CLA–2 OT:RR:CTF:TCM H261126 NCD
Shirley Schmidt
Trade and Product Compliance Manager
Pier 1 Imports (U.S.), Inc.
100 Pier 1 Place, Level 11
Fort Worth, Texas 76102
Re: Modification of NY N250161, dated March 10, 2014; revocation of NY N249908, dated March 3, 2014; liquid hand and face soaps
Dear Ms. Schmidt:
This is in response to your letter of December 15, 2014, on behalf of Pier 1 Imports (U.S.), Inc. (“Pier 1”), requesting reconsideration of New York Ruling Letter (NY) N250161, dated March 10, 2014, as it pertains to classification of a liquid hand soap component of a Holiday Duo Soap/Lotion Caddy Set (“Holiday Duo Set”) under the Harmonized Tariff Schedule of the United States (HTSUS). In NY N250161, CBP classified the liquid hand soap under sub-heading 3401.20.00, HTSUS, which provides for “Soap; organic surface-active products and preparations for use as soap, in the form of bars, cakes, molded pieces or shapes, whether or not containing soap; organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent: Soap in other forms.” We have reviewed that ruling and find it to be in error as to classification of the liquid hand soap, and we are consequently modifying the ruling. A sample of the Holiday Duo Soap/Lotion Caddy Set was forwarded to our office for inspection and will be returned to you.
Additionally, we are revoking NY N249908, issued to Bert Distributing, LLC, on March 3, 2014, in which CBP also classified a liquid hand and face soap under subheading 3401.20.00, HTSUS. We have determined that this classification was incorrect and, for the reasons set forth below, are revoking NY N249908.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice of the proposed action was published in the Customs Bulletin, Vol. 49, No. 26, on July 1, 2015. No comments were received in response to the notice.
FACTS:
In NY N250161, CBP found that the subject Holiday Duo Set “consists of a 16.5 fluid ounce liquid hand soap, a 7.9 fluid ounce hand lotion, and a chrome colored iron caddy, designed to hold the soap and lotion plastic containers.” CBP determined that the subject merchandise was not a set and classified the liquid hand soap, hand lotion, and iron caddy separately.
You do not dispute the classification of the hand lotion or iron caddy. Instead, you provide a list of ingredients of which the liquid hand soap is comprised, including water (92.2797%), sodium laureth sulfate (5.0000%), triethanolamine (0.70000%), benzophenone-4 (0.10000%), methylchloroisothiazolinone (.0009%), and methylisothiazolinone (0.0003%), among others. You also state that the soap does not contain any aromatic or modified aromatic surface-active agents. CBP Laboratory and Scientific Services (LSS), upon analyzing the listed ingredients, verified the accuracy or your statement. Additionally, we have received a sample of the Holiday Duo Set and, in inspecting the sample, have noted that the label on the liquid hand soap is entitled “hand wash with vitamin beads”, instructs the user to “[a]pply directly on hands”, and lists ingredients corresponding to those provided in your letter.
In NY N249908, CBP stated as follows with regard to the merchandise at issue:
[The] submission describes the product at issue as a hand and face cleanser, designed to remove oil and dirt from the pores of the skin. The provided [Material Safety Data Sheet (MSDS)] describes this product as a white liquid, containing surface-active agents and other substances.
We note that the MSDS provides a partial list of chemical ingredients that includes only coconut diethanolamide, of which the product is reportedly 1-10% comprised, and sodium lauryl trioxyethylene sulfate, of which the product is also reportedly 1-10% comprised. The CBP laboratory has confirmed, both in its report and in subsequent communications with our office, that both of these chemicals are organic surface-active agents but are not aromatic or modified aromatic surface-active agents.
