CLA-2 OT:RR:CTF:TCM H261123 NCD
Bob Glover
L.E. Coopersmith, Inc.
525 S. Douglas Street
El Segundo, CA 90245
RE: Ruling Request; Classification of a mother tincture comprised of phosphorus dissolved in ethanol
Dear Mr. Glover:
This is in response to the June 24, 2014 e-ruling request, issued by L.E. Coopersmith, Inc. on behalf of Botanical Supply Inc., for a binding ruling from U.S. Customs and Border Protection (CBP) concerning the tariff classification of a mother tincture comprised of phosphorus dissolved in ethanol under the Harmonized Tariff Schedule of the United States (HTSUS). CBP’s National Commodity Specialist Division (NCSD) in New York forwarded your request to us for a response.
FACTS:
According to your submissions, the subject tincture consists of a mixture comprised 99.9 percent of ethyl alcohol, i.e., ethanol, and 00.1 percent of white phosphorus that is to be diluted and subsequently added to a four-ounce homeopathic baby cough syrup. You state that the tincture is produced in accordance with the Homeopathic Pharmacopeia of the United States (HPUS). You summarize the pre-importation production process for the tincture as follows:
A solution comprised 95 percent of ethyl alcohol and 5 percent of water is placed into a container;
Solid lumps/sticks of white phosphorus are submerged in the solution;
While submerged, the white phosphorus is broken and cut into small pieces;
The mixture is heated and stirred until all of the white phosphorus has dissolved;
The mixture is filtered to remove undissolved white phosphorus particles.
When imported, the tincture qualifies as a 3X HPUS dilution on the homeopathic dilution scale. Following importation, it is further diluted with mixtures comprised 20 percent of water and 80 percent alcohol to produce a 11X HPUS dilution, at which point it is added to the “Premix”, a mixture comprised of several active ingredients in the cough syrup. The Premix is in turn diluted by a factor of 10 with water and glycerine and supplemented with several inactive ingredients to create cough syrup.
In addition to a description of the tincture’s production process, you have submitted a label for the cough syrup into which the tincture will be incorporated. The label lists phosphorus, but not ethanol, among its active ingredients. Also, in subsequent communications with our office, you have asserted that the phosphorus acts as an active ingredient in the cough syrup and that the ethanol functions solely as a solvent for the transportation of the phosphorus. Specifically, you state that the phosphorus induces productive coughing so as to ultimately relieve coughing symptoms.
We requested the views of the CBP laboratory assessing the roles and effects of the phosphorus and ethanol in the subject merchandise on the basis of your descriptions of the tincture production and post-importation dilution process. According to the laboratory’s memorandum, white phosphorus is a highly combustible substance “known to be significantly toxic to humans from both inhalation and ingestion routes,” and can cause a number of serious health effects, although at concentrations much higher than those at which it is present in the cough syrup. The laboratory further reported that white phosphorus is used as an ingredient in some rat poison formulations due to its toxicity, and that it can also be utilized for the production of explosive weaponry.
The CBP laboratory also reported that ethanol is a suitable solvent for white phosphorus, capable of dissolving the substance while preventing combustion. While other substances can dissolve white phosphorus to a greater degree, ethanol offers the distinct advantage of being both effective and “fit for human consumption,” in particular because white phosphorus is only minimally soluble in water. According to the report, the volume of water required for dissolution of even trace amounts of white phosphorus is so great as to render transport of the solution in all likelihood cost-prohibitive. Meanwhile, use of a more effective but non-potable solvent would require “substantial chemical processing” to render the mixture suitable for consumption, leaving ethanol as the most cost-effective option.
ISSUE:
Whether the tincture is classifiable in heading 2207, HTSUS, as ethyl alcohol, in heading 2804, HTSUS, as phosphorus, or in heading 3824, HTSUS, as a chemical preparation.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 mandates that the classification of goods 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 at issue cannot be classified solely on the basis of 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 applying the GRI, CBP relies on the Harmonized Commodity Description and Coding System Explanatory Notes (ENs). While not legally binding or dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are therefore highly indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The HTSUS provisions under consideration in this case are as follows:
2207: Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher; ethyl alcohol and other spirits, denatured, of any strength:
2207.10 Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher:
2207.10.60: For nonbeverage purposes
2804: Hydrogen, rare gases, and other metals:
2804.70.00 Phosphorus
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:
As a preliminary matter, we note that the subject merchandise cannot be classified in heading 3824, HTSUS, if it is prima facie classifiable in either heading 2804, HTSUS, or heading 2207, HTSUS. See Chapter 29, Note 1, HTSUS (“Except where the context otherwise requires, the headings of this chapter apply only to…separate chemically defined organic compounds.”); Chapter 38, Note 1, HTSUS (“This chapter does not cover…separate chemically defined elements or compounds.”); see also Cargill, Inc. v. United States, 318 F. Supp. 2d 1279, 1278-88 (Ct. Int’l. Trade 2004) (characterizing heading 3824 as a basket provision in which goods are classifiable only if they are not more specifically described elsewhere). Accordingly, we initially consider whether the subject merchandise is classifiable in heading 2207 or heading 2804.
