CLA–2 OT:RR:CTF:TCM H233358 AMM
Port Director
U.S. Customs and Border Protection
Service Port of Port Huron
526 Water Street - Room 301
Port Huron, MI 48060-5471
Attn: Elena Pietron
RE: Request for Internal Advice; Classification of Hydrophobic Fumed Silicas
Dear Ms. Pietron:
This is in response to your Request for Internal Advice, dated June 23, 2012, regarding the classification of certain hydrophobic fumed silicas, under the Harmonized Tariff Schedule of the United States (HTSUS), entered by Wacker Chemical Corp. (Wacker). In reaching our decision, Customs and Border Protection (CBP) has taken into consideration your comments, an in-person meeting held pursuant to 19 C.F.R. §177.4, with representatives from CBP Headquarters and Wacker on July 11, 2013, and four submissions from Wacker, dated May 21, 2012, January 25, 2013, July 7, 2013, and July 22, 2013.
FACTS:
On June 23, 2013, The Port of Port Huron (the Port) requested internal advice, pursuant to 19 C.F.R. §177.11(b)(2), with regard to the classification of products, imported by Wacker, described as “HDK Hydrophobic Fumed Silicas.” See Wacker Submission dated May 21, 2012, page 1.
In their submission dated May 21, 2012, Wacker described their products in the following manner:
Wacker HDK is a family of pyrogenic silicas obtained by reacting silicon chloride (SiCl4) with hydrogen (4H2) and oxygen (O2) to yield silica (SiO2+4HCl). Initially, “primary particles” having a size of between 5 and 30nm are produced at a reaction temperature of between 1000o and 1200o Celsius. Following collisions, these particles then aggregate into structures measuring 100-250nm, at a temperature of 800oC. Subsequently, the particles agglomerate during the cooling process, yielding chains of silica molecules having a particle size of approximately 10 angstroms. Pyrogenic silica is always obtained as hydrophilic fumed silica, and is rendered hydrophobic by subsequent treatment. The hydrophilic nature of pyrogenic silica results from its surface chemistry. Silicon atoms on the surface of natural, unmodified fumed silica are surrounded by only two, rather than four, oxygen atoms. As a result, the silicon is susceptible to reacting with water molecules present in the air to form silanol groups (Si-OH). The surface of unmodified silica contains both solixane (O-Si-O) groups and silanol (Si-OH) groups. The silanol groups cause the silica to be hydrophilic. Thereafter, pyrogenic silica can be reacted with silanes or silicone oil. These reactions deposit hydrocarbon moieties onto the surface of the silica. These moieties form weak ionic or hydrogen bonds with the silanol groups. By “tying up” the silanol groups, as it were, the moieties inhibit the product’s hydrophilic properties and act as a preservative, to preserve the integrity of the molecule. Depending on the silane or silicone oil used, the number of residual silanol groups on the surface of the molecule can be reduced by 30% to 70%, for greater or lesser loss of preservation.
See Id., at page 3. Wacker indicates that the products are used as “thixotropic (thickening) agent[s] in paints, coatings and a wide range of polymer systems.” See Wacker Submission, dated July 22, 2013, page 2.
ISSUE:
Whether the instant hydrophobic surface modified fumed silicas are properly classified under heading 2811, HTSUS, as “Other inorganic acids and other inorganic oxygen compounds of nonmetals”, or under heading 3824, HTSUS, as “[C]hemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included”.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 2013 HTSUS provisions under consideration are:
2811 Other inorganic acids and other inorganic oxygen compounds of nonmetals:
Other inorganic oxygen compounds of nonmetals:
2811.22 Silicon dioxide:
2811.22.50 Other
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3824 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
Note 1 to Chapter 28, HTSUS, states, in pertinent part:
Except where the context otherwise requires, the headings of this chapter apply only to:
(a) Separate chemical elements and separate chemically defined compounds, whether or not containing impurities;
* * *
(d) The products mentioned in (a), (b) or (c) above with an added stabilizer (including an anticaking agent) necessary for their preservation or transport;
* * *
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 the headings. It is CBP’s practice to consult, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The General EN to Chapter 28 states, in pertinent part:
(A) Chemically defined elements and compounds. (Note 1)
Separate chemical elements and separate chemically defined compounds containing impurities, or dissolved in water, remain classified in Chapter 28.
The term “impurities” applies exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). The substances may result from any of the factors involved in the process and are principally the following:
(a) Unconverted starting materials.
(b) Impurities present in the starting materials.
