OT:RR:CTF:FTM H295133 TSM
Port Director
Port of Newark
1210 Corbin Street
Elizabeth, NJ 07201
Attn: Michelle Akalski, Import Specialist
Re: Application for Further Review of Protest No. 4601-17-103516; Tariff Classification of seaweed from China.
Dear Port Director:
The following is our decision with respect to the Application for Further Review of Protest No. 4601-17-103516, timely filed by Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP on November 28, 2017, on behalf of IKKO International Trading LLC (hereinafter “IKKO International” or “Protestant”), regarding the tariff classification of seaweed under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The seaweed at issue is described by the Protestant as follows: “The sea laver (seaweed/nori) is produced by drying edible, raw seaweed. The moisture content in the seaweed is reduced in a drying machine. In the drying machine, the seaweed is brought to a surface temperature of 50-60 degrees Celsius by means of low-temperature infrared rays.” Moreover, IKKO International states that the seaweed at issue undergoes the following manufacturing processes: (1) inspection of raw materials; (2) supplying qualified raw materials [into machinery]; (3) sorting out defective raw materials; (4) automatic sorting for metal objects; (5) drying; (6) counting number of sheets; (7) automatic collection; (8) sorting out defective materials by factory worker; (9) cutting sheets to size; (10) stuffing sheets into inner package; (11) sealing inner package; (12) automatic sorting packs for metal objects; (13) stuffing package into cardboard carton; (14) storage for preservation; and, (15) loading and shipping. This is supported by a flowchart from the manufacturer, dated April 4, 2017, describing the production process employed. Furthermore, on January 10, 2019, Protestant provided a letter from the producer of the nori, which clarified that in order to reduce the moisture content to about 5%, the seaweed sheets are initially placed on “shade mats” for air drying. In addition, the manufacturer states that the seaweed is dried in an infrared ceramic drying machine to reduce the moisture content of the seaweed, but not below the level of above 5% to be suitable for use in restaurants.
The subject merchandise covers nine different entries, entered between July 6, 2016 and June 13, 2017, under subheading 1212.21.00, HTSUS, which provides for “Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human consumption, not elsewhere specified or included: Seaweeds and other algae: Fit for human consumption.” The subject entries were liquidated between August 4, 2017 and September 8, 2017, under subheading 2008.99.90, HTSUS, which provides for “Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: Other, including mixtures other than those of subheading 2008.19: Other: Other: Other.”
In its Protest, dated November 28, 2017, IKKO International argued that the subject merchandise was classified under subheading 1212.21.00, HTSUS, as entered.
Protestant argued, in relevant part, as follows:
CBP’s rate advances of the subject seaweed were inconsistent with a previous decision concerning the same merchandise. In 2010, U.S. Customs and Border Protection (“CBP”) raised the same issue in a CF-29, with regard to the identical merchandise (a copy of the CF-29 is attached as Exhibit B). Upon review of the submission in response to that CF-29, containing materially the same information as the subject Protest, CBP concluded that seaweed materially identical to the seaweed at issue in this Protest is classified under subheading 1212.20.00, HTSUS.
The Nori items covered by the subject entries were essentially produced by drying edible, raw seaweed, using the manufacturing processes as described above. Included as Exhibit F is a letter from the manufacturer, providing further details regarding the seaweed drying process. Specifically, the letter states that the seaweed at issue is brought to a surface temperature of approximately 50-60 degrees Celsius, by means of low-temperature infrared rays in the drying machine. This letter was further amended to state that the seaweed was first air dried and then further dried in an infrared ceramic drying machine.
CBP has drawn a distinction between “dried” seaweed and “roasted” seaweed. In New York Ruling Letter (“NY”) 810717, dated June 5, 1995, CBP considered two seaweed products. One product was processed in an electric drying machine which removed moisture from the seaweed at a temperature of 70 degrees Celsius. The second product involved dried seaweed that was “roasted” at 80 degrees Celsius. The “dried” seaweed was classified under subheading 1212.20.00, HTSUS, and the “roasted” seaweed was classified under subheading 2008.99.90, HTSUS.
