CLA-2 OT:RR:CTF:TCM H243645 TNA
Ms. Joyce Mikesell
Basic American Foods
2999 Oak Road, Suite 400
Walnut Creek, CA 95496
RE: Modification of HQ 966202, NY I89048, and HQ H954208; Classification of dried potatoes
Dear Ms. Mikesell:
This letter is in reference to Headquarters Ruling Letter (“HQ”) 966202, issued to you on February 21, 2003, and New York Ruling Letter (“NY”) I89048, issued to you on December 23, 2002, concerning the tariff classification of dried potatoes. There, U.S. Customs and Border Protection (“CBP”) classified the subject potatoes in subheading 2005.20.00, Harmonized Tariff Schedule of the United States (“HTSUS”), as potatoes, "prepared or preserved otherwise than by vinegar or acetic acid, other."
This letter also concerns HQ 954208, dated September 14, 1993, which also classified dehydrated diced potatoes in subheading 2005.20.00, HTSUS. We have reviewed HQ 966202, NY I89048, and HQ 954208 and found them to be partly in error. For the reasons set forth below, we hereby modify HQ 966202, NY I89048, and HQ 954208.
Notice of the proposed action was published in the Customs Bulletin, Vol. 49, No. 16, on April 22, 2015. CBP received no comments in response to this notice.
FACTS:
In HQ 966202 and NY I89048, CBP classified dried, sliced potatoes and diced potatoes, each with added sodium bisulfite. Both are packed in multi-wall paper bags containing from 20 to 45 kilograms, net weight. In addition, the diced potatoes measure 3/8 inch by 3/8 inch by 3/8 inch. In HQ 966202 and NY I89048, CBP classified this merchandise in subheading 2005.20.00, HTSUS, as “Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading 2006: potatoes.”
In HQ 954208, CBP classified dried, diced potatoes, which measure 3/8 inch by 3/8 inch by 3/8 inch and contained the preservative sodium bisulfite. In HQ 954208, CBP also classified potatoes called “Slice-1/8” Random cut,” which were also treated with sodium bisulfite. CBP classified this merchandise in subheading 2005.20.00, HTSUS.
ISSUE:
Whether dried potatoes treated with sodium bisulfate are classified in heading 0711, HTSUS, as provisionally preserved vegetables that are unsuitable for immediate consumption, in heading 0712, HTSUS, as dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared, or in heading 2005, HTSUS, as other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading 2006?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) 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:
0711 Vegetables provisionally preserved (for example, by sulfur dioxide gas, in brine, in sulfur water or in other preservative solutions), but unsuitable in that state for immediate consumption:
0712 Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared:
2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading 2006:
Note 3 to Chapter 7, HTSUS, provides, in pertinent part, that:
Heading 0712 covers all dried vegetables of the kinds falling in headings 0701 to 0711, other than:…
(c) Flour, meal, powder, flakes, granules and pellets of potatoes (heading
1105);
Note 1 to Chapter 20, HTSUS, provides, in pertinent part, that:
This chapter does not cover:
(a) Vegetables, fruit or nuts, prepared or preserved by the processes specified in chapter 7, 8 or 11;
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not 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 (Aug. 23, 1989).
The General EN to Chapter 7, HTSUS, provides, in pertinent part, the following:
This Chapter covers vegetables, including the products listed in Note 2 to the Chapter, whether fresh, chilled, frozen (uncooked or cooked by steaming or boiling in water), provisionally preserved or dried (including dehydrated, evaporated or freeze-dried). It should be noted that some of these products when dried and powdered are sometimes used as flavouring materials but nevertheless remain classified in heading 07.12…
Vegetables not presented in a state covered by any heading of this Chapter are classified in Chapter 11 or Section IV. For example, flour, meal and powder of dried leguminous vegetables and flour, meal, powder, flakes, granules and pellets of potatoes are classified in Chapter 11, and vegetables prepared or preserved by any process not provided for in this Chapter fall in Chapter 20.