ISSUE:
Whether the merchandise at issue is properly classified under subheading 3401.20.00, HTSUS, which provides for “Soap in other forms”, or under subheading 3401.30.50, HTSUS, which provides for “Organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap: Other”.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
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. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
As a preliminary matter, it is not disputed that the products at issue are classifiable under heading 3401 as soaps or organic surface-active products and preparations for use as soaps. Nor is it under dispute, with regard to the remaining Holiday Duo Set articles at issue in NY N250161, that CBP properly classified the hand lotion under subheading 3304.99.50, HTSUS, as a preparation for care of the skin, and properly classified the iron caddy under subheading 7324.90.00, HTSUS, as a sanitary ware.
With regard to the subject liquid hand soap, the 2015 HTSUS provisions under consideration are as follows:
3401 Soap; organic surface-active products and preparations for use as soap, in the form of bars, cakes, molded pieces or shapes, whether or not containing soap; organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent:
3401.20.00 Soap in other forms
3401.30 Organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap:
3401.30.10 Containing any aromatic or modified aromatic surface-active agent
3401.30.50 Other
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).
EN 34.01 provides, in pertinent part, as follows:
SOAP
Soap is an alkaline salt (inorganic or organic) formed from a fatty acid or a mixture of fatty acids containing at least eight carbon atoms. In practice, part of the fatty acids may be replaced by rosin acids.
The heading covers only soap soluble in water, that is to say true soap. Soaps form a class of anionic surface-active agents, with an alkaline reaction, which lather abundantly in aqueous solutions.
There are three categories of soap:
Hard soaps, which are usually made with sodium hydroxide or sodium carbonate and comprise the bulk of the ordinary soaps. They may be white, coloured or mottled.
Soft soaps, which are made with potassium hydroxide or potassium carbonate. They are viscous and generally green, brown or pale yellow in colour. They may contain small quantities (generally not exceeding 5 %) of synthetic organic surface-active products.
Liquid soaps, which are solutions of soap in water, in some cases with a small quantity (generally not exceeding 5 %) of alcohol or glycerol added, but not containing synthetic organic surface-active products.
…
(III) ORGANIC SURFACE-ACTIVE PRODUCTS AND PREPARATIONS FOR WASHING THE SKIN, IN THE FORM OF LIQUID OR CREAM AND PUT UP FOR RETAIL SALE, WHETHER OR NOT CONTAINING SOAP
This part includes preparations for washing the skin, in which the active component consists wholly or partly of synthetic organic-surface active agents (which may contain soap in any proportion), provided they are in the form of liquid or cream and put up for retail sale. Such preparations not put up for retail sale are classified in heading 34.02.
(emphasis added). Thus, the EN distinguishes between “true” liquid soaps and other liquid products that may contain soap but also contain synthetic organic-surface active agents. We note that in adding subheading 3401.30 to the Nomenclature, the Harmonized System Committee (HSC) expressed its understanding that subheading 3401.30 would capture organic surface-active hygiene preparations presented as liquid “soaps,” while leaving true liquid soaps classifiable in subheading 3401.20. (See RSC/17 Doc 41.790 E, January 7, 1998). In other words, the determination of whether a product is classifiable in subheading 3401.30, as opposed to subheading 3401.20, turns on whether the product contains at least one organic surface-active agent.
EN 34.01 does not define “organic surface-active agent.” However, an extensive definition of this term is provided by the EN to heading 3402, which, prior to the creation of 3401.30 in 2002, covered products now classifiable in that subheading. See HQ 959886, dated May 7, 1998 (classifying face wash containing organic surface-active agents in 3402.20.50); NY E84563, dated August 13, 1999 (classifying body wash in 3402.20.50); (HSC/20 Doc. 41.600 Annexes E/9 + IJ/12, dated November 7, 1997). EN 34.02 provides, in relevant part, as follows:
Organic surface-active agents are capable of adsorption at an interface; in this state they display a number of physico-chemical properties, particularly surface activity (e.g., reduction of surface tension, foaming, emulsifying, wetting), which is why they are usually known as “surfactants”…
Organic surface-active agents may be:
Anionic, in which case they ionise in aqueous solution to produce negatively charged organic ions responsible for the surface activity. Examples are: sulphates and sulphonates of fats, vegetable oils (triglycerides) or resin acids derived from fatty alcohols; petroleum sulphonates, e.g., of alkali metals (including those containing a proportion of mineral oil), of ammonium or of ethanolamines; alkylpolyestersulphates; alkylsulphonates or alkylphenylethersulphonates; alkylsulphates, alkylarlsulphonates (e.g., technical dodecylbenzenesulphonates).