CBP’s prior rulings have applied the term “dried” to cooking processes below 80 degrees Celsius and “roasting” to cooking processes over 80 degrees Celsius, in NY N275150 (garlic), NY N050326 (corn), NY N016488 (macadamia nuts), NY G83395 (duck), NY F83482 (hemp seeds). In NY 810717, seaweed dried at 70 degrees Celsius was classified in Chapter 12, HTSUS, while dried roasted seaweed (first dried in a drying machine at 70 degrees Celsius and subsequently roasted in a toasting machine at 80 degrees Celsius) was classified in Chapter 20, HTSUS.
CBP has not previously considered heating to 50-60 degrees Celsius to be roasting. Therefore, the subject merchandise should not be considered “roasted.” It is more similar to the dried product at issue in NY 810717, and should therefore also be classified under subheading 1212.21.00, HTSUS, especially since it was dried at an even lower temperature.
Note 5 to Chapter 12 and Explanatory Notes to heading 1212, HTSUS, also support classification of the seaweed at issue in heading 1212, HTSUS.
The Customs Courts have held that “Nori” with no added ingredients is dried seaweed that is classified as edible seaweed and not as a food preparation. See United States v. Furuya & Co., 1910 U.S. App. LEXIS 5266, 176 F. 480; United States v. Furuya & Co., 7 Ct. Cust. 495, 1917 Ct. Cust. LEXIS 33, T.D. 37109.
The record also contains IKKO International’s response to CBP’s Request for Information (CBP form 28), issued with regard to one of the entries at issue in this Protest. In the response, IKKO International stated that the seaweed at issue was laboratory tested, and that the tested samples showed 6.12%, 5.99%, 5.17% and 5.14% moisture levels prior to undergoing processing in an infrared ceramic drying machine, and 2.68%, 2.63%, 2.42% and 2.33% following such processing. Exhibit D to the response contains copies of the laboratory tests confirming these moisture levels. In addition, the record contains copies of Health Certificates, submitted by IKKO International as part of the entry documentation, referring to the merchandise at issue as “roasted seaweed.”
ISSUE:
Whether the seaweed at issue is classified under heading 1212, HTSUS, as “Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human consumption, not elsewhere specified or included,” or under heading 2008, HTSUS, which provides for “Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included.”
LAW AND ANALYSIS:
Initially, we note that the 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 entries. (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. 4601-2017-102814 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24 (a) because Protestant alleges that the decision against which the Protest was filed is inconsistent with NY 810717, dated June 5, 1995, NY N275150, dated December 12, 2016, NY N050326, dated February 6, 2009, NY N016488, dated September 11, 2007, NY G83395, dated October 20, 2000 and NY F83482, dated March 1, 2000.
Classification under the HTSUS is determined 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 2016-2017 HTSUS provisions under consideration are as follows:
1212 Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human consumption, not elsewhere specified or included
* * *
2008 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included
* * *
Note 5 to Chapter 12, HTSUS, provides as follows:
For the purposes of heading 1212, the term "seaweeds and other algae" does not include:
Dead single-cell microorganisms of heading 2102;
(b) Cultures of microorganisms of heading 3002; or
(c) Fertilizers of heading 3101 or 3105.
* * *
In addition, in interpreting the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff 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).
* * *
Explanatory Note 5 to Chapter 12 provides as follows:
For the purposes of heading 12.12, the term “seaweeds and other algae” does not include:
(a) Dead single cell micro organisms of heading 21.02;
(b) Cultures of micro organisms of heading 30.02; or
(c) Fertilisers of heading 31.01 or 31.05.
* * *
Explanatory Note to heading 12.12 provides in relevant part as follows:
(A) Seaweeds and other algae.
This heading covers all seaweeds and other algae, whether or not edible. They may be fresh, chilled, frozen, dried or ground. Seaweeds and other algae are used for various purposes (e.g., pharmaceutical products, cosmetics, human consumption, animal feeding, fertilisers).
The heading also covers seaweed meal and meal of other algae, whether or not consisting of a mixture of many different varieties of seaweeds and other algae.
The heading excludes:
(a) Agar agar and carrageenan (heading 13.02).
(b) Dead single cell algae (heading 21.02).
(c) Cultures of micro organisms of heading 30.02.
(d) Fertilisers of heading 31.01 or 31.05.