The EN to heading 0711, HTSUS, states the following:
This heading applies to vegetables which have been treated solely to ensure their provisional preservation during transport or storage prior to use (e.g., by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), provided they remain unsuitable for immediate consumption in that state.
Vegetables covered by this heading are generally packed in casks or barrels, and are mainly used as raw materials for manufacturing purposes; the principal varieties are onions, olives, capers, cucumbers, gherkins, mushrooms, truffles and tomatoes.
However the heading excludes goods which, in addition to having been provisionally preserved in brine, have also been specially treated (e.g., by soda solution, by lactic fermentation); these fall in Chapter 20 (for example, olives, sauerkraut, gherkins and green beans).
The EN to heading 0712, HTSUS, provides, in pertinent part, the following:
This heading covers vegetables of headings 07.01 to 07.09 which have been dried (including dehydrated, evaporated or freeze-dried) i.e., with their natural water content removed by various processes. The principal kinds of vegetables treated in this way are potatoes, onions, mushrooms, wood ears (Auricularia spp.), jelly fungi (Tremella spp.), truffles, carrots, cabbage and spinach. They are usually prepared in strips or slices, either of one variety or mixed (julienne).
The heading also covers dried vegetables, broken or powdered, such as asparagus, cauliflower, parsley, chervil, onion, garlic, celery, generally used either as flavouring materials or in the preparation of soups.
The EN to heading 2005, HTSUS, provides, in pertinent part, the following:
The term “vegetables” in this heading is limited to the products referred to in Note 3 to this Chapter. These products (other than vegetables prepared or preserved by vinegar or acetic acid of heading 20.01, frozen vegetables of heading 20.04 and vegetables preserved by sugar of heading 20.06) are classified in the heading when they have been prepared or preserved by processes not provided for in Chapter 7 or 11.
Such products fall in the heading irrespective of the type of container in which they are put up (often in cans or other airtight containers).
These products, whole, in pieces or crushed, may be preserved in water, in tomato sauce or with other ingredients ready for immediate consumption. They may also be homogenised or mixed together (salads).
In HQ 966202, NY I89048, and HQ 954208, CBP classified the subject merchandise in subheading 2005.20.00, HTSUS, which provides for “Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading 2006: Potatoes.” In HQ 954208, we reasoned that because these products were excluded from heading 0712, HTSUS, because they have been prepared or preserved further than the level contemplated by the heading. We also reasoned that sodium bisulfite is a preservative that prevents the loss of color during storage and helps retain flavor.
Upon reconsideration, we note that in HQ H226236, dated July 29, 2013, CBP defined to the term “preserved” by stating that:
It has been held that preservation in a tariff sense ordinarily involves cooking, salting, drying, smoking, curing, or the application of some method or process whereby the fresh or natural condition of the article is so changed as to be more of less a permanent preservation and that something more must be done to it than merely to arrest change and decomposition while in transit.
See HQ H226236, citing Crawfish Processors Alliance v. United States, 431 F. Supp. 2d 1342, 1349 (Ct. Int’l. Trade 2006), aff’d 483 F.3d 1358 (Fed. Cir. 2007) (quoting Frosted Fruit Prods. Co. v. United States, 18 Cust. Ct. 119, 120 (1947)). See also Bruce Duncan Co., Inc., a/c Staalkat of America, Inc. v. United States, 67 Cust. Ct. 430, 434 (1971) (citing Stone & Downer Co. v. United States, 17 CCPA 34 (1929); United States v. J.H. Brown, 46 CCPA 1, 8 (1958).
Sodium bisulfite is widely used in food to preserve color and flavor. See Food Chemicals Codex at 1075 (9th Ed. 2014); http://www.veggie sensations.com/sodium-bisulfite/; http://www.foodinsight.org/IFIC_Review_Sodium_in_Food_and_Health. The instant dried potatoes with sodium bisulfite are imported ready to be eaten, and are not used as raw materials for manufacturing purposes. As such, they do not meet the terms of heading 0711, HTSUS. See also EN 07.11.