Heading 2207 describes “Undenatured ethyl alcohol of 80% volume or higher; ethyl alcohol and other spirits, denatured, of any strength.” EN 22.07 states, in pertinent part, as follows:
Fermented beverages and spirituous beverages contain ethyl alcohol obtained by the fermentation of certain kinds of sugar by means of yeast or other ferments. Undenatured ethyl alcohol of headings 22.07 or 22.08 is produced when a fermented product is treated by subsequent purification processes (e.g., distillation, filtration, etc.) such that its characteristics as a fermented product are lost, producing a clear, colourless, non-sparkling liquid exhibiting only the smell and taste of ethyl alcohol. Ethyl alcohol may also be produced synthetically.
Ethyl alcohol and other spirits, denatured, are spirits mixed with substances to render them unfit for drinking but not to prevent their use for industrial purposes. The denaturants used vary in different countries according to national legislation. They include wood naptha, methanol, acetone, pyridine, aromatic hydrocarbons (benzene, etc.), colouring matter.
See also HQ H112716, dated July 1, 2011 (discussing common meanings of undenatured ethanol and denatured ethanol that are consistent with EN 22.07). As alluded to in EN 22.07, an exhaustive list of denaturants authorized for use in the manufacture of denatured alcohol is set forth in Chapter I, Part 21, Subpart G of the Alcohol, Tobacco Products and Firearms regulations. This list does not include phosphorus. 27 C.F.R. §21.151.
Even if an ethanol has been supplemented only with authorized denaturants or is left undenatured, it is nevertheless outside the scope of heading 2207 if any additions to the substance manifest a commercial purpose by enhancing the value of the product. This is the case even where these additives are present in trace amounts that may otherwise qualify for de minimis treatment. See Cargill, 318 F. Supp. 2d at 1290 (excluding mixture comprised primarily of fatty acids from heading 3823 because the de minimis amounts of non-fatty acid components imparted the mixture’s commercial significance). For example, in HQ H088423, dated September 2, 2010, we excluded from heading 2207 a solution comprised 94.26 percent of ethanol and 4.49 percent of various hygiene and lubricating agents from heading 2207, on the grounds that “the additives present in the instant mixture are not incidental; they are added to enhance the value of the product and to render it suitable for a specific use—i.e., to provide fragrance, to clean, disinfect and lubricate the shaver.” In HQ H955265, dated February 9, 1994, we classified a mixture containing 89 percent ethanol and 10 percent citric acid in heading 3823 where the citric acid component imparted a tangy taste to a wine base. See also NY N264180, dated June 26, 2015 (classifying a solution containing ammonia, ethanol, and sodium bicarbonate in heading 3822, HTSUS); and NY N242763, dated July 3, 2013 (classifying hand sanitizer consisting of ethanol and biphenyl-2-ol in heading 3824).
The instant product consists of an ethanol solution to which phosphorus has been added, resulting in a mixture comprised 99.9 percent of ethanol and 00.1 percent of phosphorus. It is not denatured ethanol within the meaning of heading 2207 because, although a constituent was added, this additive is not listed as an authorized denaturant under 27 C.F.R. §21.151. Moreover, in its present concentration, the phosphorus does not necessarily render the product unfit for consumption, insofar as the product is subsequently incorporated into an orally ingestible cough syrup. The product also cannot be described as undenatured ethanol because, as with the products in HQ H088423 and HQ H95526, its phosphorus content is not merely incidental. You assert, and the label of the homeopathic cough syrup of which this is an ingredient confirms, that the phosphorus is the only constituent of the mixture that serves as an active ingredient in the cough syrup under the HPUS. As such, it is deliberately added to the ethanol for the purpose of enhancing the product’s commercial value. Therefore, consistent with EN 22.07 and CBP precedent, the subject tincture is excluded from heading 2207, HTSUS.
We next consider heading 2804, HTSUS, which describes “Phosphorus.” Note 1 to Chapter 28 states, in relevant part, as follows:
Except where the context otherwise requires, the headings of this chapter apply only to:
Separate chemical elements and separate chemically defined compounds, whether or not containing impurities;
The products mentioned in (a) above dissolved in water;
The products mentioned in (a) above dissolved in other solvents provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use…
EN(A) to Chapter 28 expounds upon Chapter Note 1(c) in the following excerpt:
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).
Read together, Note 1(c) and the EN to Chapter 28 establish two conditions for classification within the chapter of a separate chemical element dissolved in a non-aqueous solvent. First, the solution must be a “normal and necessary method” of stabilizing or transporting the element. Second, the solvent cannot effectively narrow the end-use of the element to a specific purpose.
