CLA-2 OT:RR:CTF:TCM H072720 DSR
Area Port Director
Houston Airport
2350 N. Sam Houston Parkway E.
Suite 1000
Houston, TX 77932
ATTN: Linda Finnerty, Senior Import Specialist
RE: Application for Further Review of Protest No. 5301-09-100444; Classification of Glycol Ether Heavies
Dear Port Director:
This is in response to the Application for Further Review of Protest No. 5301-09-100444 submitted by counsel on behalf of Third Coast Terminals (Protestant). The issues addressed by this response originate from the importation of glycol ether heavies (“GEHs”) by Protestant.
FACTS:
The products in question are mixtures of polyethylene glycols and other ingredients. Protestant claims that the mixtures are the residue produced from a manufacturing process that combines ethylene oxide and alcohols in the presence of catalysts to create prime, virgin glycol ethers.
On December 5, 2007, CBP’s Houston laboratory received samples of the product contained in two jars labeled “mixed heavy ethers” and “waste (HAZMAT)” denoted by the lab as samples “A” and “B” respectively. On February 5, 2008, the CBP laboratory determined that both samples contained “a mixture consisting primarily of polyethylene glycol compounds having a molecular weight equal to or greater than triethylene glycol with trace amounts of diethylene glycol and other unknown components.” On January 16, 2008, CBP’s Houston laboratory received another sample of the product labeled “glycol ethers,” “other waste organ(ic) solvents.” On February 5, 2008, the CBP laboratory determined that the sample was “a mixture consisting primarily of polyethylene glycol compounds having a molecular weight equal to or greater than triethylene glycol with trace amounts of propylene glycol, ethylene glycol, diethylene glycol and other unknown components.”
The products were entered on April 1, 2008, May 31, 2008 (two entries), July 26, 2008, and August 26, 2008. At entry, the products were classified by Protestant under subheading 3825.49.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Residual products of the chemical or allied industries, not elsewhere specified or included; municipal waste; sewage sludge; other wastes specified in note 6 to this chapter: Waste organic solvents: Other,” free of duty.
On December 4, 2008, CBP proposed to reclassify one entry under subheading 2909.49.15, HTSUS, the provision for “Ethers, ether-alcohols, ether-phenols, ether-alcohol-phenols, alcohol peroxides, ether peroxides, ketone peroxides (whether or not chemically defined), and their halogenated, sulfonated, nitrated or nitrosated derivatives,” dutiable at 5.5 % ad valorem.
On March 5, 2009, CBP noted that the products did not qualify as “waste” under heading 3825, HTSUS, and rate advanced the entries to subheading 3824.90.92, HTSUS, which provides for “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other: Other: Other: Other: …,” dutiable at 5% ad valorem.
The April 1, 2008, entry was liquidated on February 13, 2009, and the remaining four entries were liquidated on May 15, 2009 – each under subheading 3824.90.92, HTSUS. The protest was filed on July 1, 2009.
Finally, on July 9, 2010, CBP’s New York laboratory issued a report in which it reviewed the determinations of the Houston laboratory and stated that “there is insufficient information to contradict the importer’s claim that the product is purchased as waste.”
ISSUE:
Whether the GEHs are classified under heading 3824, HTSUS, as chemical products and preparations of the chemical or allied industries, not elsewhere specified or included; or under heading 3825, HTSUS, as waste organic solvents.
LAW AND ANALYSIS:
The port’s decision on classification is protestable under 19 U.S.C. §1514(a)(2). The protest was timely filed on July 1, 2009, within 180 days of liquidation of the subject entries. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further review is properly accorded to the protest pursuant to 19 C.F.R. § 174.24(a), because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise.
The HTSUS provisions under consideration in this case are as follows:
Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included:
* * *
3824.90 Other:
* * *
Other:
* * *
Other
* * *
Other:
* * *
3824.90.92 Other: …
* * * *
3825 Residual products of the chemical or allied industries, not elsewhere
specified or included; municipal waste; sewage sludge; other wastes
specified in note 6 to this chapter:
* * *
Waste organic solvents:
* * *
3825.49.00 Other.
* * * *
Note 6 to Chapter 38, HTSUS, states the following, in relevant part:
For the purposes of heading 3825, the expression “other wastes” applies to:
(a) Clinical waste, that is, contaminated waste arising from medical research, diagnosis, treatment or other medical, surgical, dental or veterinary procedures, which often contain pathogens and pharmaceutical substances and require special disposal procedures (for example, soiled dressings, used gloves and used syringes);
(b) Waste organic solvents;
(c) Wastes of metal pickling liquors, hydraulic fluids, brake fluids and anti-freezing fluids; and
(d) Other wastes from chemical or allied industries.
(Emphasis added). Subheading Note 2 to heading 3825, HTSUS, states that “[f]or the purposes of subheadings 3825.41 and 3825.49, “waste organic solvents” are wastes containing mainly organic solvents, not fit for further use as presented as primary products, whether or not intended for recovery of the solvents.”
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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 based on GRI 1, and if the headings 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 neither dispositive nor 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).
Protestant states that the products are undesirable and unavoidable by-products of specific chemical manufacturing processes that target pure material production through reaction, followed by distillation, fractionation or similar, to isolate the pure, desired chemical. Protestant also states that, as imported, the products are not usable and have no commercial use in that form. However, once the products are subjected to substantial processes, they can be used as blend components in the manufacture of automotive brake fluids. It is Protestant’s position that the pre-processed products are “waste organic solvents” classified under heading 3825, HTSUS.
We agree that the instant products do not fall within Chapter 29, HTSUS, as they are not the types of products listed as exemplars in the Note 1 to that chapter. Instead, CBP lab testing has revealed that the instant products consist of mixtures of mainly triethylene glycol compounds, which are defined as organic solvents, with trace amounts of other glycols and “unknown compounds.” While EN 38.25(D)(2) states that waste organic solvents are “generally derived from cleaning and washing processes” (emphasis added), the HTSUS section notes, chapter notes and headings are binding legal authority and do not require that they be so derived. The ENs, while informative and useful aids in determining the proper interpretation of the HTSUS, cannot limit the statutory provisions of the HTSUS. Note 6 to Chapter 38, HTSUS, does not require that “waste organic solvents” be derived from cleaning and washing processes, and subheading Note 2 to Chapter 3825, HTSUS, specifically describes the instant products. Thus, we find that the instant products are described by the terms of subheading 3825.49, HTSUS, and are classified as “waste organic solvents, other” in accordance with CBP laboratory reports that did not identify all of the constituents in the mixture.
HOLDING:
Pursuant to GRI 1, the instant GEH’s are classifiable under subheading 3825.49.00, HTSUS, which covers “Residual products of the chemical or allied industries, not elsewhere specified or included; municipal waste; sewage sludge; other wastes specified in note 6 to this chapter: Waste organic solvents: Other.” The column one, general rate of duty at the time of entry was “Free.” You are instructed to ALLOW the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website located at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division