CLA-2 OT:RR:CTF:TCM HQ H064895 TNA
Susan Parker
Arysta Lifescience N.A.
15401 Weston Parkway, Suite 150
Cary, NC 27513
RE: Revocation of NY N046978; Classification of Ethephon (2-Chloroethylphosphonic acid, CAS-16672-87-0) 73.81% Technical and Ethephon 65% MUP from China
Dear Ms. Parker:
This letter is in reference to New York Ruling Letter (“NY”) N046978, issued to Arysta Lifescience N.A. (“Arysta”) on December 24, 2008, concerning the tariff classification of Ethephon. In that ruling, U.S. Customs and Border Protection (“CBP”) classified the merchandise under subheading 3808.93.50, Harmonized Tariff Schedule of the United States (“HTSUS”), as “Herbicides, anti-sprouting products and plant-growth regulators: Other: Other.” We have reviewed NY N046978 and found it to be in error. For the reasons set forth below, we hereby revoke NY N046978.
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 HQ 963264 was published on March 31, 2010, in Volume 44, Number 14, of the Customs Bulletin. CBP received one comment in response to this notice.
FACTS:
The merchandise at issue in NY N046978 is two different formulations of ethephon, a name approved by the American National Standards Institute for 2-Chloroethylenephosphonic acid, a plant-growth regulator/ethylene releaser. The first product, Ethephon 73.81% Technical, consists of approximately 74% ethephon, 17% water, and 9% impurities. The second product at issue, Ethephon 65% MUP, consists of approximately 65% ethephon, 28% water, and 7% impurities.
In NY N046978, dated December 24, 2008, CBP classified both types of ethephron under subheading 3808.93.50, HTSUS, as: “Herbicides, anti-sprouting products and plant-growth regulators: Other: Other,” noting that the Environmental Protection Agency’s (“EPA”) label for the Ethephon Technical listed 26.19% inert ingredients, and the EPA label for the Ethephon MUP listed 35% inert ingredients.
In its request for reconsideration, Arysta has now submitted evidence as to the nature of the inert ingredients. EPA Registered Ethephon end-use formulations are between 3.9% and 55.4%. EPA regulations allow up to 55.4% Ethephon in end use products. See, e.g., 40 C.F.R. 180.300; http://www.epa.gov /oppsrrd1/REDs/0382.pdf at 19.
ISSUE:
Whether ethephon formulations with 65% and 73.8% ethephon, respectively, are classifiable under subheading 3808.93.50, HTSUS, as “herbicides, anti-sprouting products and plant-growth regulators,” or under subheading 2931.00.90, HTSUS, as “other organo-inorganic compounds”?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined 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 headings and legal notes do not otherwise require, the remaining GRI may then be applied.
The HTSUS provisions under consideration are as follows:
2931.00 Other organo-inorganic compounds:
Other:
2931.00.90 Other
* * * * * * * * * * *
3808 Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulfur-treated bands, wicks and candles, and flypapers):
Other:
3808.93 Herbicides, anti-sprouting products and plant-growth regulators:
Other:
3808.93.50 Other
Chapter 29 Note 1 reads, in pertinent part:
Except where the context otherwise requires, the headings of this Chapter apply only to:
Separate chemically defined organic compounds, whether or not containing impurities;…
(d) Products mentioned in (a), (b) or (c) above dissolved in water
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Part A of the General Explanatory Notes to Chapter 29, defines, in relevant part, a “separate chemically defined compound” as:
[a] substance which consists of one molecular species (e.g., covalent or ionic) whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram…
Separate chemically defined compounds containing other substances deliberately added during or after their manufacture (including purification) are excluded from this Chapter.
The separate chemically defined compounds of this Chapter may contain impurities (Note 1(a))….
The term “impurities” applies exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). These substances may result from any of the factors involved in the process and are principally the following:
Unconverted starting materials.
Impurities present in the starting materials
Reagents used in the manufacturing process (including purification)
By-products
It should be noted, however, that such substances are not in all cases regarded as “impurities” permitted under Note 1(a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general us, they are not regarded as permissible impurities….
The separately chemically defined compounds of this chapter may be dissolved in water.
The EN for heading 2931 states, in pertinent part:
Organo-phosphorus compounds: these are organic compounds containing at least one phosphorous atom linked directly to a carbon atom.
The EN for heading 3808 states, in pertinent part:
This Chapter covers a large number of chemical and related products. It does not cover separate chemically defined elements or compounds (usually classified in Chapter 28 or 29), with the exception of the following:…
(2) Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant growth regulators, disinfectants and similar products, put up as described in heading 3808.
These products are classified here in the following cases only:
(1) When they are put up in packings (such as metal containers or paperboard cartons) for retail sale as disinfectants, insecticides, etc., or in such forms (e.g., in balls, strings of balls, tablets or plates) that there can be no doubt that they will normally be sold by retail.
