and it will be collected for shipment to Natrel. At the dairy, the milk will be standardized for fat content at a temperature of 122o-140o Fahrenheit (50o-60o Centigrade) for 10-20 seconds. Then the milk will be pasteurized in a high temperature, short time (HTST) process at 167o Fahrenheit (75o Centigrade) for 15 seconds. Immediately following initial pasteurization, the milk will be ultrafiltrated at a temperature of 122o Fahrenheit (50o Centigrade) and standardized for a specified dry matter and fat level.

The product will be produced by means of an ultrafiltration process wherein the milk is pumped into membrane tubes under high pressure. The membrane used is semi-permeable for water and for small molecules (including lactose and some minerals). The pressure used during the ultrafiltration process is controlled to reach the specified concentration of the retentate. After ultrafiltration, commercially obtained lactose of Canadian origin is added back to the retentate.

The milk product is then ultra-pasteurized at a temperature of 284o Fahrenheit (140o Centigrade) for a period of 6.2 seconds. The ultra-pasteurization process results in an F-value of 8.21. Finally, the product is aseptically chilled and stored at 39o Fahrenheit (4o Centigrade).

After processing, the milk product will contain 28 percent total solids, 12 percent lactose, 9 percent protein, 6-8 percent milk fat, and 1 percent minerals (e.g., calcium).

Following pasteurization and ultrafiltration, the product will be packaged in airtight, sterilized, two liter bags equipped with a patented doser that permits the in-line mixing of the milk product with the concentrated coffee. The bag is placed in a two liter, paper carton that has been wrapped in foil (to keep moisture out of the box). It is kept refrigerated until used in the Cafitesse® Coffee Beverage System.

In your correspondence you indicate that the merchandise will be produced entirely in Canada from raw milk of Canadian origin and Canadian produced lactose (an added ingredient).

The applicable subheading for the ultrafiltered milk product, if entered under quota, will be 0404.90.3000, Harmonized Tariff Schedule of the United States (HTS), which provides for whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included, other, other, dairy products described in additional U.S. note 1 to chapter 4, described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions. The general rate of duty will be 14.5 percent ad valorem. In 2002 the rate of duty will remain the same.

The applicable subheading for the ultrafiltered milk product, if entered outside the quota, will be 0404.90.5000, HTS, which provides for whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included, other, other, dairy products described in additional U.S. note 1 to chapter 4, other. The general rate of duty will be $1.189 per kilogram, plus 8.5 percent ad valorem. In 2002 the rate of duty will remain the same. In addition, products classified in subheading 0404.90.5000, HTS, are subject to additional safeguard duties based on their value, as described in subheadings 9904.04.50 – 9904.05.01, subchapter IV, chapter 99. However, U.S. Note 1 to subchapter IV in chapter 99 states, “Goods of Canada or Mexico imported into the United States shall not be subject to any of the provisions, duties or limitations of this subchapter.” Accordingly, if a product of Canada, the safeguard duties will not apply.

Products classifiable in subheading 0404.90.3000, HTS, being wholly obtained or produced entirely in the territory of Canada, will meet the requirements of HTSUSA General Note 12(b)(i), and will therefore by entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

Importations of milk and milk products are subject to import regulations administered by various U.S. agencies. Requests for information regarding applicable regulations administered by the U.S. Food and Drug Administration may be addressed to that agency at the following locations:

U.S. Food and Drug Administration
Division of Regulatory Guidance
HFF 314, 200 C Street, S.W.
Washington, DC 20204

Requests for information regarding applicable regulations administered by the U.S. Department of Agriculture may be addressed to that agency at the following location:

A.P.H.I.S., Veterinary Services
Federal Building, Room 756
6505 Belcrest Road
Hyattsville, MD 20782

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR 181).

This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Thomas Brady at (646) 733-3030.

Sincerely,

Robert B. Swierupski
Director

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