CLA-2 OT:RR:CTF:TCM H269530 CkG
TARIFF NO: 1806.32.90
Ms. Pamala Sturhan
U.S. Foreign Trade Compliance Manager
Kellogg Company
67 W. Michigan Avenue
Battle Creek, MI 49016
Re: Modification of NY N211715; classification of Kellogg’s cereal bars
Dear Ms. Sturhan,
This is in response to your request of August 4, 2014, for the reconsideration of New York Ruling Letter (NY) N211715, dated April 27, 2012, contesting Customs and Border Protection’s (CBP) classification of the Kellogg’s Frosted Flakes Bar in heading 1704, HTSUS, as sugar confectionery. In NY N211715, two Kellogg’s cereal bars, the Froot Loops Bar and the Frosted Flakes Bar, were classified in heading 1704, HTSUS. You claim that the Kellogg’s Frosted Flakes Bar is classified in heading 1806, HTSUS, heading 1904, HTSUS, or alternatively in heading 2106, HTSUS. You do not contest the classification of the Froot Loops Bar. We have reviewed NY N211715 and have determined that it is incorrect with regard to the classification of the Frosted Flakes Bar.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to modify NY N211715 was published on March 9, 2016, in Volume 50, Number 10 of the Customs Bulletin. No comments were received in response to this notice.
FACTS:
In NY N211715, the Frosted Flakes Bars were described as follows:
The Frosted Flakes Bar consists of corn flakes shaped in bar form with a chocolate flavored coating on the bottom of the bar. The cereal bar is packaged in a foil wrapping, decorated with the Kellogg’s Frosted Flakes logo and has a net weight of 21 grams. It is said to contain 35-75 percent corn flakes, 15-25 percent chocolate flavored coating (cocoa content is less than 6 percent), 3-9 percent glucose, 3-9 percent high fructose corn syrup, 2-6 percent glucose solids, 2-6 percent soybean and palm oil, 2-6 percent sugar, 2-6 percent dextrose and less than 2 percent of the following: invert sugar, natural flavor, nonfat milk, tricalcium phosphate, sorbitol, glycerin, color added, soy lecithin, vitamin C (ascorbic acid), maltodextrin, wheat starch, vitamin E ( alpha tocopherol), vitamin B1 (thamin mononitrate), vitamin B6 (pyridoxine hydrochloride) and BHT.
Based on additional information provided by Kellogg, the total cocoa content of the Frosted Flakes Bar is approximately 1.5% by weight on a defatted basis, and it contains approximately 26% of added sugars and sweeteners in the form of ingredients such as glucose and high fructose corn syrup.
ISSUE:
Whether the Frosted Flakes Bar is classified in heading 1704, HTSUS, as sugar confectionery; in heading 1806, HTSUS, as a food preparation containing cocoa; in heading 1904, HTSUS, as a cereal product; or in heading 2106, HTSUS, as a food preparation not elsewhere specified or included.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes, and, provided
such headings or notes do not otherwise require, according to the remaining GRI's." In other words, classification is governed first by the terms of the headings of the tariff and any relative section or chapter notes.
The HTSUS provisions at issue are as follows:
1704: Sugar confectionery (including white chocolate), not containing cocoa:
1704.90: Other:
Confections or sweetmeats ready for consumption:
Other:
1704.90.35: Other.....
* * * *
1806: Chocolate and other food preparations containing cocoa:
Other, in blocks, slabs or bars:
1806.32: Not filled:
Other:
1806.32.90: Other.........
* * * *
1904: Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, cornflakes); cereals (other than corn (maize)) in grain form or in the form of flakes or other worked grains (except flour, groats and meal), pre-cooked or otherwise prepared, not elsewhere specified or included:
1904.10.00: Prepared foods obtained by the swelling or roasting of cereals or cereal
products....
2106: Food preparations not elsewhere specified or included:
2106.90: Other…
* * * *
Note 1 to Chapter 17 provides as follows:
1. This Chapter does not cover :
Sugar confectionery containing cocoa (heading 18.06);
The Legal Notes to Chapter 18 provide as follows:
This Chapter does not cover the preparations of heading 04.03, 19.01, 19.04, 19.05,
21.05, 22.02, 22.08, 30.03 or 30.04.
