H313780

 HQ H313780 January 13, 2021 OT:RR:CTF:FTM H313780 TJS CATEGORY: Classification; Origin TARIFF NO.: 1806.20.81; 1806.20.83 Ms. Ami Barone 721 Logistics LLC 399 Market Street, Suite #220 Philadelphia, PA 19106 RE: Tariff Classification of Semi Sweet Chocolate Blend; USMCA; Country of Origin Marking Dear Ms. Barone, This is in response to your request, dated March 2, 2020, in which you request a binding ruling, on behalf of The Blommer Chocolate Company (“Blommer”), concerning the tariff classification, country of origin marking, and eligibility of a certain sweetened cocoa powder mixture for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for review. Our ruling is set forth below. FACTS: The merchandise at issue, described as “Semi Sweet Chocolate Blend,” is a sweetened cocoa powder mixture consisting of 60% by dry weight of sugar, 30% whole milk powder, and 10% cocoa powder. You state that the raw cane sugar (not flavored nor colored) can be of different origins, but that the sugar at issue is not from the United States, Mexico, or Canada. The raw sugar is shipped to Canada where it is refined. The cocoa powder is produced in the United States and the whole milk powder is produced in New Zealand or, in some instances, Canada. The whole milk powder and cocoa powder are sent to Canada, where they are blended with the refined sugar into a homogeneous mixture and packaged in 2,000-pound bags for shipment to the United States. The final product is intended to be used in the manufacture of finished chocolate products and the powder blend will not be put up for retail sale. You further state that the product contains 8.4% butterfat and 30% milk solids. ISSUES: What is the tariff classification of the “Semi Sweet Chocolate Blend”? Whether the “Semi Sweet Chocolate Blend” imported from Canada is eligible for preferential tariff treatment under the USMCA. What is the country of origin of the “Semi Sweet Chocolate Blend” for marking purposes? LAW AND ANALYSIS: Tariff Classification Classification of goods under the Harmonized Tariff Schedule of the United States (“HTSUS”) is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the 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 GRI may then be applied. The 2020 HTSUS provisions under consideration are as follows: 1806: Chocolate and other food preparations containing cocoa: 1806.10: Cocoa powder, containing added sugar or other sweetening matter: 1806.20: Other preparations in blocks, slabs or bars, weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg: * * * * * Note 2 to Chapter 18, HTSUS, provides as follows: Heading 1806 includes sugar confectionery containing cocoa, and, subject to note 1 to this chapter, other food preparations containing cocoa. * * * * * In understanding the language of the HTSUS, the Explanatory Notes (“EN”) of the Harmonized Commodity Description and Coding System may be utilized. The EN, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989). The EN to heading 1806, HTSUS, provides in pertinent part as follows: Chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter; in some cases, cocoa powder and vegetable oil may be substituted for cocoa paste. Milk, coffee, hazelnuts, almonds, orange-peel, etc., are sometimes also added. Chocolate and chocolate goods may be put up either as blocks, slabs, tablets, bars, pastilles, croquettes, granules or powder, or in the form of chocolate products filled with creams, fruits, liqueurs, etc. The heading also includes all sugar confectionery containing cocoa in any proportion (including chocolate nougat), sweetened cocoa powder, chocolate powder, chocolate spreads, and, in general, all food preparations containing cocoa (other than those excluded in the General Explanatory Note to this Chapter). [. . .] Subheading 1806.20 Goods presented in “other bulk forms” are covered by subheading 1806.20 if they take the form of pellets, beans, rounds, drops, balls, chips, flakes, sprinkles, shavings and similar. Goods under this subheading are usually intended for the manufacture of chocolate products, bakery products, confectionery, ice creams, etc., or for decoration. * * * * * There is no dispute that the subject merchandise is classified in heading 1806, HTSUS, as a food preparation containing cocoa. You suggest that the “Semi Sweet Chocolate Blend” is classified under subheading 1806.10.10, HTSUS, which provides for “Chocolate and other food preparations containing cocoa: Cocoa powder, containing added sugar or other sweetening matter: Containing less than 65 percent by weight of sugar: Described in additional U.S. note 1 to this chapter and entered pursuant to its provisions.” As stated above, the “Semi Sweet Chocolate Blend” contains sugar, powdered milk, and cocoa powder. CBP classifies mixtures that only contain cocoa powder and sugar in subheading 1806.10, HTSUS. See, e.g., Headquarters Ruling Letter (“HQ”) 954722 (Mar. 11, 1994); New York Ruling Letter (“NY”) 814755 (Sept. 25, 1995); and NY L88557 (Nov. 25, 2005). The whole milk powder present in the subject chocolate blend precludes classification in subheading 1806.10, HTSUS. Because the “Semi Sweet Chocolate Blend” is shipped in 2,000-pound bags, we find that it meets the requirements of subheading 1806.20, HTSUS, which covers other preparations in powder form in containers exceeding 2 kilograms. We also note that the chocolate blend is used in the manufacture of other foodstuffs, which is consistent with the EN to subheading 1806.20, HTSUS. This is consistent with NY N288870, dated August 23, 2017, in which CBP classified a chocolate preparation consisting of 75% refined cane sugar, 20% skim milk powder, and 5% chocolate powder and shipped in 25 kilogram bags in subheading 1806.20, HTSUS. The chocolate preparation in NY N288870 contains similar ingredients, albeit in different quantities, as the “Semi Sweet Chocolate Blend.” Subheadings 1806.20.81 and 1806.20.83, HTSUS, cover dairy products described in Additional U.S. Note 1 to Chapter 4, HTSUS, which provides as follows: For the purposes of this schedule, the term “dairy products described in additional U.S. note 1 to chapter 4” means any of the following goods: malted milk, and articles of milk or cream (except (a) white chocolate and (b) inedible dried milk powders certified to be used for calibrating infrared milk analyzers); articles containing over 5.5 percent by weight of butterfat which are suitable for use as ingredients in the commercial production of edible articles (except articles within the scope of other import quotas provided for in additional U.S. notes 2 and 3 to chapter 18); or, dried milk, whey or buttermilk (of the type provided for in subheadings 0402.10, 0402.21, 0403.90 or 0404.10) which contains not over 5.5 percent by weight of butterfat and which is mixed with other ingredients, including but not limited to sugar, if such mixtures contain over 16 percent milk solids by weight, are capable of being further processed or mixed with similar or other ingredients and are not prepared for marketing to the ultimate consumer in the identical form and package in which imported. The “Semi Sweet Chocol

Tariff ClassificationClassification of goods under the Harmonized Tariff Schedule of the United States (“HTSUS”) is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the 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 GRI may then be applied. The 2020 HTSUS provisions under consideration are as follows:1806: Chocolate and other food preparations containing cocoa:1806.10: Cocoa powder, containing added sugar or other sweetening matter:1806.20: Other preparations in blocks, slabs or bars, weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg:* * * * * Note 2 to Chapter 18, HTSUS, provides as follows:Heading 1806 includes sugar confectionery containing cocoa, and, subject to note 1 to this chapter, other food preparations containing cocoa.* * * * * In understanding the language of the HTSUS, the Explanatory Notes (“EN”) of the Harmonized Commodity Description and Coding System may be utilized. The EN, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).    The EN to heading 1806, HTSUS, provides in pertinent part as follows:Chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter; in some cases, cocoa powder and vegetable oil may be substituted for cocoa paste. Milk, coffee, hazelnuts, almonds, orange-peel, etc., are sometimes also added.Chocolate and chocolate goods may be put up either as blocks, slabs, table