…
(3) Non-ionic, in which case they do not produce ions in an aqueous solution. Their solubility in water is due to the presence in the molecules of functional groups which have a strong affinity for water. Examples are: products of the condensation of fatty alcohols, fatty acids or alkylphenols with ethylene oxide; ethoxylates of fatty acid amides.
The aforementioned CBP lab report describes sodium laureth sulfate and triethanolamine as surfactants. In addition, our own research confirms that sodium laureth sulfate, a type of sulphate, is an anionic surfactant, and that coconut diethanolamide is a nonionic surfactant. See Tony Hargreaves, Chemical Formulation: An Overview of Surfactant-Based Preparations Used in Everyday Life 64 (2003); Hiroshi Iwata & Kunio Shimada, Formulas, Ingredients and Production of Cosmetics 65 (2013).
Both products at issue are in liquid form and are clearly designed for washing of the skin. The liquid hand soap in the Holiday Duo Set is in a bottle whose label is entitled “hand wash” and explicitly directs the user to apply the soap to the hands. Similarly, in NY N249908, the product is described as a liquid hand and face cleanser designed to remove oil and dirt from the pores of the skin.
In addition, both your submitted list of ingredients and the label of the sample bottle include sodium laureth sulfate and triethanolamine as chemical constituents of the liquid hand soap in NY N250161. In fact, according to these materials, sodium laureth sulfate is a main ingredient in the liquid hand soap component of the Holiday Duo Set, insofar as its content by volume is higher than that of any other ingredient barring water. Likewise, the MSDS for the liquid hand and face soap in NY N249908 lists sodium lauryl trioxyethylene sulfate and coconut diethanolamide as relatively prominent ingredients in the soap.
Consequently, as liquid skin cleansers containing organic surface-active agents, both products are described by subheading 3401.30. By extension, they fall outside the scope of subheading 3401.20, which, as discussed above, is reserved for soaps lacking such agents.
Having determined the products’ proper classification at the 6-digit subheading level, we now consider whether they are properly classified under subheading 3401.30.10, which applies to products containing aromatic or modified aromatic surface-active agents, or subheading 3401.30.50, which covers products lacking such agents. Additional U.S. Note 2 to Section VI provides as follows:
For the purposes of the tariff schedule:
The term "aromatic" as applied to any chemical compound refers to such compound containing one or more fused or unfused benzene rings;
The term "modified aromatic" describes a molecular structure having at least one six-membered heterocyclic ring which contains at least four carbon atoms and having an arrangement of molecular bonds as in the benzene ring or in the quinone ring, but does not include any such molecular structure in which one or more pyrimidine rings are the only modified aromatic rings present…
You assert that the subject merchandise contains no aromatic or modified aromatic surface-active agents. Based upon the aforementioned analysis of the subject merchandise by LSS, we agree with your assertion.
Accordingly, as liquids skin cleansers that contain organic surface-active agents but do not contain aromatic or modified aromatic surface-active agents, both products are properly classified in subheading 3401.30.50, HTSUS.
HOLDING:
By application of GRIs 1 and 6, the instant liquid hand and face soaps are classified under heading 3401, HTSUS, specifically subheading 3401.30.50, HTSUS, which provides for “Organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap: Other”. The column one, general rate of duty is free.
Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
In accordance with the above analysis, NY N250161, dated March 10, 2014, is hereby MODIFIED, and NY N249908, dated March 3, 2014, is hereby REVOKED.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division
CC: Bob Butler
Bert Distributing, LLC
6315 Tamarack Trail
Cumming, GA 30040