H312954

 HQ H312954 July 8, 2021 CLA-2 OT:RR:CTF:CPMM H312954 RRB CATEGORY: Classification TARIFF NO.: 3823.19.2000; 2915.70.0110 Center Director Center of Excellence and Expertise—Petroleum, Natural Gas, and Minerals 237 W. Service Rd Champlain, NY 12919 Attn: Laurie Rivers, Import Specialist RE: Internal Advice Request; Classification of DT 80 (86.9% palmitic acid content), DT 98 (99.2% palmitic acid content), and DT 100 (45.5% palmitic acid content) Dear Center Director: This is in response to a request by the Center of Excellence and Expertise for Petroleum, Natural Gas and Minerals (“PNGM Center”) for Internal Advice(“IA”) pertaining to the proper classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of three different composite formulations of beaded fatty acids known as DT 80, DT 98, and DT 100. The PNGM Center submitted its request following receipt of a July 28, 2020, request by Grunfeld, Desiderio, Leibowitz, Silverman & Klestadt LLP (“GDLSK”), on behalf of Darby Trading Inc. (“Darby”), that the PNGM Center seek internal advice from our office pursuant to 19 C.F.R. § 177.11(a). In reaching our decision, we gave counsel for Darby the opportunity to meet with us telephonically on May 3, 2021 to provide additional comments. We have also given consideration to the subsequent arguments contained in counsel’s email, dated May 6, 2021, claiming classification of the DT 98 formulation in subheading 3823, HTSUS. In response, on May 10, 2021, we asked counsel to provide us with further documentation, by May 21, 2021, to support the statement in the May 6, 2021 email that “the stearic and myristic acids are not impurities (under Note 1(a)),” and whether the stearic and myristic acids serve a purpose for the DT 98. To date, our request has gone unanswered and our final determination as to the classification of the subject merchandise is set forth below. FACTS: U.S. Customs and Border Protection (“CBP”) confirmed that Darby has entered various unliquidated entries of three different composite formulations of beaded fatty acids known as DT 80, DT 98, and DT 100, each of which is described forthwith. Darby explains that DT 80 is produced by refining crude palm oil through a distillation process to remove Palm Fatty Acid Distillate (“PFAD”). The remaining fraction is then refined into a bleached and deodorized palm oil that is fractionated into an edible Refined Bleached Deodorized Stearin (“RBDS”). The triglycerides are saponified and the glycerol fraction is removed, leaving a crude fatty acid palm stearin. The crude fatty acid palm stearin is then further fractionated into three fractions of varying purity, 95% and 99% palmitic acid, and a residual mixture. The 95% palmitic acid is then mixed with 50% palmitic acid to produce the merchandise, consisting of approximately 86.9% palmitic acid. According to the specification sheet, DT 80 is composed of the following: Crude Fat: 99% min Total Fatty Acids: 98% min Free Fatty Acids, as Palmitic: 96-99% Moisture: 0.5% max Typical Fatty Acid Profile: C12:0 Lauric Acid: 2% max C14:0 Myristic Acid: 5% max C16:0 Palmitic Acid: 80-90% max (typical 85%) C18:0 Stearic Acid: 10% max C18:1 Oleic Acid: 4-12% C18:2 Linoleic Acid: 1-6% The certificate of analysis confirms the ingredient breakdown for DT 80 and identifies the palmitic acid content as 86.9%. The final DT 80 is a beaded product, with a combination of fatty acids, including palmitic, lauric, myristic, stearic, oleic, and linoleic acids. Darby also explains that DT 98 is produced by further processing refined, bleached, and deodorized (“RBD”) palm stearin by first hydrolyzing the triglycerides present. The resulting glycerol fraction is removed, leaving crude palm stearin fatty acids. These are hydrogenated and subsequently distilled, which separates the various fatty acids present. The merchandise is a fraction resulting from this distillation containing not less than 98% palmitic acid. According to the specification sheet, DT 98 is composed of the following: Crude Fat: 99% min Total Fatty Acids: 98% min Free Fatty Acids, as Palmitic: 98.5-100% Typical Fatty Acid Profile: C14:0 Myristic Acid: 2% max C16:0 Palmitic Acid: 98% min C18:0 Stearic Acid: 2% max Other: 1% max The certificate of analysis confirms the ingredient breakdown for DT 98 and