July 9, 2008 CBP Bulletin Notice on Classification of Certain Food Preparations Containing Cocoa

Proposed revocation of rulings; proposed revocation of treatment. CBP is proposing to revoke five rulings on the classification of certain food preparations containing cocoa, and to revoke or modify any other ruling not specifically identified to reflect the proper classification of the subject merchandise according to the analysis in the proposed rulings. 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 revocations, or any party involved with a substantially identical transaction, should advise CBP by August 8, 2008, 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.

Preparations containing cocoa. The merchandise is described as "liquid chocolate for enrobing cakes and pastries" (NY N005039), "bittersweet chocolate for enrobing food" (NY N05523), "chocolate bars wrapped in foil" (NY N005972 and NY N005974), and "milk chocolate coating product" ready for consumption and intended to use in coating desserts (NY N006098).

CBP is proposing to issue HQ H008517, HQ H008511, HQ H008518, and HQ H008515, in order to revoke NY N005039, NY N005523, NY N005972, NY N005974 and NY N006098 and reclassify the preparations containing cocoa. These proposed rulings are corrections based on Explanatory Notes, HTS text and chapter notes, and prior CBP rulings.

I. Liquid Chocolate for Enrobing Cakes, Pastries

CBP is proposing to issue HQ H008517 in order to revoke NY N005039 and reclassify the liquid chocolate, which is shipped in bulk in tanker trucks, under HTS 1806.20.9900 as "Chocolate and other food preparations containing cocoa: 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: Other: Other: Other: Other: Other" rather than under 1806.20.5000 as "Chocolate and other food preparations containing cocoa: 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: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: Other: Other."

CBP proposes this change as a correction based on HTS chapter notes (Additional U.S. Note 3 to Chapter 17) and prior rulings. The liquid chocolate at issue contains 63.70 percent sugar, 25.80 percent cocoa liquor, 9.8 percent cocoa butter, 0.30 percent soya lecithin, 0.20 percent salt hydrade, and 0.20 percent admul emulsifier.

This composition precludes it from being classified in 1806.20.5000 as it is over 60% sugar. In order to be classified under subheading 1806.20.9500 or 1806.20.9800, the liquid chocolate would have to contain "over 10 percent by dry weight of sugar described in additional U.S. note 3 to chapter 17." Although the liquid chocolate does contain over 10 percent by dry weight of sugar, it is excluded by Additional U.S. Note 3 to Chapter 17, which excludes "cake decorations and similar products to be used in the same condition as imported without any further processing other than the direct application to individual pastries or confections" Therefore CBP now proposes that the liquid chocolate should be classified under HTS 1806.20.9900. Furthermore, CBP has previously classified chocolate products containing over 10 percent by dry weight of sugars and used for enrobing desserts under HTS 1806.20.9900. (See Bulletin for rulings.)

II. Bittersweet Chocolate for Enrobing Food

CBP is proposing to issue HQ H008511 in order to revoke NY N005523 and reclassify the bittersweet chocolate, which is shipped in 5 kilogram blocks, under 1806.20.9900 as "Chocolate and other food preparations containing cocoa: 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: Other: Other: Other: Other: Other" rather than in 1806.20.95 as "Chocolate and other food preparations containing cocoa: 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: Articles containing over 10 percent by dry weight of sugar described in additional U.S. Note 8 to Chapter 17 and entered pursuant to its provisions" (or 1806.20.98 depending on whether quota levels were reached at time of entry).

CBP proposes this change as a correction. The bittersweet chocolate from France is stated to contain 44.0 percent cocoa paste, 28.5 percent sugar, 11.5 percent cocoa butter, 9.0 percent inulin, 6.5 percent corn dextrin, 1.0 percent soya lecithin and 0.5 percent vanillin. Although the bittersweet chocolate does contain over 10 percent by dry weight of sugar, the product is intended for use in "enrobing" desserts, and therefore, falls under the same exception for cake decorations as the liquid chocolate above.

III. Chocolate Bars Wrapped in Foil

CBP proposes to issue HQ H008518 in order to revoke NY N005972 and NY N005974 and reclassify the flat chocolate bars wrapped in foil and ready for consumption "as is", which are shipped in 12 kilogram cases, under 1806.32.3000 as "Chocolate and other food preparations containing cocoa: Other, in blocks, slabs or bars: Not filled: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: Other" rather than under 1806.32.0600 as "Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: Containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection): Containing over 5.5 percent by weight of butterfat, Containing less than 21 percent by weight of milk solids."

CBP proposes this change as a correction largely based on the language of subheading 1806.32.0600 which excludes "articles for consumption at retail as candy or confection."

IV. Milk Chocolate Coating Product

CBP proposes to issue HQ H008515 in order to revoke NY N006098 and reclassify the milk chocolate coating product, which is shipped in 10 pound slabs, under 1806.20.20 as "Chocolate and other food preparations containing cocoa: 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: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: In blocks or slabs weighing 4.5 kg or more each" rather than under 1806.20.3600 as "Chocolate and other food preparations containing cocoa: 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: Preparations consisting wholly of ground cocoa beans, with or without added cocoa fat, flavoring or emulsifying agents, and containing not more than 32 percent by weight of butterfat or other milk solids and not more than 60 percent by weight of sugar: Other: Containing butterfat or other milk solids (excluding articles for consumption at retail as candy or confection): Other: Containing less than 21 percent by weight of milk solids."

CBP proposes this change as a correction. The milk chocolate coating product is stated to contain 54.55 percent sugar, 18.85 percent cocoa butter, 13.40 percent chocolate liquor, 9.36 percent skim milk powder, 3.34 percent anhydrous milk fat, 0.48 percent soya lecithin and 0.01 percent vanillin. Total milk solids are 12.7 percent and total milk fat is 3.40 percent. The product is ready for consumption; it just needs to be melted prior to coating and is intended for use in coating cakes, pastries and confectionery.

CBP now proposes that the milk chocolate slabs meet the requirements of subheading 1806.20.20, because, at 10 pounds, they fit the stated weight requirement of a minimum of 4.5 kg (1 kg = 2.2 lbs.; 4.5 kg = 9.9 lbs.) of 1806.20 3600, and further, they are not described by the terms of 1806.20.3600. Therefore based on GRI 1, CBP proposes that the milk chocolate slabs are classified under subheading 1806.20.20.

I. Proposed: 1806.20.9900, 8.5%; current: 1806.20.5000, 4.3%

II. Proposed: 1806.20.9900, 8.5%; current: 1806.20.9500, 10% (or 1806.20.9800, 37.2c/kg 8.5% depending on status of quota)

III. Proposed: 1806.32.3000, 4.3%; current 1806.32.0600, 37.2c/kg 4.3% (quota)

IV. Proposed: 1806.20.20, duty-free; current: 1806.20.3600, 37.2c/kg 4.3% (quota)

July 9, 2008 CBP Bulletin (Vol. 42, No. 29) available at http://www.cbp.gov/xp/cgov/trade/legal/bulletins_decisions/bulletins_2008/