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HQ 965292




June 17, 2002

CLA-2 RR:CR:GC 965292AM

CATEGORY: CLASSIFICATION

TARIFF NO.: 3404.90 50

Port Director
U.S. Customs Service
2350 N. Sam Houston Parkway East, Suite 1000 Houston, TX 77032

RE: Protest 5301-01-100159; Armoslip® CP and 18LF

Dear Port Director:

This is our decision on Protest 5301-01-100159, timely filed by counsel on behalf of AKZO Nobel Polymer Chemicals LLC, on June 1, 2001, against your decision in the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of Armoslip® CP and Armoslip® 18LF. We have also considered submissions dated May 16 and 24, 2002.

FACTS:

Armoslip® CP, CAS 301-02-0, and Armoslip® 18LF, CAS 124-56-5, are long-chain fatty acid amide products in bead form. Armoslip® CP has a dropping point of 71º C, and viscosity of 15 cP at 90º C. The merchandise is made from a tallow fatty acid mixture containing a high concentration of mono-unsaturated C18 oleic acid. The merchandise is used as a slip agent for polyolefin products. It modifies the surface properties of polyolefin films by reducing the friction such that the sheets of plastic films slip over one another during their manufacture and processing.

Armoslip® 18LF has a dropping point of 99º C and viscosity of 11cP at 109º C. The merchandise is made from stearic acid obtained from palm oil. The merchandise is used as an antiblocking agent used in polyolefins, PVC and polyvinyledene chloride resins. It facilitates over-printing and wet-printing when incorporated into ink formulations and may also be used in adhesives, vinyl coatings, in ethylene vinyl acetate copolymers, as a defoamer in paper manufacture and as a dye solubilizer.

Customs laboratory report NY20020208, dated March 18, 2002, states, in pertinent part, "[T]he sample, stated to be Armoslip® CF (sic), is a fatty amide (acyclic) of approximately 80% purity. The sample is an organic product of a waxy character. . . ." Customs laboratory report NY20020209, dated March 18, 2002 states, in pertinent part, "[T]he sample, stated to be Armoslip® 18LF, is a fatty amide (acyclic) of approximately less than 85% purity. The sample is an organic product of a waxy character. . . . "

Counsel submits a confidential product breakdown which states that Armoslip CP contains over 90% oleamide (a specific C18 mono-unsaturated fatty acid amide) and Armoslip 18LF contains over 95% stearamide (a specific C18 saturated fatty acid amide). Counsel also states that the remaining lower molecular weight fatty acid amides are deliberately left in their products with a view to rendering them specifically suitable as slip agents. These lower molecular weight amides tend to "bloom" to the surface more rapidly giving sustained slip and antiblocking effects on the polyolefins.

New York Ruling Letter (NY) 866983, October 24, 1991, classified Crodamide OR and Crodamide SR, among other products from Croda Universal, Inc., protestant's competitor, in subheading 3404.90.50, HTSUS, the provision for “[A]rtificial waxes and prepared waxes: [O]ther: [O]ther.” The Crodamide products have the same CAS numbers as the instant merchandise. Customs laboratory reports 2-1991-31511 and 2-1991-31513, dated October 8, 1991, with regards to Crodamide OR and Crodamide SR respectively, both state, in pertinent part, that the samples are a “a mixture of fatty amides[that] meets the definition of HTS Chapter 34 Note 5 definition for 'artificial waxes and prepared waxes'”. The ruling described the merchandise as "artificial amide waxes derived from natural fats and oils, and, are primarily used to modify the surface properties of plastics. Some may be used as a mould release agent for a wide range of polymers and for rubber articles. In inks they are used to improve slip properties and in lubricating oils as a lubricant additive."

Protestant entered the merchandise on June 5, 2000, under subheading 3404.90.50, HTSUS, the provision for “[A]rtificial waxes and prepared waxes: [O]ther: [O]ther.” The entry was liquidated on April 20, 2001, under subheading 2924.10.10, HTSUS, the provision for “[C]arboxyamide-function compounds; amide-function compounds of carbonic acid: Acyclic amides (including acyclic carbamates) and their derivatives; salts thereof: Amides.” The protest was timely filed on June 1, 2001.

ISSUE:

Whether Armoslip® CP and 18LF are separate chemically defined compounds?

LAW AND ANALYSIS:

Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context, which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to the GRIs.