In your submissions, you assert that the ethanol functions solely to facilitate safe transport of the phosphorus. It is undisputed that white phosphorus, a tetrahedral phosphorus arrangement represented by the symbol P4, is a separate chemical element for purposes of Note 1 to Chapter 28. See EN 28.04, HTSUS; Richard J. Lewis, Sr., Hawley’s Condensed Chemical Dictionary 985 (15th ed. 2007) [hereinafter Hawley’s]. Consistent with your assertions, moreover, the report issued by the CBP laboratory states that ethanol is not only a suitable solvent for phosphorus, but is an ideal vessel for the transportation of phosphorus due to the low solubility of phosphorus in water and the high toxicity of more effective solvents such as benzene and carbon disulfide. In light of this, we find that the dissolution of phosphorus in ethanol is a “normal and necessary method” of transporting phosphorus.
However, the tincture can only be classified within Chapter 28 if the constituent phosphorus remains suitable for general use. General uses of white phosphorus are not discussed in heading 2804, the relevant section or chapter notes, or the relevant ENs. Our research indicates that white phosphorus is a highly toxic and combustible substance that, on account of these properties, can be used as an ingredient in a variety of diverse products ranging from pesticides to pyrotechnics, but that it is not suitable for ingestion. See Van Nostrand’s Encyclopedia of Chemistry 1278 (Glenn D. Considine, ed., John Wiley & Sons, Inc. 5th ed. 2005); see also Hawley’s, infra, at 985 (listing rodenticides and smoke screens among uses of white phosphorus and advising non-ingestion of the substance). The laboratory report similarly noted the comparatively high toxicity and combustibility of white phosphorus, its propensity to cause extreme sickness or death when ingested, and its uses in the manufacture of poison and weapons.
The laboratory further noted that dissolution of white phosphorus in ethanol to effect the 1:999 ratio found in the subject product serves to mitigate the combustibility and toxicity of the phosphorus. This is meant to facilitate the phosphorus’ ultimate incorporation into a cough syrup as an active ingredient. You assert that in this capacity, the phosphorus induces “productive” coughing aimed at clearing mucus and other liquid blockages. Not only is this a highly specific use of white phosphorus, but it is not even among the substance’s aforementioned general uses, which preclude ingestion due to the substance’s volatility. Therefore, we find that the ethanol in the subject product renders the phosphorus particularly suitable for a specific remedial use within the meaning of Note 1(c) to Chapter 28. Consequently, the subject product does not satisfy the conditions of Note 1(c) and, because it is not otherwise described by Note 1, is excluded from heading 2804, HTSUS.
Finally, we consider heading 3824, HTSUS, which describes, inter alia, “chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included.” Note 1 to Chapter 38 provides, in relevant part: “This Chapter…does not cover chemically defined elements or compounds…” Additionally, EN 38.24 states, in pertinent part, as follows:
(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS
With only three exceptions… 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…
.
Consistent with Chapter 38, Note 1 and EN 38.24, both CBP and the Court of International Trade have held that chemical mixtures are classified in heading 3824 where they are excluded from classification within Chapter 28 or in other headings on account of their chemical heterogeneity. See Cargill, 318 F. Supp. 2d at 1290-91; Rhodia, Inc. v. United States, 441 F. Supp. 2d 1368, 1372, 1379 (Ct. Int'l Trade 2006) (holding that mixture of rare earth carbonates is described as a mixture of heading 3824 rather than as compounds of rare earth metals of heading 2846, HTSUS); HQ H088423; HQ H051896, dated October 23, 2009 (classifying in heading 3824 a phosphoric acid mixed with other acids, copper carbonate, and anhydrous ammonia upon determining that it could not be classified as phosphoric acid in heading 2809, HTSUS). Accordingly, because the subject tincture is a chemical mixture that is not prima facie classifiable elsewhere in the HTSUS, it is properly classified in heading 3824.
HOLDING:
By operation of GRI 1, the subject mother tincture is classified in heading 3824, HTSUS, specifically in subheading 3824.90.9290, HTSUSA, which describes “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: Other.” The 2015 general, column one rate of duty is 5.0% ad valorem.
This merchandise may be subject to the requirements of the Toxic Substances Control Act (TSCA), which are administered by the U.S. Environmental Protection Agency. Information on the TSCA can be obtained by contacting the EPA at 1200 Pennsylvania Avenue, N.W., Mail Code 70480, Washington, D.C., by telephone at (202) 554-1404, or by visiting the agency’s website at www.epa.gov.
Additional requirements may be imposed on this product by the Alcohol and Tobacco Tax and Trade Bureau (TTB). You may contact the TTB by telephone at (202) 453-2000 or by email at [email protected]. Written requests may be addressed to the following address: Alcohol and Tobacco Tax and Trade Bureau, Regulations and Rulings Division Attn: Industrial Alcohol Program, 1310 G Street NW, Box 12, Washington, D.C. 20005.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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,
Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch