OT:RR:CTF:CPMMA H318471 AJK
TARIFF NO: 7607.20.50
Mr. Randy Rucker
Faegre Drinker Biddle & Reath LLP
191 N. Wacker Drive, Suite 3700
Chicago, IL 60606
RE: Modification of NY N316780; Classification of Aluminum Foil Lidding Stock
Dear Mr. Rucker:
This letter is in response to your correspondence, dated May 4, 2021, on behalf of Winpak Heat Seal Corporation (Winpak), in which you request reconsideration of New York Ruling Letter (NY) N316780, issued on February 4, 2021, concerning the classification of aluminum foil lidding stock under the Harmonized Tariff Schedule of the United States (HTSUS). In NY N316780, U.S. Customs and Border Protection (CBP) classified the aluminum foil lidding stock in subheading 7607.11.6090, HTSUSA (Annotated), as aluminum foil that is not backed and is rolled but not further worked. In your reconsideration request, however, you assert that the merchandise is properly classified in subheading 7607.20.5000, HTSUSA, as backed aluminum foil, and you corrected the information regarding the manufacturing process of the subject merchandise. We have reviewed NY N316780, together with the information in your request for reconsideration, and found the ruling letter to be incorrect only with respect to the classification of the subject merchandise.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. § 1625(c)(1)), 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 of the proposed action was published in the Customs Bulletin, Vol. 57, No. 28, on July 19, 2023. No comment was received in response to this notice.
FACTS:
The subject merchandise was described in NY N316780 as follows:
The product under consideration is heat-sealable lidding stock that is made using an aluminum foil base upon which other materials are added. You have described the product as a three-layered lidding stock. The inner side of the aluminum, the surface that will be in contact with food, is coated with a polymeric layer that provides sealability to a rigid container. The outer layer is coated with a thinner polymeric layer that protects the foil from corrosion and provides adherence for printed inks.
According to your submission, the foil base is imported into Canada in various thicknesses of less than 0.2 mm. You have stated that the foil will be sourced from various countries, but for the purposes of this ruling, you have requested that we consider foil that originates specifically in Luxembourg. The remaining materials are imported into Canada from Norway, Mexico, and the United States (U.S.) and are used to produce both the outer layer and the inner layer of the final product. In Canada, the bare foil is unwound and, in a continuous process line, the foil goes through a coating station where a liquid coating is applied to the outer side of the foil. The semi-finished heat-sealable lidding stock is then subjected to a hot air drying system which removes any residual solvent or water and dries the coating. You state the inner layer is made from a solid material which is melted and then applied to the middle (foil) layer in a molten form. The resultant product is then imported into the U.S. where it is shipped to the lid producer for production of heat-sealable lids from this heat-sealable lidding stock.
On January 27, 2021, Winpak’s former counsel participated in a call with CBP’s National Commodity Specialist Division (NCSD) and explained that the inner layer was applied to the foil in a molten form. In your reconsideration request, however, you describe the co-extrusion process of the inner layer as follows:
Unlike the outer layer (further discussed below), the inner layer is applied to the aluminum foil base as a solid form (i.e., a solid plastic film) by a co-extrusion process. During this process, plastic resin is subjected to heat and pressure inside the barrel/cylinder of an extruder to become molten and then forced by the extruder screw through the narrow slit of the extrusion die. The slit in the exclusion die is straight, so the molten resin emerges from the extruder as a solid film prior to application onto the aluminum foil. The adhesive that is co-extruded with the inner layer film is also solid (consisting of an ethylene acrylic acid copolymer).
Due to this conflicting information about the co-extrusion process, CBP requested additional information from Winpak on April 4, 2022. On May 27, 2022, you submitted additional evidence to support your claim that the inner layer is applied in solid, not molten, form.
ISSUE:
Whether the aluminum foil lidding stock is classified in subheading 7607.11.60, HTSUS, as “Aluminum foil (whether or not printed, or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm: Not backed: Rolled but not further worked: Of a thickness not exceeding 0.15 mm: Of a thickness exceeding 0.01 mm”; or subheading 7607.20.50, HTSUS, as “Aluminum foil (whether or not printed, or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm: Backed: Other.”
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 HTSUS provisions at issue are as follows:
7607 Aluminum foil (whether or not printed, or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm:
Not backed:
7607.11 Rolled but not further worked:
Of a thickness not exceeding 0.15 mm:
7607.11.60 Of a thickness exceeding 0.01 mm
7607.20 Backed:
7607.20.50 Other
Note 9(d) to section XV, which includes chapter 76, HTSUS, provides as follows:
9. For the purposes of chapters 74 to 76 and 78 to 81, the following expressions have the meanings hereby assigned to them:
* * * * * *
(d) Plates, sheets, strip and foil
Flat-surfaced products (other than the unwrought products), coiled or not, of solid rectangular (other than square) cross section with or without rounded corners (including “modified rectangles” of which two opposite sides are convex arcs, the other two sides being straight, of equal length and parallel) of a uniform thickness, which are:
-of rectangular (including square) shape with a thickness not exceeding one-tenth of the width;
…
Headings for plates, sheets, strip, and foil apply, inter alia, to plates, sheets, strip, and foil with patterns (for example, grooves, ribs, checkers, tears, buttons, lozenges) and to such products which have been perforated, corrugated, polished or coated, provided that they do not thereby assume the character of articles or products of other headings.