identifies its palmitic acid content as 99.2%. The final DT 98 is a beaded product, with a combination of fatty acids, including palmitic, myristic, and stearic acids. DT 100 is produced by further processing RBD palm stearin by first hydrolyzing the triglycerides present, leaving crude palm stearin fatty acids. These are further fractionated and blended to produce DT 100 liquid. DT 100 liquid is then spray dried into solid DT 100, which consists of 40%-60% palmitic acid, 30%-50% stearic acid, and smaller amounts of other fatty acids. According to the specification sheet, DT 100 is composed of the following: Total Fat: 99% min Free Fatty Acids, as Palmitic: 80% min Total Fat Content: 99% min Moisture: 1% max Typical Fatty Acid Profile: C14:0 Myristic Acid: 5% max C16:0 Palmitic Acid: 40-60% C18:0 Stearic Acid: 30-50% C18:1 Oleic Acid: 15% max The certificate of analysis confirms the ingredient breakdown for DT 100 and identifies its palmitic acid content as 45.5%. The final DT 100 is a beaded product, with a combination of fatty acids, including palmitic, stearic, oleic, and myristic acids. The final product of each fatty acid formulation—DT 80, DT 98 and DT 100—is mixed with other ingredients after importation for feeding dairy cows. Darby entered each of the fatty acid product formulations under subheading 1511.90.0000, HTSUSA (“Annotated”), which provides for “Palm oil and its fractions, whether or not refined, but not chemically modified: Other.” CBP issued a rate advance amending the classification of DT 80 to subheading 2915.70.0110, HTSUSA, as “Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivative: Palmitic acid, stearic acid, their salts and esters: Palmitic acid.” In response to CBP’s liquidation of one entry of DT 80 in subheading 2915.70.0110, HTSUSA, Darby filed a Protest and AFR on July 17, 2020, asserting that DT 80 is properly classified under subheading 3823.19.2000, HTSUSA, as “Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols: Industrial monocarboxylic fatty acids; acid oils from refining: Other: Derived from coconut, palm-kernel or palm oil” at a duty rate of 2.3% ad valorem. In Headquarters Ruling Letter (“HQ”) H312647, dated February 16, 2021, we granted Darby’s protest and reliquidated DT 80 in subheading 3823.19.2000, HTSUSA. For the unliquidated entries of DT 80, DT 98, and DT 100, Darby asserts that these products are properly classified in subheading 3823.19.2000, HTSUSA, which provides for “Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols: Industrial monocarboxylic fatty acids; acid oils from refining: Other: Derived from coconut, palm-kernel or palm oil” at a duty rate of 2.3% ad valorem. ISSUE: Whether the subject DT 80, DT 98, and DT 100 are classified in subheading 2915.70.0110, HTSUSA, as “Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivative: Palmitic acid, stearic acid, their salts and esters: Palmitic acid,” or in subheading 3823.19.2000, HTSUSA, as “Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols: Industrial monocarboxylic fatty acids; acid oils from refining: Other: Derived from coconut, palm-kernel or palm oil.” 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 t

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. GRI 6 states that, “[f]or legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.” The 2020 HTSUS provisions under consideration are as follows:2915 Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulfonated, nitrated or nitrosated derivative:2915.70.01 Palmitic acid, stearic acid, their salts and esters: 2915.70.0110 Palmitic acid. . . 3823 Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols: Industrial monocarboxylic fatty acids; acid oils from refining:3823.19 Other3823.19.2000 Derived from coconut, palm-kernel or palm oil. . .* * * *Note 1(a) to chapter 29, HTSUS, provides, in pertinent part:Except where the context otherwise requires, the headings of this chapter apply only to:Separate chemically defined organic compounds, whether or not containing impurities; Note 1(a) to chapter 38, HTSUS, provides, in pertinent part:This chapter does not cover:Separate chemically defined elements or compounds with the exceptions of the following:Artificial graphite (heading 3801);Insecticides, rodenticides, fungicides, herbicides, antisprouting products a