HQ H270926
CLA-2 OT:RR:CTF:TCM H270926 TSM
Port Director
Los Angeles International Airport
U.S. Customs and Border Protection
11099 South La Cienega Blvd.
Los Angeles, CA 90045
RE: Internal advice; the tariff classification of quail egg powder.
Dear Port Director:
This is in response to the request from Nutragenesis LLC (“Nutragenesis”), dated September 21, 2015, for a prospective ruling regarding the classification of quail egg powder under the Harmonized Tariff Schedule of the United States (“HTSUS”). After their submission, counsel for Nutragenesis, in a letter dated December 12, 2015, advised this office that the quail egg powder which is subject of this ruling request recently became the subject of an importation through the Port of Los Angeles International Airport. On June 28, 2016, this office notified the Port of Los Angeles International Airport that the prospective ruling request from Nutragenesis would be processed as an Internal Advice. Pursuant to Nutragenesis’ request, a teleconference regarding this matter was held with members of my staff on September 8, 2016.
FACTS:
The quail egg powder at issue is a powder consisting by weight of approximately 40% dried (dehydrated) quail egg and approximately 60% microcrystalline cellulose. The dried quail egg powder consists of both egg white and yolk. The quail egg powder is manufactured by Stragen Pharma SA, headquartered in Geneva, Switzerland, under the name IgECALM®. Nutragenesis plans to import this powder from the EU, further process it after importation, and sell it in the United States as AllerGuard Express™ to manufacturers of dietary supplements.
In this formulation, the quail egg represents the only “active ingredient”; the microcrystalline cellulose functions as an inert stabilizer, bulking agent, and anti-caking agent. Microcrystalline cellulose is refined wood pulp very commonly used as an anti-caking agent, emulsifier, bulking agent, and stabilizer. The role of the microcrystalline cellulose in the instant merchandise is to stabilize the powder, and serve as a bulking and anti-caking agent. According to Nutragenesis, without the microcrystalline cellulose, the dried quail egg would clump together and would not be fit for its ultimate commercial use. The microcrystalline cellulose allows the product to be a flowable powder. According to the manufacturer, the ratio of dried quail egg to microcrystalline cellulose was selected as the most suitable for producing a stable, flowable powder. According to Nutragenesis, the microcrystalline cellulose also aids the compressibility of the powder when it is made into a tablet post-importation. Nutragenesis states that a stable, flowable powder is crucial for the dried quail egg to be put to its intended use as an ingredient in a dietary supplement, or indeed any use.
In its imported form, the quail egg powder has not yet been further processed for use as a dietary supplement. Post-importation, the quail egg powder will be sold by Nutragenesis to customers who will further process it into dietary supplements. The dietary supplements may be in tablet form, or they may be in other oral delivery forms such as strips or gummies.
On November 25, 2015, the quail egg powder was entered on one entry through the Port of Los Angeles International Airport.
ISSUE:
Whether the quail egg powder is classified in heading 0408, HTSUS, as “Birds’ eggs, not in shell, and egg yolks, … dried…,” or in heading 2106, HTSUS, as “Food preparations not elsewhere specified or included.”
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.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
0408 Birds’ eggs, not in shell, and egg yolks, fresh, dried, cooked by steaming or by boiling in water, molded, frozen or otherwise preserved, whether or not containing added sugar or other sweetening matter
* * *
2106 Food preparations not elsewhere specified or included
* * *
The ENs to heading 04.08 state, in relevant part:
This heading covers whole eggs, not in the shell, and egg yolks of all birds. The products of this heading may be fresh, dried, cooked by steaming or by boiling in water, moulded (e.g., cylindrical “ long eggs ”), frozen or otherwise preserved. All these fall in the heading whether or not containing added sugar or other sweetening matter and whether for use as food or for industrial purposes (e.g., in tanning).
The heading does not cover :
(a) Oil of egg yolk (heading 15.06).
(b) Egg preparations containing seasoning, spices or other additives (heading 21.06).
(c) Lecithin (heading 29.23).
(d) Separate egg white (egg albumin) (heading 35.02).
* * *
The ENs to heading 21.06, provide, in pertinent part, the following:
Provided that they are not covered by any other heading of the Nomenclature, this heading covers:
(A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption.
(B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter 38).
* * *
In its submission, Nutragenesis argues that the quail egg powder is described eo nomine in heading 0408, HTSUS, and explains that the significant amount of microcrystalline cellulose is only necessary to make the product fit for its commercial end use. Nutragenesis further argues that the quail egg powder is therefore classified in heading 0408, HTSUS, as dried bird’s eggs. As such, Nutragenesis concludes that the quail egg powder cannot be classified in heading 2106, HTSUS, as a food preparation not elsewhere specified or included.