(c) Reagents used in the manufacturing process (including purification).
(d) 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 use, they are not regarded as permissible impurities. Such elements and compounds are excluded from Chapter 28 when they are dissolved in solvents other than water, unless the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport (in which case the solvent must not render the product particularly suitable for some types of use rather than for general use).
* * *
Separate chemically defined elements and compounds as described above, put up with an added stabiliser necessary for their preservation or transport, remain classified in this Chapter. For example, hydrogen peroxide stabilised by addition of boric acid remains classified in heading 28.47; but sodium peroxide mixed with catalysts (for production of hydrogen peroxide) is excluded from Chapter 28 and is classified in heading 38.24. Products added to certain chemicals to keep them in their original physical state are also to be regarded as stabilisers, provided that the quantity added in no case exceeds that necessary to achieve the desired result and that the addition does not alter the character of the basic product and render it particularly suitable for specific use rather than for general use. By application of these provisions anti-caking agents may be added to the products of this Chapter. Such products with added water-repellents are, on the other hand, excluded since such agents modify the original characteristics of the products.
* * *
EN 28.11 states, in pertinent part:
(M) SILICON COMPOUNDS
Silicon dioxide (pure silica, silicic anhydride, etc.) (SiO2). Obtained by treating silicate solutions with acids, or by decomposing silicon halides by the action of water and heat. It can be either in amorphous form (as a white powder “silica white”, “flowers of silica”, “calcined silica”; as vitreous granules – “vitreous silica”; in gelatinous condition – “silica frost”, “hydrated silica”), or in crystals (tridymite and cristobalite forms). Silica resists the action of acids; fused silica is therefore used to make laboratory apparatus and industrial equipment which can be suddenly heated or cooled without breaking (see General Explanatory Note to Chapter 70). Finely powdered silica is used, e.g., as a filler for various types of natural and synthetic rubber and other elastomers, as a thickening or thixotropic agent for various plastics, printing ink, paints, coatings and adhesives. Fumed silica (made by combustion of silicon tetrachloride or trichlorosilane in hydrogen-oxygen furnaces) is also used in chemi-mechanical polishing of silicon wafers and as a free-flow or anti-settling agent for a variety of materials. Activated silica gel is employed to dry gases.
* * *
EN 38.24 states, in pertinent part:
(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS
With only three exceptions (see paragraphs (7), (19) and (32) below), this heading does not apply to separate chemically defined elements or compounds. The chemical products classified here are therefore products whose composition is not chemically defined, whether they are obtained as by-products of the manufacture of other substances (this applies, for example, to naphthenic acids) or prepared directly. The chemical or other preparations are either mixtures (of which emulsions and dispersions are special forms) or occasionally solutions. Aqueous solutions of the chemical products of Chapter 28 or 29 remain classified within those Chapters, but solutions of these products in solvents other than water are, apart from a few exceptions, excluded therefrom and accordingly fall to be treated as preparations of this heading. The preparations classified here may be either wholly or partly of chemical products (this is generally the case) or wholly of natural constituents (see, for example, paragraph (24) below).
* * *
Subject to the above conditions, the preparations and chemical products falling here include:
* * *
(28) Hydrated silica gel coloured with cobalt salts, used as a desiccating agent which indicates by its colour when it is no longer operating.
* * *
In the case of Degussa Corp. v. United States, 508 F. 3d 1044 (Fed. Cir. 2007) (Degussa II), the Court of Appeals for the Federal Circuit (CAFC) reversed the holding in the Court of International Trade (CIT) that fumed silica is a separate chemical compound. See Degussa Corp. v. United States, 452 F. Supp. 2d 1310 (Ct. Int’l. Trade 2006) (Degussa I). The CIT described this product in the following manner:
The fumed silica has a basic structure of silicon and oxygen atoms in a tetrahedral arrangement where four oxygen atoms surround a central silicon atom. As initially produced, at the surface of each silica particle are silicon and oxygen atoms with unfilled chemical bonds and valences capable of reaction in their ambient environment. That reaction can be with water vapor engendered by the oxygen-hydrogen gas flame. When that is the reaction, the result is a product surface that contains inert siloxane groups (Si-O-Si) and active silanol groups (SiOH). When that is the reaction, the result is hydrophilic. The plaintiff produces the AEROSIL(R) at issue herein via reactions with the substances set forth [as stipulated]. They block the formation of additional silanol groups on the silica surface which would otherwise result from exposure to the ambient environment. Depending on the silane used, the residual silanol groups can range from 30 to 70 percent of the original number on an untreated surface. They are needed for the particular product's intended performance. Whatever the precise treatment, however, does not affect the bulk of the silica, which retains its regular SiO2 structure. In the end, the record shows and the court finds that the hydrophobic silica has lower moisture adsorption (or wettability) that allows it to be incorporated into certain organic solvents and polymers faster and easier than hydrophilic.
