CLA-2 OT:RR:CTF:CPM H256800 CkG
TARIFF NO: 1302.19.91, 2101.20.20, 3824.99.92
Port Director
U.S. Customs and Border Protection
Port of Newark
1100 Raymond Blvd., Ste. 402
Newark, NJ 07102
ATTN: Jennifer Tagliaferro, Supervisory Entry Specialist
Re: Application for Further Review of Protest No. 4601-12-101732; classification of cosmetics ingredients
Dear Port Director,
This is in reply to the Application for Further Review (AFR) of Protest No. 4601-12-101732, dated August 7, 2012, on behalf of Gattefosse Corporation (“Protestant”), contesting U.S. Customs and Border Protection’s (CBP) classification and liquidation of eight products, consisting of ingredients for cosmetics preparations, in heading 2909, HTSUS.
The subject merchandise was entered on September 27, 2011, in subheading 1302.19.91, HTSUS, as other vegetable saps and extracts. All eight products in the subject entry were liquidated in subheading 2909.44.01, HTSUS, as “Other monoalkyl ethers of ethylene glycol or of diethylene glycol.” In an additional communication dated August 21, Protestant changed their claimed classification for one product identified as Optivegetol Green Tea P108 Hydro BP, asserting that it should be classified in heading 2101, HTSUS, as an extract of tea, or preparation with a basis of an extract of tea.
FACTS:
At issue are the following eight products, all of which are incorporated into cosmetics preparations as active ingredients following importation:
Original Extract Orange Bio CO (item no. 54748COB)
Original Extract Grape CO (item no. 5397COB)
Fresh Cells Pumpkin PFE BP (item no. 5813BPE)
Gatuline Whitening BP (item no. 5324BPE)
Optivegetol Green Tea P108 Hydro BP (item no. 5369BPC)
Gatuline RC Bio BP (item no. 5742BPE)
Vegetol Sp GR051 Hydro BP (item no. 5085BPC)
Gatuline In-Tense BP (item no. 5773BFE)
The manufacturing process for each product is detailed below:
The Original Extract Orange Bio CO and Original Extract Grape CO are obtained by flash distillation of natural orange juice (Original Extract Orange Bio CO) and grape juice (Original Extract Grape CO) with no addition of any chemical substances. The flash distillation occurs during the concentration step of the fruit juice, in which the fruit juice passes through a high temperature chamber at a high rate of circulation speed in condensation equipment. The water is collected from condensation and subjected to a final sterilizing filtration. The final product is a clear to slightly cloudy colorless liquid stated to be 100% fruit water.
The Fresh Cells Pumpkin PFE BP is obtained by extraction of fresh pumpkin in water by an enzymatic extractive process, which the protestant also refers to as “digestion”. This process breaks down cell walls. A solution of phenoxyethanol, sorbic acid, xantham gum and ethylhexglycerin is added at the end of the extraction process to prevent contamination. The final product is an orange liquid containing 50% water, 10-24.9% pumpkin extract, and 1.8% phenoxyethanol, sorbic Acid, xanthan Gum and ethylhexylglycerin.
Gatuline Whitening BP consists of 75% natural licorice extract obtained through mechanical fractionation (also referred to by the protestant as maceration), with the remaining balance made up of ethoxydiglycol, sorbic acid, lactic acid and kojic acid. The extraction steps are as follows: Water and either propylene or butylene glycol are combined with the vegetable material in a kettle. The vegetable material is then left to macerate in the water and glycol mixture for 2 to 4 weeks. After 2 to 4 weeks the extraction process is complete and the kettle is drained. The water and glycol mixture now contains the actual vegetable extract. The remaining vegetable material is pressed to remove excess water and glycol, and the ethoxydiglycol, sorbic acid, and lactic acid are added. The extract product is then filtered to remove any solid particles floating in the liquid. Next the kojic acid is added. The extract is then subjected to a final filtration and sterilization. The final product is a brown-red liquid containing 75% of licorice extract, 10-24.9% kojic acid, 5-10% ethoxydiglycol, and 0.1% sorbic acid.
