• HQ H261418
• May 29, 2018

• Type : Classification • HTSUS : 3808.92.50
•  Modifies:   I82455     Related:   I82455; K89236; N231486; N058539; N255188; N239545; N052863; N027975   

OT:RR:CTF:CPMM H261418 APP

Ms. Kathy Lin
ProFood International, Inc.
P.O. Box 4378
Lisle, IL 60532-9378

RE: Modification of NY I82455; Tariff classification of natamycin 50% with lactose and natamycin 50% with sodium chloride

Dear Ms. Lin:

This is to inform you that U.S. Customs and Border Protection (“CBP”) has reconsidered New York Ruling Letter (“NY”) I82455, dated June 3, 2002, regarding the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of natamycin 50% with lactose and natamycin 50% with sodium chloride. In NY I82455, CBP classified the natamycin 50% with lactose and natamycin 50% with sodium chloride mixtures under heading 3003, HTSUS, specifically under subheading 3003.20.00, HTSUS, which provided for “Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packings for retail sale: Containing other antibiotics.” We have determined that this ruling is in error and for the reasons set forth below we hereby modify it with respect to the natamycin 50% with lactose and natamycin 50% with sodium chloride mixtures.

Pursuant to section 625(c)(l), Tariff Act of 1930 (19 U.S.C. § 1625(c)(l)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), a notice was published in the Customs Bulletin, Vol. 52, No. 16, on April 18, 2018, proposing to modify NY I82455 and to revoke any treatment accorded to substantially identical transactions. No comments were received in response to this notice. FACTS:

The preparations at issue are antifungal mixtures composed of (by weight) 50% natamycin with 50% lactose (anhydrous) and 50% natamycin with 50% sodium chloride, respectively. These mixtures are prepared from pure natamycin by mixing it with lactose or sodium chloride. The products are imported in bulk form from China to serve as antimyotic food additives to protect food, especially cheese, from mold and yeast growth.

ISSUE:

Whether the natamycin 50% with lactose and natamycin 50% with sodium chloride are classified in heading 3003, HTSUS, as medicament consisting of two or more constituents mixed together for therapeutic or prophylactic uses, or in heading 3808, HTSUS, as fungicides.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). 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 GRIs 2 through 6 may then be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level.

The HTSUS provisions under consideration in this case are as follows:

3003 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packings for retail sale:

3003.20.00 Other, containing antibiotics

3808 Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulfur-treated bands, wicks and candles, and flypapers): Other: 3808.92 Fungicides: Other: Other: 3808.92.50 Other Note 3(b)(1) to chapter 30, HTSUS, states that mixed products for purposes of this chapter include colloidal solutions and suspensions (other than colloidal sulfur).

Note 1(b) to chapter 38, HTSUS, states that this chapter does not cover, “Mixtures of chemicals with foodstuffs or other substances with nutritive value, of a kind used in the preparation of human foodstuffs (generally, heading 2106).”

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 30.03 states, in relevant part, that:

This heading covers medicinal preparations for use in the internal or external treatment or prevention of human or animal ailments. These preparations are obtained by mixing together two or more substances. However, if put up in measured doses or in forms or packings for retail sale, they fall in heading 30.04.

The heading includes:

Mixed medicinal preparations such as those listed in an official pharmacopoeia, proprietary medicines, etc., including those in the form of gargles, eye drops, ointments, liniments, injections, counter-irritant and other preparations not falling in heading 30.02, 30.05 or 30.06.

However, this should not be taken to mean that preparations listed in an official pharmacopoeia, proprietary medicines, etc. are always classified in heading 30.03. For example, anti-acne preparations which are designed primarily to cleanse the skin and which do not contain sufficiently high levels of active ingredients to be regarded as having a primary therapeutic or prophylactic effect against acne are to be classified in heading 33.04.

Preparations containing a single pharmaceutical substance together with an excipient, sweetening agent, agglomerating agent, support, etc….

General EN 38.08 provides, in relevant part, that:

For the purposes of Note 1(b) to the Chapter, the expression “foodstuffs or other substances with nutritive value” principally includes edible products of Sections I to IV.

The expression “foodstuffs or other substances with nutritive value” also includes certain other products, for example, products of Chapter 28 used as mineral supplements in food preparations … sugars of heading 29.40 … It should be noted that this list of products is simply illustrative and should not be taken to be exhaustive.

The mere presence of “foodstuffs or other substances with nutritive value” in a mixture would not suffice to exclude the mixture from Chapter 38, by application of Note 1(b). Substances having a nutritive value that is merely incidental to their function as chemical products, e.g., as food additives or processing aids, are not regarded as “foodstuffs or substances with nutritive value” for the purpose of this Note. The mixtures which are excluded from Chapter 38 by virtue of Note 1(b) are those which are of a kind used in the preparation of human foodstuffs and which are valued for their nutritional qualities.