Heading 0408, HTSUS, provides for “Birds’ eggs, not in shell, and egg yolks, fresh, dried, cooked by steaming or by boiling in water, molded, frozen or otherwise preserved, whether or not containing added sugar or other sweetening matter.” As referenced above, the ENs to heading 04.08, provide in pertinent part that egg preparations containing seasoning, spices or other additives are provided for in heading 21.06 (emphasis added). In this regard, we note that the Federal Food and Drug Administration (“FDA”) defines food additives as follows:
In its broadest sense, a food additive is any substance added to food. Legally, the term refers to "any substance the intended use of which results or may reasonably be expected to result -- directly or indirectly -- in its becoming a component or otherwise affecting the characteristics of any food." This definition includes any substance used in the production, processing, treatment, packaging, transportation or storage of food.
As Nutragenesis explains, the microcrystalline cellulose is added to the dried quail egg to render it a flowable powder. Therefore the microcrystalline cellulose is a substance intended to affect the characteristics of the quail egg powder. Moreover, microcrystalline cellulose is specifically recognized by the FDA as a food additive.
The quail egg powder is described as an “egg preparation containing … other additives” within the meaning of the ENs to heading 04.08, and as such it is not described by heading 0408, HTSUS. See NY 866261, dated September 17, 1991 (classifying an egg preparation consisting of dried eggs and vegetable oils, in subheading 2106.90, HTSUS).
In its submission, Nutragenesis argued that the courts have established that if an article has been merely improved or amplified, and the essential character of the merchandise is preserved or only incidentally altered, the rule is that an eo nomine designation will include all forms of the article. In support of this argument Nutragenesis referenced Robert Bosch Corp. v. United States, 63 Cust. Ct. 96 (Cust. Ct. 2d Div. 1969) and Nestle Refrigerated Food Co. v. United States, 18 C.I.T. 661 (Ct. Int'l Trade 1994). In this regard, we note that whether the quail egg powder at issue has been merely improved or amplified by the addition of microcrystalline cellulose is not at issue. At issue is whether the egg preparation contains additives.
In its submission, Nutragenesis further argued that “the Explanatory Notes for Chapter 4 specifically note that the dairy products of that heading in the form of powder may contain anticaking agents. Similar to the dairy products of chapter 4, the instant dried quail egg product also requires anti-caking agents to be a usable commercial product.” However, this argument is not persuasive because quail eggs are not dairy products and we find nothing in the heading text, the legal notes or the EN 04.08 that permits the addition of stabilizing agents to non-dairy products of that heading.
Heading 2106, HTSUS, provides for “Food preparations not elsewhere specified or included.” Food preparations of heading 2106 are generally considered to be mixtures of food ingredients to be used in or with other foods. This is illustrated by the ENs to heading 21.06, which list several examples of goods composed of a mixture of ingredients. As referenced above, some of the mixtures are listed as follows:
(A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.) for human consumption.
(B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption…
The quail egg powder at issue, containing approximately 40% by weight dried (dehydrated) quail egg and approximately 60% by weight microcrystalline cellulose, is a food preparation. As such, it is a “preparation consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption,” within the meaning of the ENs to heading 21.06. See HQ 966213, dated March 18, 2004 (classifying natural Beta-Carotene in a soy oil suspension, to be used as an ingredient in vitamin dietary supplements, in subheading 2106.90.99, HTSUS).
In its submission, Nutragenesis argued that the imported merchandise is not a dietary supplement, and thus cannot be classified in heading 2106, HTSUS. Rather, it is an intermediate product that is further processed into various forms of dietary supplements. Nutragenesis argues that the fact that the quail egg powder must be further processed, weighs heavily against its classification in heading 2106, according to HQ H097660, dated September 2, 2010, and HQ 962719, dated May 2, 2000. In this regard, we note that heading 2106, HTSUS, does not require preparations described by this heading to be used directly for human consumption as dietary supplements. The EN 21.06 (A) explains that preparations for use after processing for human consumption are included in heading 2106, HTSUS. HQ H097660 and HQ 962719 concerned different types of products, also classified in heading 2106, HTSUS. We also note that the imported quail egg powder, not covered by heading 0408, HTSUS, is described by heading 2106, HTSUS, referenced above, in that it is (1) a preparation for use, after processing, for human consumption; and (2) consists of foodstuffs used in the making of food preparations for human consumption.
