OT:RR:CTF:FTM H294536 JER
Port Director U.S. Customs and Border Protection 6431 Alum Creek Drive, Suite A
Groveport, OH 43125
RE: Application for Further Review of Protest No. 4103-17-100120; Tariff Classification of Gum Acacia
Dear Port Director:
This is in reference to the Application for Further Review (“AFR”) of Protest No. 4103-17-100120, timely filed on behalf of Farbest-Tallman Foods Corporation (“Protestant”), concerning the classification of a powdered gum acacia under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
On March 13, 2017, Protestant entered the subject merchandise under heading 1301, HTSUS, specifically, subheading 1301.20.00, HTSUS, as Gum Arabic. The entry covered the following products: (1) spray-dried gum acacia (396A); (2) instant soluble gum acacia (396I); (3) spray-dried gum acacia 399A organic; and, (4) instant soluble gum acacia 399I organic. On March 24, 2017, U.S. Customs and Border Protection (“CBP”) issued a CBP Form 28 (Request for Information) seeking information concerning the importation of spray-dried gum acacia 396A. On April 3, 2017, Protestant responded to this request by providing a flow chart and a detailed explanation of how the product was manufactured into powder. After the review of the information submitted, CBP liquidated the entry on June 9, 2017, under heading 1302, HTSUS. The importer filed a protest on November 28, 2017, requesting reclassification of the subject merchandise under subheading 1301.20.00, HTSUS, which provides for: “Lac; natural gums, resins, gum-resins and oleoresins (for example, balsams): Gum Arabic.”
Protestant describes the merchandise as spray-dried gum acacia, also known as gum Arabic. The subject gum acacia is described as being a “true gum” which is water soluble or naturally hydrophobic that requires heat treatment to improve solubility. The raw crude gum acacia is harvested in West Africa and is referred to as the species Acacia Seyal and Acacia Senegal. It is then exported to France where it undergoes a purification process and a spray-drying process before being imported into the United States. The production process involves crushing the raw nodules and introducing the crushed acacia into warm water where it is then solubilized. The gum acacia is then sifted through a sieve and centrifuge to remove sand and bark pieces. Bleach is then introduced to reduce microbial loads and eliminate pathogens. Subsequently, the solution is heated for 40-50 seconds at 80 to 90 degrees Celsius to reduce microbial loads and eliminate pathogens. Finally, the solution is spray-dried into a powder for before it is packaged for shipment.
CBP Laboratories and Scientific Services reviewed six samples of the gum acacia subject to this protest. CBP Laboratory Report NY20182027, dated March 21, 2019, states the following: the products are not consistent with agar-agar and other mucilages and thickeners as described in the Explanatory Notes to heading 1302, HTSUS; all of the products are consistent with their labeling as acacia gum; the heating is not sufficient to chemically alter the chemical characteristics of the product.
ISSUE:
Whether the gum acacia, subjected to certain heat treatment processes, is classified under the eo nomine provision of heading 1301, HTSUS, or under heading 1302, HTSUS, as a sap, extract or thickener.
LAW AND ANALYSIS:
Initially, we note that this matter 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 (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. 4103-17-100120 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts.
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.
The 2017 HTSUS provisions under consideration are as follows:
1301 Lac; natural gums, resins, gum-resins and oleoresins (for example, balsams):
1301.20.00 Gum Arabic…
1301.90 Other
* * * * * * * * * * * *
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:
* * * * * * * * * * * *
1302.39.00 Other…
* * * * * * * * * * * *
Note 1(h) to Chapter 13, HTSUS, states, in pertinent part, the following:
Heading 1302 applies, inter alia, to licorice extract and extract of pyrethrum, extract of hops, extract of aloes and opium.
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 EN for heading 1301, HTSUS, states, in pertinent part:
(II) Natural gums, resins, gum-resins and oleoresins.
Natural gums, resins, gum-resins and oleoresins are vegetable secretions, which may solidify on contact with air. These terms are often used indiscriminately. These products have the following distinguishing features:
(D) Oleoresins are exudates consisting mainly of volatile and resinous constituents. Balsams are oleoresins characterized by a high content of benzoic or cinnamic compounds.
The principal products are:
Gum Arabic (from various acacias) (sometimes also called Nile gum, Aden gum, Senegal; gum); gum tragacanth (obtained from varieties of Astragalus); Basra gum; Anacardium (gum of the cashew nut tree); Indian gum; certain so-called “indigenous” gums from various species of Rosaceae, such as cherry, plum , apricot, peach or almond trees.
* * * * * * * * *
The natural gums, resins, gum-resins and oleoresins covered by this heading may be crude, washed, purified, bleached, crushed or powdered. They are, however, excluded from this heading when they have been subjected to processes such as treatment with water under pressure, treatment with mineral acids or heat-treatment; for example : gums and gum-resins rendered water-soluble by treatment with water under pressure (heading 13.02), gums rendered soluble by treatment with sulphuric acid (heading 35.06), and resins which have been heat-treated to make them soluble in drying oils (heading 38.06).
The EN for heading 1302, HTSUS, states, in pertinent part:
(A) 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).