Optivegetol Green Tea P108 Hydro BP is an extract of dry green tea leaves. Like the Gatuline Whitening BP, it is obtained by mechanical fractionation/maceration, which involves combining water and propylene glycol with the vegetable material in a kettle and leaving it to macerate for 2 to 4 weeks, at which time the extraction is complete and kettle is drained. The final product is a brown liquid containing 10-24.9% botanical extract, 25-50% water, and 25-50% propylene glycol.
Gatuline RC Bio BP is extracted from Beech tree buds by mechanical fractionation/maceration and a cold aqueous extraction. The beach tree buds are subjected to an ultra high frequency stabilization, then the mechanical fractionation/maceration process (combining water and propylene glycol with the vegetable material in a kettle and leaving it to macerate for 2 to 4 weeks, at which time the extraction is complete and kettle is drained). Cold aqueous extraction is the next step, followed by reverse osmosis concentration and filtration. Benzoic acid and benzyl alcohol are added to prevent contamination, then the extract is subjected to a final sterilizing filtration. The final product is a liquid which is yellow to brown in appearance and contains roughly 75% water, 10-24.9% botanical extract, and 3.2% preservatives.
Vegetol Sp GR051 Hydro BP is a liquid extract of sage leaves and chamomile flowers, obtained by the mechanical fractionation/maceration process described above. The final product contains 25-50% water, 25-50% propylene glycol, 1-4.9% sage extract, and 0.1-0.9% chamomile extract.
Gatuline In-Tense BF is extracted from the herb Spilanthes acmella in alcohol. Then the solvent is distilled and the remaining plant extract after the distillation is solubilized in a medium chain triglyceride (MCT) ester. The MCTs are obtained from raw materials of vegetable origins. The final product is a pale yellow liquid containing roughly 75% triglycerides and 1-4.9% herbal extract.
ISSUE:
Whether the subject cosmetics ingredients are properly classified as extracts of heading 1302, HTSUS, or as chemical mixtures of heading 3824, HTSUS.
LAW AND ANALYSIS:
The matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii),(iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 4601-12-101732 was properly accorded to protestant 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.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
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).
The HTSUS provisions under consideration are as follows:
1302 Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products:
Vegetable saps and extracts:
1302.19 Other:
1302.19.91 Other
* * * *
2101 Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of these products or with a basis of coffee, tea or mate
2101.20 Extracts, essences and concentrates, of tea or maté, and preparations with a basis of these extracts, essences or concentrates or with a basis of tea or maté
2101.20.20 Extracts, essences and concentrates
* * * *
2909 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
Ether-alcohols and their halogenated, sulfonated, nitrated or nitrosated derivatives:
2909.44.01 2,2'-Oxydiethanol (Diethylene glycol, Digol)
* * * *
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 13 provides, in pertinent part, as follows:
1.- Heading 13.02 applies, inter alia, to liquorice extract and extract of
pyrethrum, extract of hops, extract of aloes and opium. The heading does not apply to :
…
(c) Extracts of coffee, tea or maté (heading 21.01)
Note 1 to Chapter 29 provides as follows:
1.- Except where the context otherwise requires, the headings of this Chapter
apply only to :
Separate chemically defined organic compounds, whether or not
containing impurities;
Note 3 to Chapter 33 provides as follows:
Headings 33.03 to 33.07 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packings of a kind sold by retail for such use.
* * * *
As a preliminary matter, we note that the subject products can only be classified in heading 3824, HTSUS, if they are not specified or included elsewhere in the HTSUS. Cargill, Inc. v. United States, 318 F. Supp. 2d 1279, 1278-88 (Ct. Int’l. Trade 2004) (characterizing heading 3824 as a basket provision). Accordingly, we initially consider whether the products are classifiable in headings 1302, 2101, and 2909, HTSUS.
