OT:RR:CTF:FTM H295287 TSM
Conor Buckley
Socius Ingredients, LLC
1007 Church St., Suite 305
Evanston, IL 60201
RE: Tariff classification of a certain microencapsulated omega-3 fish oil powder.
Dear Mr. Buckley,
This is in response to your request, on behalf of Socius Ingredients, LLC (“Socius”), dated July 21, 2017, for a ruling regarding the tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of a certain microencapsulated omega-3 fish oil powder.
FACTS:
The product at issue is a certain microencapsulated fish oil powder composed of concentrated omega-3 docosahexaenoic acid (“DHA”) fish oil mixed with natural tocopherols, ascorbyl palmitate, sodium caseinate, dextrose monohydrate, dried glucose syrup, sodium ascorbate, and citric acid. The fish oil powder contains 60% fat and based on the information submitted, the triglyceride concentration of the imported product is approximately 58%. The fish oil used to produce product consists of 97% triglycerides, 2% monoglycerides, and ? 1% diglycerides. The product is imported in bulk and will be sold as an ingredient to food and supplement manufacturers. The sodium ascorbate is said to be used as an anti-oxidant, and the remaining ingredients are for forming a hard shell encapsulating material.
On January 24, 2018, the U.S. Customs and Border Protection (“CBP”) Office of Laboratory and Scientific Services (“CBP Laboratory”) analyzed a sample of microencapsulated fish oil powder at issue (described as a brown powder). Pursuant to the CBP Laboratory’s Report # NY20171257, the product contains 60% fat, which is consistent with the requestor’s claim that the product contains fish oil enriched in DHA acid, an omega-3 fatty acid. The CBP Laboratory further states that the product is a preparation based on fish oil with enriched omega-3 (DHA).
ISSUE:
Whether the imported microencapsulated fish oil powder is classified under heading 1504, HTSUS, as “[f]ats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified” or under heading 2106, HTSUS, as “[f]ood 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.
The 2019 HTSUS provisions under consideration are as follows:
1504 Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified
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2106 Food preparations not elsewhere specified or included
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In understanding the language of 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 Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
Genaral ENs to Chapter 15 provide in relevant parts as follows:
This Chapter covers:
Animal or vegetable fats and oils, whether crude, purified or refined or treated in certain ways (e.g., boiled, sulphurised or hydrogenated).
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With the exception of sperm oil and jojoba oil, animal or vegetable fats and oils are esters of glycerol with fatty acids (such as palmitic, stearic and oleic acids).
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ENs to heading 1504 provide in relevant part the following:
This heading covers fats and oils and their fractions, derived from several varieties of fish (cod, halibut, menhaden, herring, sardines, anchovy, pilchard, etc.) or marine mammals (whales, dolphins, seals, etc.). They are extracted from the body or liver of the fish or marine mammal or from waste thereof. They usually have a characteristic fishy smell and a disagreeable taste, and vary in colour from yellow to reddish brown.
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ENs to heading 2106 provide in relevant part as follows:
Provided that they are not covered by any other heading of the Nomenclature, this heading covers:
Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption.
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.)…
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In view of the “not elsewhere specified or included” text in heading 2106, HTSUS, before classifying the product under heading 2106, HTSUS, we must first determine whether it can be classified in any other heading. The microencapsulated omega-3 fish oil powder at issue contains, among other ingredients, fish oil. Fats and oils of fish are classified under Chapter 15 and, specifically, under heading 1504, HTSUS. Accordingly, we have to consider whether the product at issue is classified under Chapter 15, HTSUS.
The General EN to Chapter 15 defines the term “animal or vegetable fats and oils” as “esters of glycerol with fatty acids (such as palmitic, stearic and oleic acids).” These glycerol esters are known as glycerides. In Jedwards Int’l, Inc. v. United States, 161 F. Supp. 3d 1354 (Ct. Int’l Trade 2016), the court observed that the EN descriptive, “esters of glycerol with fatty acids,” is mentioned in many lexicographic sources defining animal oils and fats. Id. at 1360. The court found that the typical “esters of glycerol” found in animal fats are chiefly made up of triglycerides with minor constituents such as free fatty acids, phospholipids, sterols, hydrocarbons, pigments, waxes, and vitamins.” Id. (internal citations omitted). The product at issue in Jedwards was krill oil, which consisted of 53% phospholipids, 23% triglycerides, 8% free fatty acids, 3% monoglycerides, 3% diglycerides, 7% water, and 1.7% sodium chloride, and astaxanthin (an antioxidant). While the court did not determine a percentage threshold of triglycerides that must be present to be considered animal oil, the court held that the triglycerides in the krill oil are not the “predominant” constituent within the meaning of Chapter 15, HTSUS. Id. at 1361.
