CLA-2 RR:CR:GC 959228 PH

Ms. Kathleen Crawford
Manager, Customs Affairs
BDP International Inc.
1017 4th Avenue
Lester, PA 19029-1813

RE: NY 818346 modified; artificial graphite lubricant; colloidal or semi-colloidal graphite

Dear Ms. Crawford:

On March 1, 1996, New York Ruling Letter (NY) 818346 was issued to you concerning "Product Type[s] A, B, [and] C (Artificial Graphite Lubricants)" from Switzerland. You were advised that each of the products was classifiable in subheading 3801.90.0000, Harmonized Tariff Schedule of the United States (HTSUS), as other preparations based on graphite or other carbon.

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 (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub.L. 103-182, 107 Stat. 2057, 2186), notice of the proposed modification of NY 818346 was published on June 17, 1998, in the CUSTOMS BULLETIN, Volume 32, Number 24. No comments were received in response to this notice.

FACTS:

NY 818346 described product A as "a mixture of synthetic graphite, starch, and polyvinylacetate"; product B as "a mixture of synthetic graphite, polyvinylacetate"; and product C as "a mixture of synthetic graphite, bentonite clay, and an ethylene oxide or propylene oxide copolymer." In your letter of May 9, 1996, you describe the products as above, except that you state that product A is "a dry powder mixture"; product B is an "aqueous dispersion composed of synthetic graphite, polyvinylacetate, and water"; and product C is "a dry powder mixture composed of synthetic graphite, bentonite, and ethylene oxide/propylene oxide copolymer." You state that the foreign supplier advises that the additives to the synthetic graphite, in all cases, are stabilizing agents only which maintain the graphite particles in suspension and prevent sedimentation of the particles or fermentation of the dispersion.

The subheadings under consideration are as follows:

3801.10.50: Artificial graphite; colloidal or semi-colloidal graphite; preparations based on graphite or other carbon in the form of pastes, blocks, plates or other semimanufactures: Artificial graphite: ... Other.

Goods classifiable under subheading 3801.10.50 receive duty-free treatment.

3801.20.00: Artificial graphite; colloidal or semi-colloidal graphite; preparations based on graphite or other carbon in the form of pastes, blocks, plates or other semimanufactures: ... Colloidal or semi-colloidal graphite.

Goods classifiable under subheading 3801.20.00 receive duty-free treatment.

3801.90.00: Artificial graphite; colloidal or semi-colloidal graphite; preparations based on graphite or other carbon in the form of pastes, blocks, plates or other semimanufactures: ... Other.

The 1998 general column one rate of duty for goods classifiable under this provision is 4.9% ad valorem.

ISSUE:

Whether the merchandise is classifiable as other artificial graphite in subheading 3801.10.50, HTSUS, colloidal or semi-colloidal graphite in subheading 3801.20.00, HTSUS, or other preparations based on graphite or other carbon in subheading 3801.90.00, HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that, for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(b) provides that any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances, any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance, and the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3. Under GRI 3(b), in pertinent part, when, by application of GRI 2(b) or for any other reason, goods are prima facie classifiable under two or more headings and they cannot be classified by reference to GRI 3(a) (by reference to the heading which provides the most specific description), mixtures shall be classified as if they consisted of the material which gives them their essential character. GRI 6 provides that for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, by appropriate substitution of terms, to GRIs 1 through 5, on the understanding that only subheadings at the same level are comparable.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise. Customs believes the ENs should always be consulted. See T.D. 89-80, published in the Federal Register August 23, 1989 (54 FR 35127, 35128).

EN GRI Rule 2(b)(X) provides, in part, that:

... Mixtures being preparations described as such in a Section or Chapter Note or in a heading text are to be classified under the provisions of Rule 1.

EN 38.01 provides, in part, that:

(1) Artificial graphite (electro-graphite) is ... a product ... with an apparent specific gravity of about 1.5 to 1.6 and a homogeneous microcrystalline structure which X-ray examination shows to be that of graphite. Chemical analysis confirms that the substance is graphite (precipitation of graphitic acid).

...

Artificial graphite of this heading is usually in the form of powder, flakes, blocks, plates, bars, rods, etc. The blocks and plates are used, after cutting and high-finish machining (fine tolerances and appropriate surface finish), to make the brushes or other electrical carbon articles of heading 85.45 or parts of nuclear reactors.

...

(2) Colloidal or semi-colloidal graphite.

(a) Colloidal graphite consists of finely divided natural or artificial graphite in colloidal suspension in water or in other media (e.g., alcohol, mineral oil), to which may be added small quantities of other products such as tannin or ammonia for the purpose of stabilising the suspension. Colloidal graphite is usually semi-liquid, and is mainly used for the manufacture of lubricating preparations or for its high electrical conductivity.

