CLA-2-04:RR:NC:2:231 F81802
Mr. David Dunbar
Katten, Muchin, and Zavis
525 West Monroe Street, Suite 1600
Chicago, IL 60661-3693
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of condensed buttermilk processed in Canada from sweet cream buttermilk of Canadian, European or New Zealand origin; Article 509. The product may also be
produced in Europe or New Zealand.
Dear Mr. Dunbar:
In your letter, dated January 12, 2000, you requested a ruling, on behalf of your client, Kerry, Inc., Beloit, WI, on the status of condensed buttermilk under the NAFTA.
The merchandise is comprised of condensed buttermilk that has been processed in Canada from sweet cream buttermilk of Canadian, European or New Zealand origin. The sweet cream buttermilk used in this product will be expressed from butter during the churning process that makes butter from cream. Whether the condensed cultured buttermilk is made in Canada, Europe or New Zealand, and regardless of the origins of its ingredients, it will be produced exclusively from sweet cream buttermilk without the addition of ferments or of any other ingredients. The condensed buttermilk will be produced by one of the following manufacturing methods:
Start with fluid sweet cream buttermilk and evaporate the fluid to 35 to 40 percent solids, or
Reconstitute sweet cream buttermilk powder with water to obtain a fluid which is 35 to 40 percent solids; or
A combination of methods (1) and (2) - e.g., sweet cream buttermilk powder will be reconstituted with fluid and then evaporate the reconstituted product to obtain a fluid that is 35 to 40 percent solids.
Regardless of the production method used, the final condensed buttermilk product will be a liquid consisting of 35-40 percent dry matter. The product will be shipped to the United States in 300 gallon liquid tote containers or tank trucks. Kerry will sell the condensed cultured buttermilk to industrial customers who will use it principally in bakery products such as buttermilk biscuits and pancakes, cheese powders, and snack seasonings.
In your correspondence you indicate that the condensed buttermilk will have the following composition on a dry basis:
Milk fat: 4.5 percent minimum (5.2 percent typical)
Milk protein: 30 percent minimum (34 percent typical)
Lactose: 54 percent typical
Ash: 7.6 percent typical
Lactic acid or pH: 0.18 maximum
We note that sweet buttermilk is not a fermented or acidified product. It is, simply, the byproduct of butter churning. Reference sources indicate that sweet buttermilk is distinguishable from whole or skim milk in that it has a different taste or flavor from other fluid milk. It contains small flecks of butter an elevated phospholipid content. In the publication Newer Knowledge of Milk, 3rd ed. (National Dairy Council, Chicago, IL), it is noted, on page 195, that buttermilk has a phospholipid content of about 0.1819 percent. This represents about 5 times the amount of phospholipids found in whole milk (0.0337 percent) and 10.76 times the amount of phospholipids found in skim milk (0.0169 percent). The phospholipid content of buttermilk makes it a desirable ingredient in bakery mixes.
The applicable subheading for condensed buttermilk will be 0403.90.2000, 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, sour cream containing not over 45 percent by weight of butterfat; buttermilk, fluid, buttermilk. The general rate of duty will be 0.34 cents per liter.
Condensed buttermilk that is manufactured in Canada from Canadian origin sweet cream buttermilk, being wholly obtained or produced entirely in the territories of Canada, Mexico, and/or the United States, will meet the requirements of HTSUSA General Note 12(b)(i), and will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
Condensed buttermilk that is manufactured in Canada from sweet cream buttermilk of European or New Zealand origin, does not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials (the sweet cream buttermilk) used in the production of the goods will not undergo the change in tariff classification required by HTSUSA General Notes 12(b)(ii)(A) and 12(t)/4.
This product may be regulated by state laws at the point of destination. For products destined for New York State, inquiries should be addressed to Mr. Harold Rudnick, Head of the Division of Milk Control in Albany, NY, telephone number (518) 457-1772.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR 181).
This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.
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