Heading 18.06 includes sugar confectionery containing cocoa and, subject to Note 1
to this Chapter, other food preparations containing cocoa.
Note 3 to Chapter 19 provides as follows:
Heading 1904 does not cover preparations containing more than 6 percent by
weight of cocoa calculated on a totally defatted basis or completely coated with chocolate or other food preparations containing cocoa of heading 1806 (heading 1806).
* * * *
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 the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The General Explanatory Notes to Chapter 17 provide, in pertinent part, as follows:
The Chapter does not include :
Sugar confectionery containing cocoa or chocolate (other than white chocolate) in any proportion, and sweetened cocoa powders (heading 18.06).
Sweetened food preparations of Chapter 19, 20, 21 or 22.
The General EN to Chapter 18 provides, in pertinent part, as follows:
This Chapter covers cocoa (including cocoa beans) in all forms, cocoa butter, fat and oil and preparations containing cocoa (in any proportion), except :
…
Food preparations of flour, groats, meal, starch or malt extract, containing less than 40 % by weight of cocoa calculated on a totally defatted basis, and food preparations of goods of headings 04.01 to 04.04 containing less than 5 % by weight of cocoa calculated on a totally defatted basis, of heading 19.01.
Swelled or roasted cereals containing not more than 6 % by weight of cocoa calculated on a totally defatted basis (heading 19.04).
(e) Pastry, cakes, biscuits and other bakers’ wares, containing cocoa (heading 19.05).
…
EN 18.06 provides, in pertinent part, as follows:
The heading also includes all sugar confectionery containing cocoa in any proportion (including chocolate nougat), sweetened cocoa powder, chocolate powder, chocolate spreads, and, in general, all food preparations containing cocoa (other than those excluded in the General Explanatory Note to this Chapter).
The EN to heading 19.04 provides, in pertinent part, as follows:
Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes).
This group covers a range of food preparations made from cereal grains (maize, wheat, rice, barley, etc.) which have been made crisp by swelling or roasting. They are mainly used, with or without milk, as breakfast foods. Salt, sugar, molasses, malt extract, fruit or cocoa (see Note 3 and the General Explanatory Note to this Chapter), etc., may have been added during or after their manufacture.
…
The heading also excludes :
Prepared cereals coated or otherwise containing sugar in a proportion which gives them the character of sugar confectionery (heading 17.04).
Preparations containing more than 6 % by weight of cocoa calculated on a totally defatted basis or completely coated with chocolate or other food preparations containing cocoa of heading 18.06 (heading 18.06).
* * * *
In NY N211715, dated April 27, 2012, CBP classified the Frosted Flakes Bar in heading 1704, HTSUS, as sugar confectionery. You argue that the Frosted Flakes Bar is not classified in heading 1704, HTSUS, because it contains cocoa and because the Explanatory Notes to Chapter 17 exclude “Sweetened food preparations of Chapter 19, 20, 21 or 22” from classification in Chapter 17. You argue that it is properly classified in either heading 1904, HTSUS, as “prepared foods obtained by the swelling or roasting of cereals or cereal products”, or, if CBP determines that it has the character of confectionery, in heading 1806, HTSUS, as “other food preparations containing cocoa.” Alternatively, you suggest classification in heading 2106, HTSUS, as a food preparation not elsewhere specified or included.
Heading 1704, HTSUS, provides for “Sugar confectionery (including white chocolate), not containing cocoa” (emphasis added). Note 1 to Chapter 17 reiterates that Chapter 17 does not include “sugar confectionery containing cocoa (heading 18.06)”, and the EN to heading 17.04 further elaborates that heading 1704, HTSUS, excludes “Sugar confectionery containing cocoa or chocolate (other than white chocolate) in any proportion, and sweetened cocoa powders (heading 18.06).” (emphasis added). The classification of sugar confectionery containing cocoa is directed to heading 1806, HTSUS. Thus, in order for the Frosted Flakes Bar to be classified in heading 1704, HTSUS, it must be “sugar confectionery” within the meaning of the heading, and it must not contain cocoa or chocolate.
