CLA-2 OT:RR:CTF:TCM W967832 ASM
Port Director
Bureau of Customs and Border Protection
2350 N. Sam Houston Parkway East
Houston, TX 77032
RE: Application for Further Review of Protest No. 5301-05-150001; Tariff
Classification of 12-Hydroxystearic acid, CAS 106-14-9
Dear Port Director:
This is in reference to a Protest and Application for Further Review (AFR), filed on behalf of the importer, Amber A Division of Nidera Inc., regarding the classification of a chemical compound identified as 12-Hydroxystearic acid, CAS 106-14-9, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). A sample was received by Customs and Border Protection (CBP) and was analyzed by the Port of New Orleans Laboratory.
FACTS:
The merchandise at issue is a chemical compound identified as 12-Hydroxystearic acid, CAS 106-14-9. The merchandise has a chemical formula of C18H36O3 . This product is also known in the trade as 12-Hydroxyoctadecanoic acid. The chemical is derived from castor oil. It is an acyclic fatty carboxylic acid with an alcohol function group.
The merchandise was entered on 8/13/04, under subheading 2915.70.0020, HTSUSA, which provides for “Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides and peroxoyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives: Palmitic acid, stearic acid, their salts and esters, Stearic acid.
The port reclassified the subject merchandise, issued a Notice of Action, and liquidated the entries on 11/05/04, under subheading 2918.19.2000, HTSUSA, which provides for “Carboxylic acids with additional oxygen function and their anydrides, halides, peroxides
and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives: Carboxylic acids with alcohol function but without other oxygen function, their anhydrides, halides, peroxides, peroxyacids and their derivatives: Other: Other: Products described in additional U.S. note 3 to section VI”.
The importer timely filed a Protest and AFR, dated 2/2/05, asserting that the merchandise should have been classified under subheading 3823.19.4000, HTSUSA, which provides for “Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty acids; acid oils from refining: Other: Other”.
ISSUE: Whether the merchandise is excluded from classification in Chapter 38 and whether the merchandise is an acyclic separate chemically defined compound.
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed, within 90 days of liquidation of the first entry for entries made before December 18, 2004, and within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (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. 5301-05-150001 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.25 because the importer timely filed a Protest and AFR asserting that the merchandise should have been classified under subheading 3823.19.4000, HTSUSA, which is contrary to the Port’s classification of the subject merchandise under subheading 2918.19.2000, HTSUSA. Specifically, the importer alleges that the classification decision in the Notice of Action is inconsistent with the classification of substantially similar merchandise in New York Ruling letter (NY) A82790, dated June 5, 1996.
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI). 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 GRI may then be applied. 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 HTSUSA 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 2005 HTSUSA provisions under consideration are as follows:
Carboxylic acids with additional oxygen function
and their anhydrides, halides, peroxides and
peroxyacids; their halogenated, sulfonated, nitrated
or nitrosated derivatives:
Other:
Aromatic:
Other:
2918.19.2000 Products described in additional
U.S. note 3 to Section VI
* * *
Other:
2918.19.9000 Other
* * *
3823 Industrial monocarboxylic fatty acids; acid oils from
refining; industrial fatty alcohols:
Industrial monocarboxylic fatty acids; acid oils
from refining
Other:
3823.19.4000 Other
We begin by noting that the chemical formula for 12-hydroxystearic acid is, C18H36O3, which denotes a separate chemically defined compound. Separate chemically defined organic compounds, whether or not containing impurities, are classified in Chapter 29, HTSUSA, pursuant to Note 1(a), Chapter 29, which provides as follows:
Except where the context otherwise requires, the headings of this chapter apply only to:
Separate chemically defined organic compounds, whether or
not containing impurities;
* * *
As such, the instant merchandise is classifiable in Chapter 29, HTSUSA, specifically in heading 2918, HTSUSA, as a carboxylic acid. The Protestant has asserted that the subject merchandise is classified in Chapter 38, HTSUSA. However, Note 1(a), excludes separate chemically defined compounds. Furthermore, the EN’s to heading 3823 state that fatty acids of a purity of 90 percent or more (calculated on the weight of the dry product) are excluded from heading 3823 and are generally classified in headings 2915, 2916, or 2918.