CBP has a long-standing position that in order to be classified in Chapter 15, HTSUS, as fats or oils, products must predominantly be composed of triglycerides. See Headquarters Ruling Letter (“HQ”) H102457, dated September 8, 2010; HQ 963166, dated December 11, 2001; HQ 965396, dated July 23, 2002; HQ 964531, dated March 14, 2002; HQ 965699, dated September 25, 2002; New York Ruling Letter (“NY”) N234974, dated November 19, 2012. Furthermore, “predominant” is defined as “[p]resent as the strongest or main element,” or “being most frequent or common.” In HQ 965396, CBP found that a product with 90% triglycerides, 7% diglycerides, and 2% monoglycerides had too many di- and monoglycerides for the substance to be characterized as an oil. Accordingly, only products composed primarily of triglycerides are classifiable under heading 1515, HTSUS.
Review of ingredients comprising the microencapsulated fish oil powder product at issue shows that it contains omega 3 DHA fish oil powder, as well as natural tocopherols, ascorbyl palmitate, sodium caseinate, dextrose monohydrate, dried glucose syrup, sodium ascorbate, and citric acid. The triglyceride concentration of the imported product is approximately 58%. The referenced CBP Laboratory’s Report, which analyzed a sample of microencapsulated fish oil powder at issue (described as a brown powder), also states that the product at issue contains 60% fat. The CBP Laboratory’s Report further concludes that the product is a preparation based on fish oil with enriched omega-3 (DHA).
Upon review, we find that while the oil used in the manufacture of the product may have the characteristics of a fat or oil of Chapter 15, the imported product is not a fat or oil, but is a powder, and is not predominantly a triglyceride. Moreover, oil based products containing more than a minimal percentage of additional ingredients are excluded from Chapter 15, HTSUS. Accordingly, we find that the product at issue cannot be classified in Chapter 15, HTSUS. See NY N278459, dated December 5, 2016 (classifying a sufflower oil powder, consisting of 73% safflower oil, to be used in making dietary supplements in heading 2106, HTSUS); NY L81778, dated January 20, 2005 (classifying powdered oil products each containing 50% of one of the following: omega 3-6-9 powder, borage oil powder, DHA concentrate powder, flax oil powder, or evening primrose powder, as well as 25% powdered glucose, 10% powdered mannitol, and 15% powdered soy protein, caseinate, lecithin, and other ingredients, under heading 2106, HTSUS); and, NY N293133, dated January 19, 2018 (classifying an algal oil powder product, containing 48% algal oil, 15% sodium caseinate, 15% dried glucose syrup, 15 % dextrose monohydrate and 5% dried glucose, to be used in manufacture of infant formula, in heading 2106, HTSUS).
Heading 2106, HTSUS, provides for “Food preparations not elsewhere specified or included.” Food preparations of heading 2106 are generally considered to be mixtures of foods ingredients to be used in or with other foods. This is illustrated by EN 2106, supra, which lists several examples of goods composed of a mixture of ingredients. The product at issue, containing approximately 60% fish oil and 40% other ingredients (natural tocopherols, ascorbyl palmitate, sodium caseinate, dextrose monohydrate, dried glucose syrup, sodium ascorbate, and citric acid), is sold as an ingredient to food and supplement manufacturers. Moreover, as referenced above, the CBP Laboratory’s Report confirms that the product at issue is a preparation based on fish oil with enriched omega-3 (DHA), containing 60% fat. Therefore, we find that 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 EN 2106. See HQ H270926, dated October 25, 2016 (classifying a quail egg powder consisting of 40% dehydrated quail egg and 60% microcrystalline cellulose, to be used to manufacture dietary supplements, in heading 2106, HTSUS); NY N278459, dated December 5, 2016 (classifying a sufflower oil powder, consisting of 73% safflower oil, to be used in making dietary supplements in heading 2106, HTSUS); HQ 966213, dated March 18, 2004 (classifying Beta-carotene in a soy oil suspension, to be used as an ingredient in vitamin dietary supplements, in heading 2106, HTSUS); and, NY N293133, dated January 19, 2018 (classifying an algal oil powder product, containing 48% algal oil, 15% sodium caseinate, 15% dried glucose syrup, 15 % dextrose monohydrate and 5% dried glucose, to be used in manufacture of infant formula, in heading 2106, HTSUS).
Based on the foregoing, we conclude that the microencapsulated omega-3 fish oil powder is classified under heading 2106, HTSUS, and specifically under subheading 2106.90.98, HTSUS, which provides for “Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other.”
HOLDING:
By application of GRI 1, we find that the microencapsulated omega-3 fish oil powder is properly classified under heading 2106, HTSUS. Specifically, it is classified under subheading 2106.90.98, HTSUS, which provides for “Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other.” The 2020 column one, general rate of duty is 6.4%. 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/.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Yuliya A. Gulis, Chief Food, Textiles and Marking Branch