EN 38.08 states, in relevant part, that:

This heading covers a range of products (other than those having the character of medicaments, including veterinary medicaments – heading 30.03 or 30.04) intended to destroy pathogenic germs, insects (mosquitoes, moths, Colorado beetles, cockroaches, etc.), mosses and moulds, weeds, rodents, wild birds, etc. Products intended to repel pests or used for disinfecting seeds are also classified here.   These … fungicides, etc., are applied by spraying, dusting, sprinkling, coating, impregnating, etc., or may necessitate combustion. They achieve their results by nervepoisoning, by stomachpoisoning, by asphyxiation or by odour, etc …

The products of heading 38.08 can be divided into the following groups: …

(II)   Fungicides           Fungicides are products which protect against the growth of fungi (e.g., preparations based on copper compounds) or which are designed to eradicate the fungi already present (e.g., preparations based on formaldehyde).

        Fungicides can be characterised by their mode of action or method of use … This heading excludes: … (c)   Disinfectants, insecticides, etc., having the essential character of medicaments, including veterinary medicaments (heading 30.03 or 30.04).

First, we note that heading 3003, HTSUS is a use provision and covers medicaments consisting of two or more constituents mixed together for therapeutic or prophylactic uses that are not put up in measured doses or in forms, or packings for retail sale. Even though the instant mixtures are imported in bulk form, they are not used as medicaments for the treatment or prevention of a disease or ailment. Instead, they are used as antimycotic agents in the food industry. Therefore, they are precluded from classification as medicaments of chapter 30, HTSUS.

We further note that the mere presence of foodstuffs or other substances with nutritive value would not exclude the subject mixtures from chapter 38, HTSUS. See EN 38.08. Substances having a nutritive value that is merely incidental to their function as chemical products are not excluded from chapter 38, HTSUS by virtue of Note 1(b) to this chapter. See id. The instant mixtures contain 50% natamycin, which is an antifungal substance, mixed with lactose or sodium chloride, and are formulated for use as food additives to prevent growth of mold and yeast particularly in cheese and cured meats. Heading 3808, HTSUS covers a range of products intended to destroy pathogenic germs and molds.

CBP has consistently classified antifungal mixtures in heading 3808, HTSUS. In NY K89236, dated September 13, 2004, CBP classified a formulated microbicide containing nisin used in food processing as a preservative in products such as processed cheese, cooked meat and poultry, and canned fruits and vegetables, in heading 3808, HTSUS, under subheading 3808.90.95, HTSUS (2004) (now subheading 3808.92.50, HTSUS). In NY N231486, dated September 17, 2012, CBP classified preparations containing two different strains of yeasts, aureobasidium pullulans strain DSM 14940, and aureobasidium pullulans strain DSM 14941, intended for the control of bacterial and fungal diseases in pome fruit, in subheading 3808.92.50, HTSUS. In NY N058539, dated May 8, 2009, CBP classified a formulation comprised of kasugamycin hydrochloride hydrate with application adjuvants, intended to control bacterial and fungal diseases on pepper and tomato, in subheading 3808.92.50, HTSUS.

In NY N255188, dated August 1, 2014, CBP classified a fungicide preparation containing QST 713 strain of Bacillus subtilis, used for the control or suppression of plant diseases, in subheading 3808.92.50, HTSUS. In NY N239545, dated April 1, 2013, CBP classified a mixture of 5-chloro-2-methyl-4-isothiazolin-3-one, 5-chloro-2-methyl-4-isothiazolin-3-one, magnesium chloride, magnesium nitrate, acetic acid and water, and a mixture of benzyl alcohol, dehydroacetic acid, benzoic acid and water, used as preservatives and antimicrobial agents in personal care products, in subheading 3808.92.50, HTSUS. In NY N052863, dated March 10, 2009, CBP classified a broad spectrum fungicide, used to control fungus that attacks turf grass, in subheading 3808.92.50, HTSUS. In NY N027975, dated May 27, 2008, CBP classified a formulated citrus fungicide, creating a protection against various plant diseases, in subheading 3808.92.50, HTSUS.

Similarly, the instant natamycin 50% with lactose and natamycin 50% with sodium chloride mixtures are antifungal mixtures, not aromatic in structure, which are designed for antimycotic use and in their imported condition are not used for therapeutic or prophylactic treatment but rather as food preservatives. As such, the instant natamycin mixtures are classified in heading 3808, HTSUS, specifically under subheading 3808.92.50, HTSUS.

HOLDING: By application of GRIs 1 and 6, the subject natacymin 50% with lactose and natamycin 50% with sodium chloride mixtures are classified under heading 3808, HTSUS, specifically under subheading 3808.92.50, HTSUS, as “Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulfur-treated bands, wicks and candles, and flypapers): Other: Fungicides: Other: Other: Other.” The 2018 column one, duty rate is 5% ad valorem.

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 at https://hts.usitc.gov/current.

EFFECT ON OTHER RULINGS:

NY I82455, dated June 3, 2002, is hereby MODIFIED with respect to the natamycin 50% with lactose and natamycin 50% with sodium chloride.

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