Thus, the seaweed of heading 1212, HTSUS, is limited to seaweed primarily in its natural, that is, non prepared state, except for drying or reduction in size. In the Protest, IKKO International argues that CBP’s prior rulings have applied the term “dried” to cooking processes below 80 degrees Celsius and “roasting” to cooking processes over 80 degrees Celsius. Specifically, IKKO International referenced NY 810717, dated June 5, 1995, in which we found that seaweed processed in an electric drying machine at a temperature of 70 degrees Celsius was dried seaweed, while seaweed toasted at 80 degrees Celsius subsequent to being dried at 70 degrees Celsius, was roasted seaweed. In this regard, we note that while processing temperature is one factor to be considered, of importance is also moisture content of the processed seaweed. For example, in NY N194304, dated December 15, 2011, seaweed sheets with approximately 25 to 30 content water were dried at 50 degrees Celsius for 60 seconds in Far Infrared Heaters in which 10 to 15 percent of the water was removed. This seaweed, which retained approximately 10-20 percent moisture content, was classified as dried seaweed under heading 1212, HTSUS. In Headquarters Ruling Letter (“HQ”) 952635, dated October 5, 1993, seaweed in which 85 percent of the moisture was removed was classified in subheading 1212.20.00, HTSUS, while seaweed processed through electrical equipment a second time, resulting in additional moisture removal down to only 5% moisture remaining, was classified in subheading 2008.99.90, HTSUS.
We have reviewed the above-referenced laboratory tests showing the moisture levels of the seaweed at issue both before and after being processed in an infrared ceramic drying machine. The record shows that the moisture level of the seaweed under consideration was between 2.33% and 2.63% following drying in an infrared ceramic drying machine, which makes it unsuitable for restaurant use (the record contains the manufacturer’s report stating that the seaweed at issue is intended for restaurant use, but the manufacturer also states that seaweed with a moisture level of 5% or below is not suitable for restaurant use). Moreover, even prior to being processed in the drying machine, the moisture level of the subject seaweed was only between 5.14% and 6.12%. The manufacturing process submitted explained that the fresh seaweed harvested from the ocean is first air dried to yield a moisture level of less than 6%, so the seaweed at issue was dried prior to being further processed in an infrared ceramic drying machine. Online research shows that typical moisture levels of raw seaweed are 80-90%. Therefore, consistent with HQ 952635, we find that the seaweed at issue is a product of heading 2008, HTSUS.
With regard to the Protestant’s argument that Note 5 to Chapter 12, HTSUS, as well as Explanatory Notes to Chapter 12 and heading 12.12 support classification of the seaweed at issue in heading 1212, HTSUS, we disagree. While the referenced notes do not preclude seaweed from classification in Chapter 12 and heading 1212, HTSUS, to be classified in this heading seaweed must also be “dried.” As discussed above, the moisture level of the seaweed at issue is too low to be considered “dried” for tariff classification purposes.
With regard to the Protestant’s argument that Customs Courts have previously classified “Nori” as dried seaweed, we note that our position that the seaweed at issue does not qualify as “dried” is not based on it being described as “Nori.” Rather, it is based on the fact that its moisture level is too low to be considered “dried” for tariff classification purposes.
With regard to IKKO International’s argument that classification of the seaweed at issue in heading 2008, HTSUS, is inconsistent with a previous decision regarding the same merchandise, we also disagree. Upon review of the supporting documentation, submitted by Protestant, we note that the previous matter dealt with a different importer. Furthermore, based on our review of Exhibit B to the Protest, we also cannot determine that the merchandise at issue here is identical to the one previously imported and utilized similar manufacturing processes present in this case.
Based on the foregoing, we conclude that the seaweed at issue is classified in heading 2008, HTSUS, and specifically in subheading 2008.99.90, HTSUS, which provides for “Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: Other, including mixtures other than those of subheading 2008.19: Other: Other: Other.” See HQ 088315, dated April 30, 1991, and HQ 950002, dated November 13, 1991 (classifying roasted seaweed under subheading 2008.99.90, HTSUS).
HOLDING:
By application of GRIs 1 and 6, the subject seaweed is classified in subheading 2008.99.90, HTSUS, which provides for “Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: Other, including mixtures other than those of subheading 2008.19: Other: Other: Other.” The 2017 column one general rate of duty is 6%.
You are instructed to DENY 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. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
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,
Craig T. Clark, Director
Commercial and Trade Facilitation Division