CLA-2 CO:R:C:F 086585 SER/JGB
Mr. Alfred T. Ericson
Sandoz Pharmaceuticals Corporation
Box 83288
Lincoln, NE 68501
RE: Reconsideration and Revocation of HRL 085560; Calcium
Lactobionate
Dear Mr. Ericson:
This is in reference to your request for reconsideration of
the classification of calcium lactobionate under the Harmonized
Tariff Schedule of the United States Annotated (HTSUSA).
FACTS:
Calcium lactobionate is stated to have the chemical name
Calcium bis (4-o- (beta-D-galactosyl)-D- gluconate. It is used
as an intermediate in organic synthesis. In Headquarters Ruling
Letter (HRL) 085560, dated December 19, 1989, calcium
lactobionate was classified in subheading 2940.00.0000, HTSUSA,
which provides for calcium salts of a sugar ether. A previous
ruling, HRL 081993, which was subsequently revoked, classified
calcium lactobionate in subheading 2918.19.5000, HTSUSA, based on
the listing by name of this product in the Explanatory Notes.
ISSUE:
What is the legal classification determination of calcium
lactobionate under the HTSUSA?
LAW AND ANALYSIS:
There are several competing subheadings in which this
product has been classified. Based on a chemical structural
analysis, Customs has previously determined that calcium
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lactobionate was potentially classifiable in subheadings
2918.19.5000, 2932.90.5000 and 2940.00.0000, HTSUSA. In HRL
081993 calcium lactobionate was classified in subheading
2918.19.5000, HTSUSA, based on the listing of calcium
lactobionate in the Explanatory Notes for Chapter 29. Later, in
HRL 085560, it was determined that since calcium lactobionate was
also classifiable under the provision for other heterocyclic
compounds, with oxygen heteroatom of subheading 2932.90.5000,
HTSUSA and also as a calcium salt of a sugar ether of subheading
2940.00.0000, HTSUSA, that legal Note 3 to Chapter 29 was the
controlling factor in determining the proper classification in
subheading 2940.00.0000. Note 3 states that goods which could be
included in two or more headings of the chapter are to be
classified in the heading which occurs last in numerical order.
Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRI's), taken in order. GRI 1
provides that "for legal purposes, classification shall be
determined according to the terms of the headings and any
relative section or chapter notes . . . ." In the International
Trade Commission (ITC) report, Conversion of the Tariff Schedules
of the United States Annotated into the nomenclature structure of
the Harmonized System, ITC publication 1400, it is stated that,
"[l]ike the interpretative rules, the legal notes form an
integral part of the system and have the same legal force as the
headings and subheadings (p.18)".
By contrast, Treasury Decision 89-80, in describing the
status of the Explanatory Notes, provides that "[a]lthough
generally indicative of proper interpretation of the various
provisions of the Convention, the Explanatory Notes, like other
similar publications of the Council, are not legally binding on
contracting parties to the Convention. Thus, while they should
be consulted for guidance, the Explanatory Notes should not be
treated as dispositive."
This chemical substance has presented perplexing problems in
classification for the entire chemical academic and technical
community, as well as for U. S. Customs. Technical analysis by
our Office of Laboratories and Scientific Services indicates that
there is some measure of truth or accuracy in each of the three
headings identified here. However, it does not appear that the
description in each heading corresponds enough to the chemical
substance to state that it "could be included in two or more
headings of this chapter" to quote legal note 3 to chapter 29.
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The issue of classification of calcium lactobionate was
discussed by both the Chemist Committee of the Customs
Cooperation Council and by the Council (CCC). A CCC document
dated April 1969 shows that the debates were primarily concerned
with the question of whether or not calcium lactobionate should
be classified as a carboxylic acid salt with an additional oxygen
function (heading 2918 in the 1991 HTS). The document indicates
that by a small margin the Chemist Committee decided that the
product should be classified as a carboxylic acid salt with an
additional oxygen function in heading 2916, which in the current
form of the HTS is included with heading 2918. The same
conclusion was reached by the Nomenclature Committee of the CCC,
however, by a wider margin. One of the results of the Council's
decision was the specification within the Explanatory Notes of
calcium lactobionate as a carboxylic acid salt containing an
additional oxygen function in heading 2918.
Therefore, it is Customs position that under these distinct
circumstances, it is proper to allow this classification matter
to be settled according to the majority of the committee. Now
that the Explanatory Notes clearly show that the intended
classification of calcium lactobionate is in heading 2918,
Customs will return to its original classification.
HOLDING:
The calcium lactobionate is properly classified in
subheading 2918.19.9000, HTSUSA, (formerly 2918.19.5000) as a
carboxylic acid salt with an additional oxygen. The rate of duty
is 4 percent ad valorem.
HRL 085560 is hereby revoked.
Sincerely,
John Durant, Director
Commercial Rulings Division
086585;1/19/91
cc: John Durant
cc: Stephanie Joseph, N.I.S. #240
cc: Office of Technical Services, attn.: Ira Reese
.