The term “confectionery” is not defined in the HTSUS. However, CBP has adopted the meaning of the term given by the United States Customs Court (now the Court of International Trade) in Leaf Brands, Inc. v. United States, (“Leaf Brands”) 70 Cust. Ct. 66 (1973). The Court defined “confectionery” as the “many kinds of sweet-tasting articles which are eaten as such for their taste and flavor without further preparation and which are usually sold in confectionery outlets.” Id. at 71. Further, the Court found that whether an article is confectionery is determined by its chief use as a confection, which may be evidenced by its character and design and the manner in which it is sold (i.e., through candy brokers, in confectionery outlets), rather than by its shape and texture. Id. at 72. Following Leaf Brands, CBP has consistently taken the position that a confection is a product that, in its condition as imported, is ready for consumption at retail as a confectionery and is marketed as such; it is not an ingredient of another food product. See, e.g., HQ 086101, dated February 27, 1990 (peanut flavored chips), HQ 085206, dated February 23, 1990 (white chocolate in 5 kg blocks), HQ 955580, dated July 30, 2002, and HQ 965211, dated August 1, 2002 (chocolate fish).
As the instant product is no longer in production, we cannot ascertain the manner in which it is sold or marketed. However, we can ascertain from the ingredients, specifically the high proportion of added sugars, that the Frosted Flakes Bar has the character of confectionery. The aforementioned ingredients collectively comprise more than 26% of the Frosted Flakes Bar, without counting the additional sugar present in the frosted flakes and chocolate coating (Frosted Flakes cereal is stated to contain 10 g of sugar per 29 grams of cereal, but the sugar in the chocolate coating is not broken down by amount). Thus, the Frosted Flakes Bar has the character of a sugar confectionery.
The Kellogg’s Frosted Flakes Bar contains roughly 1.5% cocoa on a defatted basis. Although the total cocoa content of the bar is low, the heading text and ENs to heading 1704, HTSUS, are clear that any amount of cocoa is sufficient to exclude a product of sugar confectionery from this heading. Thus, although the Frosted Flakes Bar has the character of sugar confectionery, we agree that because it contains cocoa, it cannot be classified in heading 1704, HTSUS.
You suggest that the Frosted Flakes Bar is classified in either heading 1806, HTSUS, heading 1904, HTSUS, or heading 2106, HTSUS. Note 1 to Chapter 17 and Note 2 to Chapter 18 direct the classification of sugar confectionery containing cocoa to heading 1806, HTSUS. The Frosted Flakes Bar, as a sugar confectionery containing cocoa, is thus classified in heading 1806, HTSUS, and not heading 1904, HTSUS. Note 3 to Chapter 19 confirms that “heading 19.04 does not cover preparations containing more than 6% by weight of cocoa calculated on a totally defatted basis or completely coated with chocolate or other food preparations containing cocoa of heading 18.06 (18.06)” (emphasis added). Thus, because the Frosted Flakes Bar has the character of sugar confectionery, it is excluded from classification as a food preparation of Chapter 19 or heading 1904, HTSUS. See also, HQ H200575, dated April 16, 2012. Because the Frosted Flakes Bar is specifically provided for in heading 1806, HTSUS, it cannot be classified in heading 2106, HTSUS.
By comparison, CBP has consistently classified snack bars containing cocoa in heading 1806, HTSUS. See, e.g., NY N041325, dated October 29, 2008 (Kashi Cherry Dark Chocolate granola bar); NY N028269, dated May 16, 2008 (Sesame & Peanuts with Chocolate Bar), NY M80106, dated February 8, 2006 (protein and energy bars); NY L89983, dated February 7, 2006 (Crispy Rice with Chocolate bar); and NY J83776, dated May 27, 2003 ("banana & muesli with chocolate" bar).
HOLDING:
Pursuant to GRIs 1 and 6, the Kellogg’s Frosted Flakes Bar is classified in heading 1806, HTSUS, specifically subheading 1806.32.90, HTSUS, which provides for “Chocolate and other food preparations containing cocoa: Other, in blocks, slabs or bars: Not filled: Other: Other.” The 2016, column one, general rate of duty is 6% ad valorem.
EFFECT ON OTHER RULINGS:
NY N211715, dated April 27, 2012, is hereby modified.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division