H314978

 HQ H314978 May 11, 2021 OT:RR:CTF:FTM H314978 TJS CATEGORY: Classification TARIFF NO.: 2206.00.90 Mr. Arthur DeCelle Lehrman Beverage Law 2911 Hunter Mill Road Suite 303 Oakton, VA 22124 RE: Revocation of NY N315004 and NY N313678; Tariff Classification of White Claw Hard Seltzer Dear Mr. DeCelle: This is in reference to New York Ruling Letter (“NY”) NY N315004, dated October 13, 2020, concerning the tariff classification of certain hard seltzer under the Harmonized Tariff Schedule of the United States (“HTSUS”). In that ruling, U.S. Customs and Border Protection (“CBP”) classified the hard seltzer at issue under subheading 2203.00.00, HTSUS, which provides for, “Beer made from malt: In containers each holding not over 4 liters.” NY N315004 modified NY N313678, dated August 28, 2020, which contained a clerical error and classified the hard seltzer under subheading 2203.90.00, HTSUS. Upon additional review, we have found the classification of this product under heading 2203, HTSUS, to be incorrect. For the reasons set forth below, we hereby revoke NY N315004 and NY N313678. You have asked for confidential treatment of the details of the production and packaging process in your submission. Inasmuch as your request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), your request for confidentiality is approved. The details of the production and packaging process in your letter and the attachments to your request for a binding ruling will not be released to the public. Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), a notice of the proposed action was published in the Customs Bulletin, Vol. 55, No. 11, on March 24, 2021. Two comments, which will be addressed below, were received in response to this notice. As a result of these comments, we are clarifying the analysis in our decision as it relates to the hard seltzer in question. Specifically, we are clarifying the fact that the White Claw Hard Seltzer is produced primarily from a fermented sugar brew with only trace amounts of malted ingredients. This fermented mixture, although referred to as “beer base,” lacks the color, aroma, and taste typical of beer made from malt, and the addition of seltzer water and flavoring further distinguish the final product from beer. The presence or absence of malted ingredients does not govern classification in heading 2206, rather, whether the hard seltzer lacks the characteristics of what is commonly and commercially recognized as beer made from malt is determinative for purposes of tariff classification in this case. FACTS: In NY N315004, the hard seltzer at issue was described as follows: The subject merchandise is described as five different flavors (Lime, Raspberry, Ruby Grapefruit, Black Cherry and Mango) of Hard Seltzer with the brand name “White Claw Hard Seltzer.” The products consist of Beer Base (15%-17%), Natural Flavors (2%-3%), Water (81%-82%) and trace amounts of Juice Concentrate, Cane Sugar, Citric Acid and Sodium Citrate. The beer base is composed of Sugar (51%), Yeast & Nutrients (less than 4%), Water and trace amounts of Malted Gluten-Free Grains. Malted gluten free grains are mixed with sugar and warm water. The mixture is then pitched with yeast, enzymes and yeast nutrients to aid the fermentation. The fermented mixture is then clarified and filtered to produce the beer base. The beer base is then mixed with the other ingredients, including cane sugar, juice concentrate, juice flavor and water to produce the bulk product with an alcohol by volume content of 5 percent. Each flavor of the bulk finished product is packaged in 12-ounce and 19.2-ounce aluminum beverage cans ready for export to the United States. In your request for a binding ruling, dated August 3, 2020, you described the White Claw Hard Seltzer as “a relatively new, gluten-free, low-calorie brand that has grown to become a significant subcategory of the U.S. beer market.” You further state that the hard seltzer is sold alongside beer. The White Claw website provides the following description of the finished beverages: “Crafted with quality ingredients, White Claw® Hard Seltzer is made from a blend of seltzer water, our gluten-free alcohol base, and a hint of fruit flavor.” The cans are labeled “Spiked Sparkling Water with a hint of [flavor].” ISSUE: What is the tariff classification of White Claw Hard Seltzer under the HTSUS? LAW AND ANALYSIS: Classification under the HTSUS 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 2 through 6 may then be applied in order. The HTSUS headings under consideration are as follows: 2203 Beer made from malt 2206 Other fermented beverages (for example, cider, perry, mead, sakè); mixtures of fermented beverages and mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified or included: * * * The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989). The EN to heading 2203, HTSUS, provides in pertinent part as follows: Beer is an alcoholic beverage obtained by fermenting a liquor (wort) prepared from malted cereals (most commonly barley or wheat), water and (usually) hops. Certain quantities of non-malted cereals (e.g., maize (corn) or rice) may also be used for the preparation of the liquor (wort). The addition of hops imparts a bitter and aromatic flavour and improves the keeping qualities. Cherries or other flavouring substances are sometimes added during fermentation. Sugar (particularly glucose), colouring matter, carbon dioxide and other substances may also be added. According to the fermenting process employed, the products may be bottom fermentation beer, obtained at a low temperature with bottom yeasts, or top fermentation beer, obtained at a higher temperature with top yeasts. Beer may be pale or dark, sweet or bitter, mild or strong. It may be put up in barrels, bottles or in airtight tins and may be marketed as ale, stout, etc. The EN to heading 2206, HTSUS, provides in relevant part as follows: This heading covers all fermented beverages other than those in headings 22.03 to 22.05. . . . All these beverages may be either naturally sparkling or artificially charged with carbon dioxide. They remain classified in the heading when fortified with added alcohol or when the alcohol content has been increased by further fermentation, provided that they retain the character of products falling in the heading. * * * You assert that the White Claw Hard Seltzer is properly classified in heading 2203, HTSUS, as beer. In particular, you claim that the hard seltzer meets the definitions of “beer” in the Internal Revenue Code (“IRC”) and the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulations. See 26 U.S.C. § 5052(a); 27 C.F.R. §§ 25.11, 25.15, 27.11. You state that although the excise tax is a separate function from tariff classification, the functions are substantially related. The TTB regulations you cite pertain to the collection of federal excise taxes on alcoholic products and are not intended as guidance for classification of imported merchandise under the HTSUS. Statutes, regulations and adm

Classification under the HTSUS 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 2 through 6 may then be applied in order.  The HTSUS headings under consideration are as follows:2203 Beer made from malt2206 Other fermented beverages (for example, cider, perry, mead, sakè); mixtures of fermented beverages and mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified or included:* * *The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989). The EN to heading 2203, HTSUS, provides in pertinent part as follows:Beer is an alcoholic beverage obtained by fermenting a liquor (wort) prepared from malted cereals (most commonly barley or wheat), water and (usually) hops. Certain quantities of non-malted cereals (e.g., maize (corn) or rice) may also be used for the preparation of the liquor (wort). The addition of hops imparts a bitter and aromatic flavour and improves the keeping qualities. Cherries or other flavouring substances are sometimes added during fermentation.Sugar (particularly glucose), colouring matter, carbon dioxide and other substances may also be added.According to the fermenting process employed, the products may be bottom fermentation beer, obtained at a low temperature with bottom yeasts, or top f