* * * * * *
The Harmonized Commodity Description and Coding System (HS) Explanatory Notes (ENs) constitute the official interpretation of the HS. While not legally binding or dispositive, the ENs provide a commentary on the scope of each heading of the HS at the international level and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
The General ENs to chapter 72 provides, in pertinent part:
(C) Subsequent manufacture and finishing
The finished products may be subjected to further finishing treatments or converted into other articles by a series of operations such as:
…
(2) Surface treatments or other operations, including cladding, to improve the properties or
appearance of the metal, protect it against rusting and corrosion, etc. Except as otherwise provided in the text of certain headings, such treatments do not affect the heading in which the goods are classified. They include:
…
(d) Surface finishing treatment, including;
…
(v) coating with non-metallic substances, e.g., enamelling, varnishing, lacquering, painting, surface printing, coating with ceramics or plastics, including special processes such as glow discharge, electrophoresis, electrostatic projection and immersion in an electrostatic fluidised bath followed by radiation firing, etc.
The General ENs to chapter 76 provides, in pertinent part:
Products and articles of aluminium are frequently subjected to various treatments to improve the properties or appearance of the metal, to protect it from corrosion, etc. These treatments are generally those referred to at the end of the General Explanatory Note to Chapter 72, and do not affect the classification of the goods.
EN 76.07 provides, in pertinent part:
This heading covers the products defined in Note 9(d) to Section XV, when of a thickness not exceeding 0.2 mm.
The provisions of the Explanatory Note to heading 74.10 relating to copper foil apply, mutatis mutandis, to this heading.
EN 74.10, HTSUS, provides, in pertinent part, as follows:
Other foil, such as that used for making fancy goods, is often backed with paper, paperboard, plastics or similar backing materials, either for convenience of handling or transport, or in order to facilitate subsequent treatment, etc.
* * * * * *
There is no dispute that the subject aluminum foil lidding stocks—which contain layers of polymer—are properly classified in heading 7607, HTSUS, which is an eo nominee provision that provides for aluminum foil of a thickness not exceeding 0.2 mm. See ENs to chapter 76; ENs to chapter 72; EN 76.07; Note 9(d) to section XV; EN 74.10. Accordingly, the classification analysis herein is applicable only at the 8-digit subheading level.
In NY N316780, CBP classified the subject aluminum foil lidding stock in subheading 7607.11.60, HTSUS, as not backed, rolled but not further worked aluminum foil. We disagree. We find that this incorrect classification, however, resulted in part due to Winpak’s submission of erroneous information regarding the manufacturing process of the merchandise. First, Winpak’s former counsel incorrectly stated that the outer layer of the merchandise is coated with a polymeric layer and that the inner layer of polymer is also applied to the foil in a molten form. Based on this information, CBP concluded in NY N316780 that both sides of the foil are coated and thus, do not constitute “backing” for classification purposes. Second, CBP held that the subject merchandise was an aluminum foil that was “not further worked.” This finding, however, is inconsistent with past CBP practice and case law from the Court of International Trade (CIT). In accordance with the CIT’s finding in Winter-Wolff, Inc. v. United States, 22 CIT 70, 78 (1998), CBP held in HQ 965999, dated December 19, 2002, that coatings on aluminum foil constitute “further working.” See also, HQ 966004, dated Dec. 19, 2002; HQ 965976, dated Dec. 19, 2002. Accordingly, the classification of the subject aluminum foil lidding stock under subheading 7607.11.6090, HTSUSA, as aluminum foil that is not backed and is rolled but not further worked, was incorrect.
In your reconsideration request, you contend that that the subject merchandise is properly classified in subheading 7607.20.50, HTSUS, because the plastic film, which forms the inner side of the aluminum foil, is applied to the foil in a solid—not solvent—form. You also state that the plastic film strengthens and supports the aluminum foil by limiting the tearability and facilitating further processing of the merchandise. Upon our review of the new information provided, we agree. Neither the HTSUS nor the ENs define the terms “backed” and “backing.” In Amcor Flexibles Singen GMBH v. United States, however, the CIT held that “in the context of Heading 7607, ‘backed’ is most appropriately construed to mean ‘supporting.’” 425 F. Supp. 3d 1287, 1298 (Ct. Int’l Trade 2020). As evidenced by the functions and purpose of the inner layer of plastic film, we find that the solid plastic film provides sufficient support to the aluminum foil and thus, constitutes “backing” for classification purposes. By application of GRI 6, therefore, the subject aluminum foil lidding stocks are classified under subheading 7607.20.50, HTSUS, as backed aluminum foil.
HOLDING:
In accordance with the above analysis and by application of GRI 1, the aluminum foil lidding stock is classified in heading 7607, HTSUS, and, by application of GRI 6, is specifically classified in subheading 7607.20.50, HTSUS, which provides for “Aluminum foil (whether or not printed, or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm: Backed: Other.” The 2023 column one, general rate of duty is free.
Duty rates are provided for your convenience and 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 N316780, dated February 4, 2021, is hereby modified in part with respect to the classification of aluminum foil lidding stock only.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Yuliya A. Gulis, Director Commercial and Trade Facilitation Division