* * * * * * * * *
Saps are usually thickened or solidified. Extracts may be in liquid, paste or solid form…[.]
* * * * * * * * *
The heading further excludes the following vegetable products, classified under more specific headings of the Nomenclature:
Natural gums, resins, gum-resins and oleoresins (heading 13.01).
Malt extract (heading 19.01).
* * * * * * * * *
Protestant contends that the subject powdered gum acacia product is not a product of heading 1302, HTSUS, but rather is classifiable under heading 1301, HTSUS. Specifically, Protestant asserts that no court decision or CBP ruling has addressed the issue of whether a controlled purification step involving the limited application of heat is sufficient to exclude gum Arabic from tariff classification under heading 1301, HTSUS. Protestant asserts that subject gum acacia is not exposed to excessive heat; adding that excessive heat would degrade the solubility of the gum acacia. Lastly, Protestant points out that subheading 1301.20.00, HTSUS, is an eo nomine provision for “Gum Arabic” and contends that the subject merchandise falls within the scope of that eo nomine provision.
The question before us is whether the subject gum acacia is so significantly altered, such that it can no longer be classifiable under the eo nomine provision for Gum Arabic (subheading 1301.20, HTSUS). Specifically, whether the manufacturing process, which includes the application of heat to the raw gum acacia, transforms the gum acacia into a new product which is better described by the terms of heading 1302, HTSUS. In this regard, EN 13.01 states, in relevant part, that “[t]he natural gums…covered by this heading may be crude, washed, purified, bleached, crushed or powdered. They are however, excluded from this heading when they have been subjected to processes such as…treatment with mineral acid or heat treatment…” EN 13.01 further explains that such excluded products are to be classified under heading 1302, HTSUS. By contrast, the Explanatory Notes to heading 1302, HTSUS, explain that natural gums, resins, gum-resins and oleoresins of heading 1301, HTSUS, are excluded from heading 1302, HTSUS.
CBP has previously considered the classification of gum acacia (or Gum Arabic), with special consideration given to its manufacturing process. For instance, in New York Ruling Letter (“NY”) N249398, dated May 2014, the uncertainty surrounding the manufacturing process of raw acacia gum from Senegal hindered CBP’s ability to classify the merchandise. In NY N249398, CBP would not rule on whether the raw acacia gum was classifiable under heading 1301, HTSUS, without additional information clarifying the agglomeration and heat treatment of the product. By contrast, in NY N287098, dated July 7, 2017, CBP classified a Gum Arabic blend of 95% raw gum acacia and 5% stevia leaf under subheading 1301.20, HTSUS. The manufacturing process of the Gum Arabic blend in NY N287098, included the product being grounded, purified using water dissolution and finally spray-dried into a powdered form. The manufacturing process in NY N287098 did not remove the blend from the eo nomine provision in subheading 1301.20, HTSUS.
In the instant case, absent the transformation of its identity or change in its chemical properties, a crushed or powdered version of Gum Arabic does not remove the subject gum acacia from heading 1301, HTSUS. Under our facts, the raw acacia gum, extracted from acacia trees in West Africa, is exported to France for processing. The raw acacia gum, which initially presents as hard nodules, are kibbled (crushed) into smaller fragments. These fragments are dissolved into water, bleached and undergo dissolution and purification steps to remove impurities. One such step involves subjecting the gum acacia to heat treatment to remove microbial loads and eliminate pathogens so that the acacia gum is suitable for human consumption. The raw acacia gum solution is then spray-dried and flash evaporated into powder.
While the subject gum acacia undergoes an extensive purification process and is spray-dried into a powdery form, the heat treatment to remove microbiological bacteria is not sufficiently transformative to convert the gum acacia into an extract or sap of heading 1302, HTSUS. Instead, the heat treatment is necessary only to render it suitable for human consumption (i.e., to make it a food-grade product). Moreover, EN 13.02 explains that gums which have been purified, bleached, crushed or powdered are covered by heading 1301, HTSUS. As such, much like the Gum Arabic product of NY N287098, the subject gum acacia retains its identity as Gum Arabic.
Lastly, according to the CBP Laboratory Report, the CBP analysis found no evidence to suggest that any chemical modification of the acacia gum occurred as a result of the heat treatment process. In fact, the CBP Laboratory Report states that the heat treatment is not sufficient to chemically alter the chemical characteristics of the product. Accordingly, we find that the subject gum acacia does not become a product of heading 1302, HTSUS, as a result of undergoing the heat treatment or as a result of being spray-dried into a powdery form. Instead, the subject product remains gum acacia as described by the terms of subheading 1301.20, HTSUS.
HOLDING:
By application of GRI 1, HTSUS, the powdered gum acacia is classifiable in heading 1301, HTSUS. The merchandise is specifically classified in subheading 1301.20.00, HTSUS, which provides for: “Lac; natural gums, resins, gum-resins and oleoresins (for example, balsams): Gum Arabic.” The 2017 column one, general rate of duty at the time of entry was free.
You are instructed to GRANT the Protest.
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 CBP Form 19, to the protestant no later than 60 days from the date of this letter.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division