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NY N021685





January 18, 2008

CLA-2-04:OT:RR:NC:SP:231

CATEGORY: CLASSIFICATION

TARIFF NO.: 0405.20.4000

Mr. Michael E. Roll
Pisani & Roll, PLLC
1875 Century Park East, Suite 600
Los Angeles, CA 90067

RE: The tariff classification of “light dairy spreads” from New Zealand or Australia.

Dear Mr. Roll:

In your letter dated January 8, 2008, you requested a tariff classification ruling on behalf of your client, Fonterra (USA), Inc.

The items in question are identified as two versions of “Light Dairy Spread” (“LDS”), which are said to be spreadable emulsions of the water-in-oil type containing between 39% milk fat and less than 45% milk fat. For LDS “A”, the milk fat will be derived from one or a combination of anhydrous milk fat, butter or cream. The product will also contain up to 10% of non-fat dairy solids derived from one or a combination of cream, milk, skim milk, buttermilk, ultrafiltered milk or caseinate. The product may contain up to 3% non-dairy solids including salt, stabilizers, emulsifiers, food acid and flavoring. The moisture content will be between 42% and 55% based on the specific level and combination of non-fat dairy and non-dairy components. The mixture of ingredients will be subjected to high shear and cooling to promote fat crystallization and the formation of the water-in-oil emulsion. The product will be packed in either 25-kg polyethylene-lined cardboard cartons or 1000-kg bulk totes.

For LDS “B”, the milk fat will be derived from cream without the addition of any other dairy or non-dairy components. The product will contain between 5% and 6% of non-fat dairy solids, also derived from cream. The moisture content will be between 50% and 55%. The cream will be subjected to high shear and cooling to promote fat crystallization and the formation of the water-in-oil emulsion. LDS “B”, which will be frozen to maintain quality during storage and shipment, will be packed in either 25-kg polyethylene cardboard cartons or 1000-kg bulk totes.

You have provided the following table, which outlines the composition of both products, including the minimum and maximum limits:

Range
Milk Fat 39.0% 45.0% 44.0% 44.0%
Non-fat Solids 0.0% 10.0% 7.0% 5.2%
Non-dairy* 0.0% 3.0% <2.0% 0.0%
Water 42.0% 55.0% 47.0% 50.8%
Total n/a n/a 100.0% 100.0%

* Non-dairy includes salt (up to 1.5%), stabilizers (including one or a combination of guar gum, carrageenan, xanthan, starch, pectin or other permitted stabilizers) and emulsifiers (including one or a combination of mono and diglycerides, lecithin and other permitted emulsifiers, food acids and flavors).

You also state the following with regard to this merchandise:

The LDS products are specifically formulated for use as a replacement for standard butter with reduced caloric content. They may be used as ingredients for a range of product applications where it can replace butter. It is suitable as an ingredient in applications such as spreads, ice cream, dips and sauces, confections and baked goods. The LDS at issue can, in most cases, lower the overall fat content in a product and still provide the same or improved functionality and flavor.

The LDS products at issue have an excellent shelf life and maintain their fresh flavor well. Due to the increased content of milk solids non-fat, the LDS products have a very creamy flavor. This also enables greater browning and flavor devel- opment with a reduced level of fat.

Based on information you have submitted, it is our understanding that in commercial practice these LDS products actually take the place of butter, in a one-to-one substitution, in recipes followed by manufacturers of various food items.

The applicable subheading for both versions of the LDS (“A” and “B”) will be 0405.20.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for butter and other fats and oils derived from milk; dairy spreads: dairy spreads: butter substitutes, whether in liquid or solid state: other than containing over 45 percent by weight of butterfat. The general rate of duty will be 13.1 cents per kilogram.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

Importations of milk and milk products are subject to 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 location:

Food and Drug Administration
Division of Import Operations and Policy
5600 Fishers Lane
Rockville, MD 20857
Telephone (301) 443-6553

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

U.S. Department of Agriculture (USDA)
APHIS, VS, NCIE
Products Program
4700 River Road, Unit 40
Riverdale, MD 20737-1231
Telephone: (301) 734-3277

This merchandise is subject to The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which is regulated by the Food and Drug Administration (FDA). Information on the Bioterrorism Act can be obtained by calling FDA at 301-575-0156, or at the Web site www.fda.gov/oc/bioterrorism/bioact.html.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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 Nathan Rosenstein at 646-733-3030.

Sincerely,

Robert B. Swierupski
Director,

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