In HQ H226236, CBP states that “the word ‘prepared,’ in a tariff sense, means, ordinarily, that a commodity has been so processed as to be advanced in condition and made more valuable for its intended use.” See HQ H226236, citing Crawfish Processors Alliance, 431 F. Supp. 2d 1342, 1349 (Ct. Int’l. Trade 2006), aff’d 483 F.3d 1358 (Fed. Cir. 2007) (quoting Frosted Fruit Prods., 18 Cust. Ct. 119, 120 (1947)). See also Bruce Duncan Co., Inc., 67 Cust. Ct. 430, 434 (1971) (citing Stone & Downer Co., 17 CCPA 34 (1929); United States v. J.H. Brown, 46 CCPA 1, 8 (1958). We further stated that:
CBP has previously found that processes which change the taste of a food product, or render it suitable for a particular use, can alter its essential character, such that it becomes a “prepared fish” of heading 1604, HTSUS. See HQ 560931, dated July 8, 1998 (where the spicing and breading of crawfish tails altered the taste and use of the product such that it resulted “in the creation of a new article with a character and use which is different from that possessed by the article prior to processing.”); HQ H034679, dated September 15, 2008 (“The process by which the breading is added to the subject [cod] fillets indicates that the resulting products are permanently changed in terms of their taste and end-use.”).
See HQ H226236. In HQ H226263, CBP classified fish that had been treated with a “tasteless smoke” which was designed only to preserve the color of the fish for up to a year. This process was not designed to change the taste or anything else about the fish. As a result, CBP stated that:
fillets treated with tasteless smoke are suitable for any of the same uses that untreated fillets can be subject to. The process does not render the treated fillets suitable for any particular purpose. The red color is specifically intended to make the tuna fillets appear fresh, and thus more attractive to the average consumer, but does not extend the shelf life of the product. Fillets that are treated or untreated can be put to all the same uses, whether fried, baked, broiled, or eaten raw. The fact that the color makes the product appear to be of a higher quality has no effect on the uses of the product. Hence, the tasteless smoke process does not advance the tuna in condition so as to make it more valuable under Frosted Fruit. Therefore, it is CBP’s conclusion that the tasteless smoke process does not create a “prepared tuna.”
See HQ H226236.
Similarly, in the present case, the sodium bisulfite with which the subject potatoes have been treated simply preserves the color and taste of these potatoes without actually changing the taste. Thus, it does not actively produce a considerably longer shelf life. In fact, in its ruling request for NY I89048 and its request for reconsideration in HQ 966202, the importer of these products notes that the sodium bisulfite is used to “preserve freshness, color and flavor, not to enhance the product.” Furthermore, potatoes that are treated with sodium bisulfite can be put to all the same uses as fresh potatoes, whether fried, baked, or turned into potato chips, hash browns, or any of the other myriad uses of potatoes. As a result, potatoes treated with sodium bisulfite do not meet the definitions of “prepared” or “preserved.”
The subject potatoes have been dried, cut and sliced, but they have not been further prepared within the meaning of this heading. As a result, we find that these potatoes meet the terms of heading 0712, HTSUS, and will be classified there. Classification in heading 0712, HTSUS, is also consistent with prior CBP rulings that have classified tomatoes preserved with sodium bisulfite or a similar preservative in heading 0712, HTSUS. See NY N239661, dated March 26, 2013. Because the subject potatoes are classified in heading 0712, HTSUS, they cannot be classified in heading 2005, HTSUS, under Note 1 to Chapter 20, HTSUS.
HOLDING:
Under the authority of GRI 1, the subject potatoes are classified in heading 0712, HTSUS. They are specifically classified in subheading 0712.90.30, HTSUS, which provides for “Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared: Other vegetables; mixtures of vegetables: Potatoes whether or not cut or sliced but not further prepared.” The column one general rate of duty is 2.3¢/kg.
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:
HQ 966202, dated February 21, 2003, NY I89048, dated December 23, 2002, and HQ 954208, dated September 14, 1993, are MODIFIED with respect to the diced or sliced potatoes with added sodium bisulfite.
In accordance with 19 U.S.C. §1625(c), this action will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division