The subject product, 12-Hydroxystearic acid, is sold commercially at 90-99 percent purity levels. Upon request, the importer provided additional information stating that the purity of 12-Hydroxystearic acid is 100 percent. As such, this separate chemically defined compound with 100 percent purity level is excluded from classification in Chapter 38, HTSUSA, under Note 1(a) and from heading 3823 under EN 38.23 (A)(7)(b).
The Protestant cited NY A82790 in support of the proposed classification of the subject merchandise in subheading 3823.19.4000, HTSUSA. In NY A82790, CBP classified an industrial monocarboxylic fatty acid product in subheading 3823.19.4000, HTSUSA, because the compound included fatty acids containing less than 90 percent purity. The ENs to 3823 only excludes “Other fatty acids of a purity of 90 percent or more”. In fact, the product cited in NY A82790 contained less than 90 percent of 12-Hydroxystearic acid. Thus, we note that the merchandise in NY A82790 is distinguishable from the instant merchandise, because the instant product does not have the same chemical composition or fatty acid purity percentage as the product classified in NY ruling A82790.
We conclude that Protestant’s arguments for classification in Chapter 38 are without merit. However, the correct 8-digit subheading still must be determined. As we have already noted, the substance, represented by the chemical formula C18H36O3, is described by Chapter 29 note 1(a) as a separately chemically defined compound. Additional U.S. Note 2(a) to Section VI states, in pertinent part, the following: “For the purposes of the tariff schedule: The term ‘aromatic’ as applied to any chemical compound refers to such compound containing one or more fused or unfused benzene rings; . . .” According to Hawley’s Condensed Chemical Dictionary, aromatic compounds are “a major group of unsaturated cyclic hydrocarbons containing one or more rings, typified by benzene, which has a 6-carbon ring containing three double bonds. . . . .”. See Hawley’s Condensed Chemical Dictionary, 12th ed., Lewis, Richard J., ed. ( Van Nostrand Reinhold Company, 1993).
Stearic acid by itself is a saturated (straight chain, no double or triple bonds) acyclic (open chain structure) monocarboxylic fatty acid provided for in heading 2915 (subheading 2915.70.0120 eo nomine). Hydroxy shows the presence of a hydroxyl functional group –OH (alcohol). There is no benzene ring in the structure. Therefore, Hydroxystearic acid, also known as Octadecanoic acid, hydroxy-, is a nonaromatic carboxylic acid with an additional oxygen function (alcohol) classifiable in heading 2918, HTSUS, specifically subheading 2918.19.9000, HTSUS.
The Port classified the merchandise at the eight-digit level in subheading 2918.19.2000, HTSUSA, which provides for “Carboxylic acids with additional oxygen function and their anydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives: Carboxylic acids with alcohol function but without other oxygen function, their anhydrides, halides, peroxides, peroxyacids and their derivatives: Other: Other: Products described in additional U.S. note 3 to section VI”. However, the product at issue is an “acyclic” (non-aromatic) carboxylic acid with alcohol function. Therefore, the proper classification for this product at the eight-digit level is subheading 2918.19.9000, HTSUSA, because there is no benzene ring in the structure and Hydroxystearic acid is a nonaromatic carboxylic acid with an additional oxygen function (alcohol). Thus, the merchandise was incorrectly assessed at liquidation and in the Notice of Action.
HOLDING:
The merchandise identified as 12-Hydroxystearic acid, CAS 106-14-9, is classifiable in subheading 2918.19.9000, HTSUSA, which provides for, “Carboxylic acids with additional oxygen function and their anydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivatives: Carboxylic acids with alcohol function but without other oxygen function, their anhydrides, halides, peroxides, peroxyacids and their derivatives: Other: Other: Other.” You are instructed to DENY the protest, except to the extent that reclassification of the merchandise as indicated results in a partial allowance.
The column one “General” rate of duty at the time of entry was 4 percent ad valorem. Duty rates are provided for the protestant’s convenience and are subject to change. The text of the most recent HTSUS and accompanying duty rates are provided on the worldwide web at www.usitc.gov.
In accordance with the 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division