(b) Semi-colloidal graphite (i.e., graphite in semi-colloidal suspension in water or in other media). Semi-colloidal graphite may be used for the preparation of graphited oils or for forming graphited surfaces.

This category covers only graphite in colloidal or semi-colloidal suspension in any media, the graphite being the basic constituent.

Thus, to be classified as colloidal or semi-colloidal graphite, the merchandise must consist of graphite in colloidal suspension in water or in other media, and graphite must be the basic constituent. "Colloid" is defined as "a homogeneous mixture of substances, at least one of which is very finely dispersed", The Encyclopedia Americana, International Ed. (1980), vol. 7, 260, Colloid (see also, Hawley's Condensed Chemical Dictionary, 12th Ed. (1993), colloid chemistry; McGraw-Hill Encyclopedia of Science & Technology, 6th Ed. (1987), vol. 4, Colloid; Kirk-Othmer Encyclopedia of Chemical Technology, 4th Ed. (1993), vol. 6, Colloids). "Suspension" is defined as "a liquid medium containing small solid particles that are at least 1 micron (0.00004 inch) in diameter and do not pass through filter paper[;] ... [m]ixtures containing solid particles that are small enough to pass through filter paper and that do not settle out on standing are called colloidal suspensions or sols", The Encyclopedia Americana, International Ed. (1980), vol. 26, 77, Suspension (see also, Hawley's Condensed Chemical Dictionary, 12th Ed. (1993), suspension "[a] system in which very small particles (solid, semi-solid, or liquid) are more or less uniformly dispersed in a liquid or gaseous medium ...").

Thus, under the above definitions, for graphite to be in colloidal or semi-colloidal suspension, the graphite, in very small particles, must be dispersed in a liquid or gaseous medium. This is consistent with the technical definition of colloidal and semi-colloidal graphite found in the Kirk-Othmer Encyclopedia of Chemical Technology (4th Ed. 1992). According to that text, under the heading CARBON (NATURAL GRAPHITE), Colloidal Graphite (vol. 4, at 1115):

Colloidal graphite refers to a permanent suspension of fine, natural, or synthetic graphite in a liquid medium. The average particle size is about 1 m and protective colloids ensure permanency of the suspension. ... The name semicolloidal is applied to less stable dispersions, ie [sic], those that settle more readily because of large particle size, less effective processing, or both.

According to all of the available information, including review by the Customs Service's Office of Laboratories and Scientific Services, product B, consisting of an aqueous dispersion composed of synthetic graphite, polyvinylacetate, and water, meets the above definitions. Product B is classifiable as colloidal or semi-colloidal graphite in subheading 3801.20.00, HTSUS.

Products A and C, dry mixtures of, respectively, synthetic graphite, starch, and polyvinylacetate, and of synthetic graphite, bentonite clay, and an ethylene oxide/propylene oxide copolymer, do not meet the above definitions because the graphite is not suspended in a liquid medium. They may not be classified in subheading 3801.20.00, HTSUS.

Products A and C are each mixtures of artificial graphite with other materials or substances. However, under EN GRI Rule 2(b)(X), the products may not be classified as artificial graphite, in subheading 3801.10.50, HTSUS, by virtue of GRI 2(b) or 3(b). That is, heading 3801 provides for "preparations based on graphite or other carbon in the form of pastes, blocks, plates or other semimanufactures" (emphasis added). EN GRI Rule 2(b)(X) states that if a heading provides for a preparation, a mixture which is such a preparation is classifiable according to the terms of the heading (and any relevant section or chapter notes). Products A and C are such preparations (i.e., they are semimanufactures (components for the production of aqueous graphite dispersions such as product B) based on graphite in the form of mixtures). They are classifiable in subheading 3801.90.00, HTSUS, as other preparations based on graphite or other carbon in the form of a semimanufacture. The classification of products A and C in NY 818346 is unchanged.

HOLDING:

Product B, an aqueous dispersion composed of synthetic graphite, polyvinylacetate, and water, is classifiable as colloidal or semi-colloidal graphite in subheading 3801.20.00, HTSUS; products A and C, dry mixtures of synthetic graphite and other materials, are classifiable as other preparations based on graphite or other carbon in subheading 3801.90.00, HTSUS.

EFFECT ON OTHER RULINGS:

NY 818346 dated March 1, 1996, is MODIFIED accordingly. In accordance with 19 U.S.C. 625(c)(1), this ruling will become effective 60 days after its publication in the CUSTOMS BULLETIN.

Publication of rulings or decisions pursuant to 19 U.S.C. 625(c)(1) does not constitute a change of practice or position in accordance with section 177.10 (c)(1), Customs Regulations [19 CFR 177.10(c)(1)].

Sincerely,

John Durant, Director
Commercial Rulings Division