Heading 2909, HTSUS, provides for, inter alia, ether alcohols and their derivatives. Note 1 to Chapter 29 specifies that Chapter 29 applies only to separate, chemically defined compounds. As all of the products at issue consist of mixtures of chemicals rather than separately defined chemical compounds, they are excluded form heading 2909, HTSUS.
Heading 1302 provides, inter alia, for vegetable extracts. The tariff term “extract” is not defined in the HTSUS, but EN 13.02 provides the following description of “extracts” for tariff classification purposes:
Vegetable saps and extracts.
The heading covers saps and extracts (vegetable products usually obtained by natural exudation or by incision, or extracted by solvents), provided that they are not specified or included in more specific headings of the Nomenclature (see list of exclusions at the end of Part (A) of this Explanatory Note)…
…Extracts may be in liquid, paste or solid form. “Tinctures” are extracts still dissolved in the alcohol by means of which they are extracted; the so called “fluid extracts” are solutions of extracts in, for example, alcohol, glycerol or mineral oil. Tinctures and fluid extracts are generally standardised (for instance, pyrethrum extract may be standardised by adding mineral oil to produce commercial grades with a standard pyrethrins content of, e.g., 2%, 20% or 25%). Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder (e.g., belladonna extract, to which powdered gum Arabic is added), or to obtain a standard strength (for instance, certain quantities of starch are added to opium in order to obtain a product containing a known portion of morphine). The addition of such substances does not affect the classification of these solid extracts.
The vegetable saps and extracts of this heading are generally raw materials for various manufactured products. They are excluded from the heading when, because of the addition of other substances, they have the character of food preparations, medicaments, etc…
…
The heading further excludes the following vegetable products, classified under more specific headings of the Nomenclature :
…
(c) Extracts of coffee, tea or maté (heading 21.01).
* * * *
According to this description, a fluid or solid extract of heading 1302 is a product obtained by solvent extraction and, where needed, certain post-extraction steps tailored to converting the form or standardizing the contents of the extract. In view of this, fluid solutions of dissolved vegetable material left in raw, unaltered form or supplemented with certain standardizers fall within the scope of heading 1302. See Headquarters Ruling Letter (HQ) W967653 and W968370, dated July 31, 2008 (ruling that pine bark extracts dissolved in ethanol and standardized at certain concentrations are classified in heading 1302). They remain within heading 1302 upon evaporation of the solvent to render the extract a solid, and the subsequent addition of inert substances that enable or facilitate the pulverization or standardization of the now-solid extract. See HQ H225004 and HQ 225008, dated November 10, 2015 (classifying mixtures of botanical extracts, dextrin, silicon dioxide, and cellulose in heading 1302 upon determining that the latter ingredients functioned merely as glidants and binders). However, as made clear by EN 13.02, any additions must not impart properties that, for example, increase the nutritional or pharmaceutical utility of the extract to the point that it is no longer raw. See Headquarters Ruling Letter (HQ) 962392, dated May 1, 2000 (ruling that an extract mixed with roots and berries was no longer a “raw material” classifiable in heading 1302); HQ H195716, dated February 19, 2015 (excluding from heading 1302 an extract supplemented with enriched soybean lecithin to improve the bioavailability of the extract’s polyphenols); New York Ruling Letter N245425, dated September 4, 2013 (classifying blend of various extracts with benzyl alcohol and glycerine used in personal care products in heading 3824); and NY N104435, dated May 17, 2010 (classifying mineral extract with added preservatives used in cosmetic products in heading 3824).
