CLA-2-04:RR:NC:2:231 E87686
Mr. Timothy Stanceu, Esq.
Hogan and Hartson LLP
Columbia Square
555 13th Street, NW
Washington, DC 20004-1109
RE: The tariff classification of fermented milk and cream from Canada.
Dear Mr. Stanceu:
In your letter, dated March 24, 2000, you requested a classification ruling on behalf of your client, Kraft Foods, Inc., Madison, WI.
The instant merchandise is a fermented mixture of milk and cream. The ingredients are stated to consist of 72-76 percent fluid milk, 22-26 percent fluid cream, and 1-2 percent lactic starter cultures. The product will be manufactured in Canada by combining the fluid milk and cream, homogenizing and pasteurizing the mixture, cooling the product to 72-74 degrees Fahrenheit, and adding the bacterial cultures to start the fermentation process. Fermentation takes from 12-16 hours or until the mixture reaches a pH of 4.5-4.7. After fermentation, the product, in liquid form, will be shipped to the United States in refrigerated tank cars.
In the United States, Kraft will use the liquid fermented milk and cream product as a raw material in the commercial manufacturing of cream cheese: the imported product will be heated to 175-185 degrees Fahrenheit, after which the cultured mix will be separated into curd and whey. The curd portion will be combined with salt and vegetable gum to yield the finished cream cheese product.
It is noted that the combining of fluid milk and fluid cream in creating the dairy component of this product results in a mixture which is not “milk” for tariff purposes. Under the definition in note 1 to Chapter 4, “[t]he expression “milk” means full cream milk or partially or completely skimmed milk.” Accordingly, classification of this product under the provision for “Other…Fermented milk other than dried fermented milk or other than dried milk with added lactic ferments” in subheading 0403.90.85, HTSUS, as requested in your letter, would be precluded.
The applicable subheading for this fermented mixture of milk and cream, if entered under quota, will be 0403.90.9000, Harmonized Tariff Schedule of the United States (HTS), which provides for buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavored or containing added fruit, nuts or cocoa, other, other, other, described in additional U.S. note 10 to chapter 4 and entered pursuant to its provisions. The rate of duty will be 20 percent ad valorem.
The applicable subheading for fermented milk and cream, if entered outside the quota, will be 0403.90.9500, HTS, which provides for buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavored or containing added fruit, nuts or cocoa, other, other, other, other. The rate of duty will be $1.034 per kilogram, plus 17 percent ad valorem. In addition, products classified in subheading 0403.90.9500, HTS, will be subject to additional safeguard duties based on their value, as described in subheadings 9904.04.50 – 9904.05.01 in subchapter IV, Chapter 99, HTSUS, except as provided in U.S. Note 1 to subchapter IV, Chapter 99, which states that “[g]oods of Canada or Mexico imported into the United States shall not be subject to any of the provisions, duties or limitations of this subchapter.
You stated in your letter that the raw milk component in this product will be of Canadian origin. However, in order to issue a ruling under the NAFTA, it will be necessary to identify each constituent material with its country of origin as, for example, the origin of the fluid cream, the lactic starter cultures, skim milk powder (if used in this product, as indicated in earlier correspondence), etc.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Thomas Brady at 212-637-7064.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division