In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).

The HTSUS headings under consideration are the following:

2924 Carboxyamide-function compounds; amide-function compounds of carbonic acid:

[A]rtificial waxes and prepared waxes:

Chapter 29, note 1(a) states that " . . . the headings of this chapter apply only to separate chemically defined organic compounds, whether or not containing impurities." The EN's to Chapter 29 state, in pertinent part, the following:

(A) Chemically defined compounds

(Chapter Note 1)

Separate chemically defined compounds containing other substances deliberately added during or after their manufacture (including purification) are excluded from this Chapter. Accordingly, a product consisting of saccharin mixed with lactose, for example, to render the product suitable for use as a sweetening agent is excluded (see Explanatory Note to heading 29.25).

The separate chemically defined compounds of this Chapter may contain impurities (Note 1a)). . . . .

The term “impurities” applies exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). The substances may result from any of the factors involved in the process and are principally the following:

(a) Unconverted starting materials.

(b) Impurities present in the starting materials.

(c) Reagents used in the manufacturing process (including purification).

(d) By-products.

It should be noted, however, that such substances are not in all cases regarded as “impurities” permitted under Note 1 (a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use, they are not regarded as permissible impurities. For example, a product consisting of methyl acetate with methanol deliberately left in with a view to improving its suitability as a solvent is excluded (heading 38.14). . . .

Chapter 34, note 5 defines the expression "artificial waxes and prepared waxes" to include, inter alia, "chemically produced organic products of a waxy character, whether or not water-soluble." EN 34.04 further expounds that these waxes contain relatively high molecular weight organic substances and are not separate chemically defined compounds. Furthermore, these waxes must have: "(1)a dropping point above 40°C; and (2) a viscosity, when measured by rotational viscometry, not exceeding 10 Pa.s (or 10,000 cP) at a temperature of 10°C above their dropping point." The EN reiterates that the heading does not cover "separate chemically defined organic compounds (Chapter 29)."

If the subject merchandise is a separate chemically defined compound of Chapter 29, it is excluded from classification in heading 3404, HTSUS. As defined in Chapter 29, a separate chemically defined compound may contain impurities. We note that there is a discrepancy in Protestant's description of the purity of the product and Customs Laboratory description. It is Customs’ practice not to disregard the reports of Customs laboratories. See Customs Directive 099-3820-002, issued May 4, 1992; see also Consolidated Cork Corp. v. United States, 54 Cust. Ct. 83, C.D. 2512 (1965). Nevertheless, we must determine if the other varying carbon chain length amides are impurities in the substance. Although helpful in making this determination, the percentage of impurity is not dispositive. For instance, in HQ 960995, dated March 12, 2001, Customs classified a separate chemically defined compound containing 3-8% byproduct of the manufacturing process in Chapter 29, HTSUS. However, in HQ 965089, dated January 31, 2002, we classified a separately chemically defined compound with less than 5% of a substance deliberately left in the product with a view to rendering it suitable for a specific use, in heading 3824, HTSUS, as a chemical mixture.

First, the varying carbon chain length amides in the product are present in the starting materials. They are deliberately left in the product with a view to rendering it more suitable for the specific use as a slip agent. Hence, the impurities are not permissible under the ENs to Chapter 29, HTSUS, set forth above. Therefore, the instant merchandise can not be considered a separate chemically defined compound and is not classifiable in heading 2924, HTSUS.

As stated in the facts, Armoslip® CP has a dropping point of 71º C, and viscosity of 15 cP at 90º C. Armoslip® 18LF has a dropping point of 99º C and viscosity of 11cP at 109º C. The instant merchandise is chemically produced organic products of a waxy character with dropping points and viscosities within the criteria cited in EN 34.04 for a wax.

Lastly, Protestant cites NY 866983 for the proposition that Armoslip® CP and Armoslip® 18LF are classified in heading 3404, HTSUS. After reviewing the ruling in that case, it appears that the products specified therein are the same in all material aspects as the instant merchandise. Taken together, the instant goods fall within the meaning of artificial waxes and prepared waxes of heading 3404, HTSUS.

HOLDING:

Armoslip® CP and Armoslip® 18LF are classified in subheading 3404.90.50, HTSUS, the provision for “[A]rtificial waxes and prepared waxes: [O]ther: [O]ther.” The protest should be ALLOWED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John A. Durant, Director

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