Furthermore, it is our long-standing position that, consistent with EN 13.02, heading 1302 applies to products that have been created through standard extraction methods, but not to those that have subsequently been enriched, purified, or otherwise refined so as to increase the contents of certain desirable compounds. See HQ H106785, dated October 14, 2010 (“CBP has determined that extensive processing can exclude a product from 1302.”); HQ 959099, dated May 1, 1998 (“As pointed out in the ENs to heading 1302, what is covered in the heading are vegetable products obtained by natural exudation or by incision or by solvent extraction.”). See HQ H195716, dated February 19, 2015; HQ H061203, dated August 12, 2010 (“There appears to be a limit on the degree and extent of purification that can occur for the product to remain in heading 1302. For instance, EN 13.02, explicitly excludes certain refined extracts of opium, quassia amare, papaw juice, and cashew nut shell liquid, once the refining process concentrates a certain group of chemical compounds to a particular point. Hence, poppy straw concentrates containing more than 50% alkaloids are excluded from heading 1302. Likewise, quassin, a chemical compound extracted and refined from the quassia amara shrub is classified in Chapter 29. Papain enzyme, once purified from the extraction process of papaw juice, is classified as an enzyme of Chapter [35]. And polymers extracted and refined from cashew nut shell liquid are classified in Chapter 39 as polymers.”); HQ H237599, dated May 27, 2015; and HQ W968424, dated December 19, 2006.
Original Extract Orange Bio CO, Original Extract Grape CO, Vegetol Sp GR051 Hydro BP, and Optivegetol Green Tea P108 Hydro BP are obtained by standard extraction methods, as described in the Explanatory Notes. They have no additives, and have not been subjected to multiple filtration and concentration steps. Accordingly, we agree with the protestant that the Original Extract Orange Bio CO, Original Extract Grape CO, and Vegetol Sp GR051 Hydro BP are classified as entered, in heading 1302, HTSUS. Optivegetol Green Tea P108 Hydro BP, however, cannot be classified in heading 1302, HTSUS, because Note to Chapter 13 excludes extracts of coffee, tea or mate from Chapter 13. Such extracts are classified in heading 2101, HTSUS. Optivegetol Green Tea P108 Hydro BP is an extract of green tea and is thus classified in heading 2101, HTSUS.
With respect to the Fresh Cells Pumpkin PFE BP we agree with the protestant that Fresh Cells Pumpkin PFE BP is correctly classified in heading 1302, HTSUS. Fresh Cells Pumpkin PFE BP contains the additives phenoxyethanol, sorbic acid, xantham gum and ethylhexglycerin. Phenoxyethanol and sorbic acid are common preservatives, and xantham gum is a thickener. These additives do not impart properties that increase the nutritional or pharmaceutical utility of the extract to the point that it is no longer raw. Ethylhexglycerin, while commonly used as a preservative, is also used as a skin conditioning and softening agent. As the stated application of Fresh Cells Pumpkin PFE BP is as skin care agent for “moisturizing and skin brightening products, nourishing lines for tired skin”, the ethylhexglycerin to the pumpkin extract may serve a dual purpose in this product, but as it only makes up 0.3% of the Fresh Cells Pumpkin PFE BP, it is not present in greater proportion than is required for such preservation.
However, we disagree with the protestant with respect to the classification of Gatuline RC Bio B. Gatuline RC Bio BP is subjected to several filtration and concentration steps that result in a product processed and purified beyond a simple extract of heading 1302, HTSUS. After the initial extraction by maceration, the extract is subjected to a further aqueous extraction process, then reverse osmosis concentration, then filtration, then the addition of preservatives, then a final filtration. This is a process engineered to significantly concentrate and target certain compounds in the beech tree bud extract.
With respect to the remaining items in dispute in the current case--Gatuline Whitening BP, and Gatuline In-Tense BP, we find that they are not extracts of heading 1302, HTSUS, due the addition of Kojic acid and tryglycerides, which enhance the suitability of these products for the specific application for which they are designed—i.e., skin lightening and anti-aging—thus placing them outside the scope of heading 1302, HTSUS.