See Degussa I, 452 F. Supp. 2d, at 1314-1315 (internal citations and footnotes omitted). See also New York Ruling Letter (NY) B80326, dated February 25, 1997. IN reversing the CIT’s holding, the CAFC found that:
The surface modification has changed the nature of the silica particle from hydrophilic (i.e. water-attractive) to hydrophobic (i.e. water-repellent). … The hydrocarbon moieties are added to the silicon dioxide for the purpose of rendering the silica hydrophobic and are therefore impermissible impurities. Hence the product at issue cannot be classified under Chapter 28.
Degussa II, at 1048. Hence, the CAFC held that the products at issue contained impermissible impurities (water-repellants) and therefore, could not be classified under Chapter 28, HTSUS, and that the products were properly classified under heading 3824, HTSUS. See Degussa II, at 1050-1051.
According to the product description given by Wacker, there is no substantial distinction between the products currently at issue and the products under consideration in NY B80326, Degussa I, and Degussa II. The instant merchandise and the products under consideration in the Degussa cases are both fumed silica, consisting of silicon dioxide with modified surface chemistry due to treatment with hydrocarbon moieties.
Wacker asserts that CBP is not bound by the CAFC’s decision in Degussa II, with respect to the instant merchandise. See Wacker Supplemental Submission, dated July 7, 2013, page 2. However, Wacker does not argue that the hydrocarbon moieties added to their silicon dioxide are a “permissible impurity” under Note 1(a) to Chapter 28, HTSUS. Instead, they argue that the hydrocarbon moieties are a “stabilizer,” and that the instant fumed silica is properly classified under heading 2811, HTSUS, by operation of Note 1(d) to Chapter 28, HTSUS. Wacker also asserts that the CAFC did not specifically address this argument in their Degussa II decision. As an alternative, Wacker argues that the instant products are a “derivative” of silicon dioxide, and as such, remain classified under heading 2811, HTSUS.
Although the term “stabilizer” is not defined in the HTSUS, General EN(A) to Chapter 28 states, in pertinent part:
Products added to certain chemicals to keep them in their original physical state are also to be regarded as stabilisers, provided that the quantity added in no case exceeds that necessary to achieve the desired result and that the addition does not alter the character of the basic product and render it particularly suitable for specific use rather than for general use. By application of these provisions anti-caking agents may be added to the products of this Chapter. Such products with added water-repellents are, on the other hand, excluded since such agents modify the original characteristics of the products.
In Headquarters Ruling Letter (HQ) 962756, dated April 19, 2000, CBP considered the classification of calcium carbonate powder with fatty acids bound to the exterior of the powder. In that case, the calcium carbonate at issue was subjected to a “surface treatment” where fatty acid radical anions were fixed to the surface of the calcium carbonate particles. See HQ 962756. These anions lent water-repellency to the calcium carbonate particles and prevented them from agglomerating. The products were used to improve viscosity and thixotropy control in sealants and coatings. CBP found that, because the hydrocarbon chains of the fatty acids bound to the exterior of the calcium carbonate impart water-repellency to the product, the additives modified the characteristics of the original product and could not be considered a mere stabilizer, permitted under Note 1(d) to Chapter 28, HTSUS. See HQ 962756.
The instant product consists of silicon dioxide whose surface properties have been modified by the addition of hydrocarbon moieties. These moieties are added to the surface of the silicon dioxide particles specifically to inhibit the product’s hydrophilic properties – to repel water. As Wacker states in their submissions, untreated silicon dioxide will absorb water from the air. The treatment is used to limit the amount of atmospheric water absorption, by “tying up” the molecules that would normally do so. Because the hydrocarbon moieties are added water repellents, they cannot be considered stabilizers under Note 1(d) to Chapter 28, HTSUS. See General EN(A) to Chapter 28; HQ 962756.
Wacker argues in their submission that the case of Roche Vitamins, Inc. v. United States, 922 F. Supp. 2d 1353 (Ct. Int’l. Trade, June 14, 2013), supports their position that the hydrocarbon moieties are stabilizers within the meaning of Note 1(d) to Chapter 28, HTSUS.