Finally, Nutragenesis argued that, as a mixture, under a GRI 3 analysis the dried dehydrated quail egg component of the quail egg powder at issue constitutes the essential character of the product, since the quail egg is the only active ingredient indispensable to the overall product. Nutragenesis cited BASF Corp. v. United States, 29 C.I.T. 681 (Ct. Int'l Trade 2005), in which the Court of International Trade found held that in a product containing 1% of beta-carotene as the only active ingredient, and 99% inert ingredients, the essential character was imparted by the beta-carotene. The BASF court classified the product in subheading 3204.19.35, HTSUS, which provides for “Synthetic organic coloring matter, whether or not chemically defined; preparations as specified in note 3 to this chapter based on synthetic organic coloring matter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined: Synthetic organic coloring matter and preparations based thereon as specified in note 3 to this chapter: Other, including mixtures of coloring matter of two or more of the subheadings 3204.11 to 3204.19: Other: Beta-carotene and other carotenoid coloring matter.”
During the teleconference, counsel for Nutragenesis stated that BASF Corp. v. United States controls the classification of the quail egg powder because: (1) at issue in both cases are mixtures, rather than preparations, (2) both contain inert stabilizers rather than additives, and (3) both are described eo nomine in headings other than heading 2106, HTSUS.
Upon review, we disagree. Initially, headings 2106 and 0408 were not at issue in BASF. Corp. v. United States. Secondly, quail egg powder is not a chemical mixture like the product before the court in BASF Corp. v. United States.
With regard to the first point, we note that in BASF Corp. v. United States, the Court of International Trade considered the following definitions of the terms “mixture” and “preparation”: (a) according to the General Rules of Interpretation, a “mixture” is a “composite [good] consisting of different materials or made up of different components”; (b) in United States v. Hanrahan, 45 C.C.P.A. 120, 122 (1958), a “preparation” is defined as: “where the imported merchandise is a distinct and recognized article of commerce, having an individual name, and which is produced from a raw material by a definite series of steps, such merchandise is a preparation”; (c) in Orlando Food Corp. v. United States, 140 F.3d 1437, 1441 (Fed. Cir. 1998), the court stated: “Inherent in the term ‘preparation’ is the notion that the object involved is destined for a specific use. The relevant definition from The Oxford English Dictionary defines ‘preparation’ as ‘a substance specially prepared, or made up for its appropriate use or application, e.g. as food or medicine, or in the arts or sciences.’ The Oxford English Dictionary 374 (2d. ed. 1989).” Based on the above, we believe that the quail egg powder can be described as a preparation at GRI 1, for which resort to GRI 3 is unnecessary.
We now turn to Nutragenesis’ second point, that inert stabilizers cannot be described as additives. In this regard, we note that the term “additive” is not defined in the HTSUS or its relevant chapter or section notes. It is also not defined in the pertinent Explanatory Notes. In such cases, CBP has adhered to the position that the term should be defined in accordance with its common meaning. It is presumed that the common meaning and commercial meaning of the term are the same. The common meaning of the term “additive” has been established with the use of dictionaries and other lexicographic authorities. Dictionary.com online defines “additive” as “a substance added directly to food during processing, as for preservation, coloring, or stabilization.” The Merriam-Webster Dictionary defines “additive” as “produced by addition.” The Webster’s 1913 Dictionary defines “additive” as “something added to enhance food or gasoline or paint or medicine.” Upon review, we conclude that the mixture of 60% microcrystalline cellulose and 40% dried quail egg, at issue in this case, meets the above dictionary definitions of “additive.” Moreover, as discussed above, the FDA defines “additive” as "any substance the intended use of which results or may reasonably be expected to result -- directly or indirectly -- in its becoming a component or otherwise affecting the characteristics of any food." Finally, microcrystalline cellulose is specifically listed by the FDA as a food additive.
Turning to Nutragenesis’ third and final point, we note that the BASF court did not consider the meaning and scope of heading 2106, HTSUS. In addition, the ENs 32.04 do not exclude preparations containing additives or stabilizers from classification in heading 3204, HTSUS. As a result, food colorants mixed with stabilizers or delivery agents are not precluded from being classified in heading 3204, HTSUS. In contrast, the ENs to heading 04.08, at issue in the present case, specifically exclude egg preparations containing seasoning, spices or other additives from heading 0408, HTSUS. It is a “preparation consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption,” within the meaning of the ENs to heading 21.06. For these reasons, we find that BASF Corp. v. United States does not control the classification of the quail egg powder in the instant case.
Based on the foregoing, we conclude that quail egg powder is excluded from heading 0408, HTSUS, and is classified in heading 2106, HTSUS.
HOLDING:
By application of GRI 1 and 6, the quail egg powder is classified in heading 2106, HTSUS, and specifically, in subheading 2106.90.9998, HTSUS, which provides for “Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other: Other: Other: Other: Other.” The 2016 general, column one rate of duty is 6.4 percent 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 on the internet at www.usitc.gov/tata/hts/.
You are to mail this decision to the Internal Advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel and the public on the CBP website located at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Ieva K. O’Rourke, Chief Tariff Classification and Marking Branch