CLA-2 OT:RR:CTF:CPM H284445 NCD
Donald Stein
Greenberg Traurig, LLP
2101 L Street, N.W.
Suite 1000
Washington, D.C. 20037
RE: Revocation of NY N128055; Classification of dried algae powder
Dear Mr. Stein:
This is in reference to New York Ruling Letter (NY) N128055, which was issued to you by U.S. Customs and Border Protection (CBP) on October 22, 2010. NY N128055 was issued in response to your October 12, 2010 request, filed on behalf of Aurora Algae, for a determination by CBP as to the classification of a dried algae powder under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed NY N128055 and determined that it is incorrect. For the reasons set forth below, we are revoking that ruling letter.
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 of the proposed action was published in the Customs Bulletin, Vol. 51, No. 18, on May 3, 2017. No comments were received in response to the notice.
FACTS:
NY N128055 states as follows with respect to the dried algae powder at issue:
According to descriptive literature provided with your request, the dried algae powder is prepared in the following manner. Algae cultures of Nannochloropsis sp., cultivated in Karratha, Western Australia are concentrated via centrifugation. The resulting paste is then dried at a temperature greater than 150 degrees Centigrade by passing through a milling flash dryer. After completing the drying process, the dried algae powder is packed in plastic totes, boxed and stored cold until it is ready to be loaded for transportation to the United States. Upon importation into the United States, the dried algae powder will be processed into omega-3 oils and protein biomass raw materials using a solvent based extraction procedure. These raw materials will be refined into omega-3 oils which are intended to be used as ingredients for dietary supplements and fortified food, or into protein biomass that can be used as feed ingredient for aquaculture.
The above-described dried algae powder was classified in heading 1212, HTSUS, specifically in subheading 1212.20.00 of the 2010 HTSUS, which provided for “Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human consumption, not elsewhere specified or included: Seaweeds and other algae: Other.”
ISSUE:
Whether the dried algae powder is classified as “other algae” in heading 1212, HTSUS, or as “other dead single-cell microorganisms” in heading 2102, HTSUS.
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. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
In addition, in interpreting 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 2017 HTSUS provisions under consideration are as follows:
1212 Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human consumption, not elsewhere specified or included:
Seaweeds and other algae:
1212.29.00 Other*
2102 Yeasts (active or inactive); other single-cell microorganisms, dead (but not including vaccines of heading 3002); prepared baking powders:
2102.20 Inactive yeasts; other single-cell microorganisms, dead:
2102.20.60 Other
At the outset, we note that Note 5(a) to Chapter 12 states: “For the purposes of heading 1212, the term “seaweeds and other algae” does not include…Dead single-cell microorganisms of heading 2102.” See also EN 12.12 (“The heading excludes…Dead single-cell algae (heading 21.02).” Consequently, if the subject dried algae powder qualifies as a “dead single-cell microorganism” within the meaning of heading 2102, HTSUS, it cannot be classified in heading 1212, HTSUS.
Heading 2102, HTSUS, specifically describes, inter alia, “dead single-cell microorganisms.” EN 21.02 states as follows with respect to such:
(B) OTHER SINGLE CELL MICRO ORGANISMS, DEAD
This category covers single cell micro organisms such as bacteria and unicellular algae, which are not alive. Inter alia, covered here are those which have been obtained by cultivation on substrates containing hydrocarbons or carbon dioxide. These products are particularly rich in protein and are generally used in animal feeding.
Certain products of this group may be put up as food supplements for human consumption or animal feeding (e.g., in powder or tablet form) and may contain small quantities of excipients, e.g., stabilising agents and anti-oxidants. Such products remain classified here provided that the addition of such ingredients does not alter their character as micro-organisms.
According to the above-cited portion of EN 21.02, heading 2102 applies to non-living unicellular algae put up in powder form. In the instant case, the dried algae powder at issue consists of nannochloropsis sp. cultures that have undergone concentration by centrifugation and, subsequently, concurrent drying and milling in a milling flash dryer. It is indisputable that nannochloropsis sp. is a single-cell algal microorganism. See Olivier Kilian et. al., High-efficiency Homologous Recombination in the Oil-producing Alga Nannochloropsis sp. 108-52 Proc. Nat’l Acad. U.S. 21266 (2011) (characterizing Nannochloropsis sp. as a unicellular microalga in analysis authored in part by affiliate of Aurora Algae). Moreover, a report issued by the World Customs Organization’s Scientific Sub-Committee (SSC) indicates that microalgae is unable to survive the combination of concentration, drying, and milling. See Annex A/8 to SSC Doc. NS0102E1a (SSC/20/Jan. 2005), A/8; see also Annex G/3 to Harmonized System Committee (HSC) Doc. NC938E1b (HSC/35/March 2005), G/3/1 Rev (relying on the SSC’s analysis in classifying cultures of Spirulina platensis, a unicellular alga, in heading 2102). Lastly, because it is entered as a non-supplemented powder, the subject merchandise takes a form that, according to EN 21.02, is permissible for purposes of classification in heading 2102.
The subject dried algae powder is therefore classified in heading 2102, insofar as it falls within the scope of the heading and is consequently excluded from heading 1212, HTSUS. We note that this determination is consistent with several prior CBP rulings pertaining to similarly-produced microalgal products. See NY N110542, dated July 1, 2010; NY H84826, dated August 14, 2001; NY F83405, dated March 7, 2000 and NY 895933, dated April 5, 1994 (all classifying powders made up of unicellular microalgae in heading 2102).
HOLDING:
By application of GRI 1, the subject dried algae powder is properly classified in heading 2102, HTSUS. It is specifically classified in subheading 2102.20.6000, HTSUSA (Annotated), which provides for “Yeasts (active or inactive); other single-cell microorganisms, dead (but not including vaccines of heading 3002); prepared baking powders: Inactive yeasts; other single-cell microorganisms, dead: Other.” The 2017 column one general rate of duty is 3.2% ad valorem.
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 the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
New York Ruling Letter N128055, dated October 22, 2010, is hereby REVOKED in accordance with the above analysis.
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