Gatuline Whitening BP, as suggested by the name, is a skin lightening product. It is produced by extraction of licorice root via fractionation or maceration and the subsequent addition of additives and preservatives. We agree that the additives ethoxydiglycol and sorbic acid in the Gatuline Whitening BP are common preservatives that do not affect the performance of the product or make it particularly suitable for a specific use. However, the addition of Kojic acid, which itself is known to lighten skin color, does impart properties which increase the utility of the final product. Kojic acid is an inhibitor of the enzyme tyrosinase, which plays a critical role in the formation of the pigment melanin. By decreasing tyrosinase activity, kojic acid reduces pigmentation of the skin, thus having the effect of lightening skin tone. Kojic acid itself is a common treatment for hyperpigmentation such as freckles, and is sold in the form of kojic acid creams and lotions. We further note that lactic acid is also used in skin lightening treatments, as an exfoliant and for its potential effect as an inhibitor of melanin production. Lactic acid is an alpha-hydroxy acid (AHA). AHAs are used as exfoliants because the small size of AHA molecules size allows for to penetration and removal of the top layers of the skin, where hyperpigmented cells can accumulate. There is also evidence that lactic acid, like kojic acid, has an inhibitory effect on tyrosinase activity and thus on the synthesis of melanin. Given that the purpose of Gatuline Whitening BP is to lighten skin tone, the addition of kojic and lactic acid to the initial licorice root extract specifically contributes to the pharmaceutical or cosmetic utility of the final product.
With respect to the Gatuline In-Tense BP, we also find that it is not correctly classified in heading 1302, HTSUS. The included medium-chain triglycerides render the Gatuline In-Tense BP particularly suitable for a specific rather than a general use. Our research indicates that hydrogenated vegetable oil acts boasts emollient properties that can boost the efficacy of the cosmetic products into which it is incorporated. The addition of medium chain triglycerides (MCTs) to the Gatuline In-Tense BP appear intended to specifically contribute to the “anti-aging” effects of the product. MCTs such as coconut oil are also commonly used in cosmetics as carriers, thickeners and standardizers, but when they make up 75% of the final product, it suggests that they play a more significant role.
As the Gatuline RC Bio BP, Gatuline Whitening BP or Gatuline In-Tense BP are not properly classified in heading 1302, HTSUS, we accordingly consider whether they are classifiable in heading 3824, HTSUS, which provides for chemical products and preparations not elsewhere specified or included. EN 38.24 states, in pertinent part, as follows:
(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS
…
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).
According to EN 38.24, “chemical preparations” within the meaning of heading 3824 encompass both non-aqueous solutions and mixtures of natural and chemically modified substances. The instant products, as mixtures of extracted botanical material and additional chemicals such as kojic acid, triglycerides and preservatives, are therefore described by heading 3824, HTSUS. This determination is consistent with CBP’s practice of classifying in heading 3824 products that cannot be described as extracts of heading 1302 or as products of other headings providing for chemical substances. See HQ H195716, dated February 19, 2015.
HOLDING:
By application of GRI 1, Original Extract Orange Bio CO, Original Extract Grape
CO, Vegetol Sp GR051 Hydro BP, and Fresh Cells Pumpkin PFE BP are classified in heading 1302, HTSUS, specifically subheading 1302.19.91, HTSUS, which provides for “Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Vegetable saps and extracts: Other: Other.” The 2011 column one, general rate of duty is Free.
By application of GRI 1, Optivegetol Green Tea P108 Hydro BP is classified in heading 2101, HTSUS, specifically subheading 2101.20.20, HTSUS, which provides for “Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof: Extracts, essences and concentrates, of tea or maté, and preparations with a basis of these extracts, essences or concentrates or with a basis of tea or maté: Extracts, essences and concentrates.” The 2011 column one, general rate of duty is Free.
By application of GRI 1, Gatuline Whitening BP, Gatuline RC Bio BP and Gatuline In-Tense BP are classified in heading 3824, HTSUS, specifically subheading 3824.99.92, 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 2011 column one, general rate of duty is 5% ad valorem.
You are instructed to allow the protest with respect to the classification of Original
Extract Orange Bio CO, Original Extract Grape CO, Vegetol Sp GR051 Hydro BP, Fresh Cells Pumpkin PFE BP, and Optivegetol Green Tea P108 Hydro BP.
You are instructed to deny the protest with respect to the Gatuline Whitening BP, Gatuline RC Bio BP and Gatuline In-Tense BP.
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 Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public online at http://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