Trade Law Daily is a service of Warren Communications News.

February 7, 2007 CBP Bulletin Notice on Low Fat Butter Substitutes

In the February 7, 2007 issue of the U.S. Customs and Border Protection Bulletin (CBP Bulletin) (Vol. 41, No. 7), CBP published a notice proposing to revoke two rulings in order to correct classification errors, and revoke certain treatment, as follows:

Sign up for a free preview to unlock the rest of this article

Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.

Proposed revocation of rulings; proposed revocation of treatment. CBP is proposing to revoke two rulings on the classification of low fat butter substitutes. CBP is also proposing to revoke any treatment it has previously accorded to substantially identical transactions.

CBP states that any party who has received a contrary written ruling or decision on the merchandise that is subject to the proposed ruling revocations, or any party involved with a substantially identical transaction, should advise CBP by March 9, 2007, the date that written comments on the proposed rulings are due. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in this notice.

In addition, CBP states that this notice covers any rulings on the subject merchandise that may exist but have not been specifically identified.

Low fat butter substitutes. The merchandise described in NYB80051 is 51-53 percent water, 39-41 percent butterfat, 4.5 percent milk proteins, 2 percent modified starch, 0.6 percent emulsifier (monodiglyceride), 0.3 percent lactic acid, 0.2 percent salt, 0.1 percent potassium sorbate, and 0.002 percent beta carotene from Belgium. The product is packed in 227 gram cups. The merchandise described in NYB85495 is 48-51 percent water, 42-44 percent butterfat (milkfat), 4-5 percent milk proteins, 2 percent lactose, 0.6 percent emulsifiers, 0.1 percent salt, and 0.001 percent flavoring from Canada. The product is packed in 40 pound boxes with polyliners.

CBP is proposing to issue HQ 968239 and HQ 968240 in order to revoke NY B80051 and NY B85495, respectively, and reclassify the subject merchandise under 0405.20.6000 (10%, subject to tariff rate quota) as "other dairy spreads", rather than under 0405.20.4000 (13.1 cents/kg), as "butter substitutes containing less than 45% by weight of butterfat".

In its proposed rulings, CBP has referenced two court cases (see bulletin for details) which address the issue of a "substitute". A substitute is deemed to be an article which not only performs the functions of the original, but also possesses the qualities of the original. Because of its higher water content and lower milk fat content, the subject product will not perform in the same manner as butter if used for either frying or baking. It can be used as a spread on bread or toast where the ingredient differences will not have a significant impact. CBP is now of the view that the product is not a butter substitute but rather a low fat alternative to butter with its own identity - distinct from that of butter - and is classified as "other" dairy spreads.

proposed: 0405.20.6000, 10% (subject to tariff rate quota); current: 0405.20.4000, 13.1 cents per kg.

February 7, 2007 CBP Bulletin (Vol. 41, No. 7) available at http://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2007/