Products put up in these ways may or may not be mixtures. The unmixed products are mainly chemically defined products which would otherwise fall in Chapter 29, e.g., naphthalene, or 1,4 dichlorobenzene.
(2) When they have the character of preparations, whatever the presentation (e.g., as liquids, washes or powders)…
Intermediate preparations, requiring further compounding to produce the ready for use insecticides, fungicides, disinfectants, etc., are also classified here, provided they already possess insecticidal, fungicidal, etc., properties…
In NY N046978, CBP classified the subject merchandise under heading 3808, HTSUS, as plant growth regulators based on the product’s EPA label, which listed a significant percentage of inert ingredients in the merchandise. Under the General Explanatory Notes to heading 3808, HTSUS, intermediate preparations that require further compounding to produce insecticides, fungicides, disinfectants, etc., that are ready to be used are classified under heading 3808, HTSUS, as long as they already possess insecticidal, fungicidal properties. “Only Ethephon not mixed with inerts would be classifiable in Chapter 29. The presence of inerts gives both products the characteristics of preparations,” and such intermediate preparations “are classifiable in heading 3808,” HTSUS, the opinion stated.
In its request for reconsideration, however, Arysta submits that the EPA label was misleading in that the ingredients it listed as “inert” are actually manufacturing impurities and water rather than ingredients purposely added to the ethephon. The company’s recently submitted EPA Confidential Statement of Formula supports this contention. Furthermore, Arysta asserts that both products at issue are labeled for “formulation into end-use plant growth regulators.” As imported, the products contain concentrations of ethephon that are higher than the concentration the EPA allows in plant growth inhibitors. As a result, they are too concentrated to be used as plant growth regulators.
In light of this new information, CBP reexamines whether the merchandise should be classified under heading 3808, HTSUS, or under heading 2931, HTSUS. Chapter 38 Note 1(a) states that in order to be classifiable in its imported condition in heading 3808, the merchandise must be put up in forms or packings for retail sale or as preparations or articles. Examples from prior CBP rulings that have been classified according to this guidance are insecticide in the form of a chalk packaged for resale in a clear plastic bag and “House Fly Traps” designed for insect control, packaged for retail sale, and consisting of a small fold-up house motif and a glue board of light cardboard construction, coated on one side with a “glue” adhesive material consisting of styrene copolymer, hydrocarbon resin, and paraffin oil. See, e.g., HQ 088109 and HQ 563064. In the present case, Arysta’s products are not preparations because the inert ingredients are actually impurities.
In the present case, Ethephon is a separately defined chemical compound with the chemical name of 2-chloroethylphosphonic acid, consisting of carbon, hydrogen, chlorine, oxygen, and phosphorus in a constant ratio and with a definite structural formula. The inert ingredients are not intentionally added but rather are unintended results of the manufacturing process. These impurities were not deliberately left in to render the product particularly suitable for specific use. The separately defined chemical compounds, as defined in general EN, are then dissolved in water. Therefore, the merchandise meets the terms of Chapter 29, note 1(a) and (d) and the general EN thereto. Additionally, the chemical structure of the ethephon includes a phosphorous atom directly linked to a carbon atom. Therefore, the substance meets the terms of heading 2931, HTSUS.
As a result, CBP finds that Ayrsta’s Ethephon plant growth regulators are classified under subheading 2931.00.90, HTSUS, the provision for “other organo-inorganic compounds: other: other.” The applicable duty rate will be 3.7% ad valorem. However, special legislative provision 9902.24.73 applies to both products; as a result, the subject merchandise that is imported on or before December 31, 2009, is duty-free.
The one comment CBP received in response to the proposed revocation of NY N046978 regarded the applicability of this revocation to entries that were liquidated, and protests that were denied, in accordance with NY N046978. In response, we note that this revocation affects future transactions only. Under San Francisco Newspaper Printing Co. v. United States, 9 CIT 517, 620 F. Supp. 738 (1985), the liquidation of the entries covering the merchandise which was the subject of protests about which the commenter inquires was final on both the protestant and CBP. Therefore, this ruling has no effect on those entries. See Id.
HOLDING:
Under the authority of GRI 1, Arysta’s Ethephon (2-Chloroethylphosphonic acid, CAS-16672-87-0) 73.81% Technical and Ethephon 65% MUP from China are provided for in subheading 2931.00.90, HTSUS, the provision for “other organo-inorganic compounds: other: other.” The applicable duty rate is normally 3.7% ad valorem. However, special legislative provision 9902.24.73 applied to both products; as a result, the subject merchandise that was imported on or before December 31, 2009 is duty-free.
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:
NY N046978, dated December 24, 2008, is REVOKED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division