In this case, the CIT considered whether the additional ingredients added to the Beta-Tab product to render it highly suitable for tableting made it particularly suitable for a specific use. See Roche, 922 F. Supp. 2d, 1362-63. The CIT referred to EN 29.36, which states:
The products of this heading may be stabilized for the purposes of preservation or transport … provided that the quantity of stabilizer added or the processing in no case exceeds that necessary for their preservation or transport and that the addition or processing does not alter the character of the basic product and render it particularly suitable for a specific use rather than for general use.
Roche, 922 F. Supp. 2d, 1358 (quoting EN 29.36). The CIT found that “the BetaTab’s additional non-beta-carotene ingredients, such as stabilizers, do not make the merchandise particularly suitable for a specific use. Id., at 1363. Because addition of the stabilizer was permitted under Note 1(f) to Chapter 29, HTSUS, classification under heading 2936, HTSUS was proper. Id., at 1364. However, in the instant case of the fumed silicas, the hydrocarbon moieties are considered water repellants, and as such, are not considered stabilizers. See General EN(A) to Chapter 28. Therefore, the Roche case does not support Wacker’s position.
As an alternative, Wacker argues that the instant fumed silicas are “derivatives” of silicon dioxide, and as such, should remain classified under heading 2811, HTSUS. Derivatives are specifically provided for in many of the headings of Chapter 29, HTSUS. In some cases, derivatives are provided for at the subheading level rather than the heading level. However, none of the headings or subheadings of Chapter 28, HTSUS, (with the exception of heading 2853, HTSUS) provide for derivatives. Heading 2811, HTSUS, provides simply for “Other inorganic acids and other inorganic oxygen compounds of nonmetals”. It does not provide for derivatives. As such, CBP declines Wacker’s invitation to expand the scope of heading 2811, HTSUS.
Wacker cites to the case of E.T. Horn Company v. United States, 367 F. 3d 1326 (Fed. Cir. 2004), for the proposition that, absent contrary legislative intent, a provision for a named chemical should include all forms of the chemical, including derivatives thereof. See Wacker Submission, dated January 25, 2013, page 9. However, E.T. Horn does not stand for this proposition. Rather, E.T. Horn, 367 F. 3d, at 1331, states:
Heading 2909 covers “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.” As the plain terms of the heading suggest, HTSUS 2909 covers all ethers, including their various derivatives.
First, unlike the heading text at issue in the instant case, heading 2909, HTSUS, specifically includes derivatives of the named compound. Second, the issue of whether dichloroethyl ether was a derivative of subheading 2909.11, HTSUS, or an other ether of subheading 2909.19 was not reached. See E.T. Horn, 367 F. 3d, at 1336. As such, E.T. Horn does not support Wacker’s argument.
The instant fumed silica, which consists of silicon dioxide and hydrocarbon moieties, is not a separate chemical element or separate chemically defined compound. See Note 1(a) to Chapter 28, HTSUS. The hydrocarbon moieties are not a permissible impurity, allowed under Note 1(a) to Chapter 28, HTSUS. See Degussa II. Furthermore, the hydrocarbon moieties are not a “stabilizer” allowed under Note 1(d) to Chapter 28, HTSUS. See General EN(A) to Chapter 28. Therefore, the instant fumed silica is not properly classified under heading 2811, HTSUS.
Heading 3824, HTSUS, provides in pertinent part for “[C]hemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included”. The instant product is a “preparation” of the chemical industry, in that it is “a substance specially prepared, or made up for its appropriate use or application,” namely that of a thixotropic agent for paints, coatings, and a wide range of polymer systems. See Orlando Food Corp. v. United States, 140 F.3d 1437, 1441 (Fed. Cir. 1994). It is not excluded from Chapter 38, HTSUS, by any of the Notes to that Chapter. As discussed above, it is not properly classified under heading 2811, HTSUS. Therefore, the instant fumed silica product is properly classified under heading 3824, HTSUS, specifically under subheading 3824.92.90, HTSUS, which provides for: “[C]hemical products and preparations of the chemical or allied industries … not elsewhere specified or included: Other: Other: Other: Other: Other”.
HOLDING:
By operation of GRI 1, the instant HDK Hydrophobic Fumed Silica products are properly classified under heading 3824, HTSUS, specifically under 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”. The general, column one rate of duty is 5% ad valorem.
Duty rates are provided for your convenience, and are subject to change. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Myles Harmon, Director
Commercial Trade and Facilitation Division