Receipt of Domestic Interested Party Petition Concerning the Tariff Classification of Dried Onion Products, 44030-44031 [2021-17142]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection

[Federal Register Volume 86, Number 152 (Wednesday, August 11, 2021)]
[Notices]
[Pages 44030-44031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17142]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

[Docket No. USCBP-2021-0028]


Receipt of Domestic Interested Party Petition Concerning the 
Tariff Classification of Dried Onion Products

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of receipt of domestic interested party petition; 
solicitation of comments.

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SUMMARY: U.S. Customs and Border Protection (CBP) has received a 
petition submitted on behalf of a domestic interested party requesting 
the reclassification, under the Harmonized Tariff Schedule of the 
United States (HTSUS), of certain dried onion products. CBP currently 
classifies the subject dried onion products under subheading 
2005.99.20, HTSUS, as onions prepared or preserved otherwise than by 
vinegar or acetic acid. Petitioner contends that the proper 
classification for the subject dried onion products is under subheading 
0712.20.20, HTSUS, as dried onion powder not further prepared. This 
document invites comments with regard to the correctness of the current 
classification.

DATES: Comments must be received on or before October 12, 2021.

ADDRESSES: You may submit comments, identified by docket number, by the 
first method listed below:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2021-0028.
     Mail: Due to COVID-19-related restrictions, CBP has 
temporarily suspended its ability to receive public comments by mail.
    Instructions: All submissions received must include the agency name 
and docket number for this notice of domestic interested party petition 
concerning the tariff classification of dried onion products. All 
comments received will be posted without change to https://www.regulations.gov, including any personal information provided.
    Docket: For access to the docket to read background documents, 
exhibits, or comments received, go to https://www.regulations.gov. Due 
to the relevant COVID-19-related restrictions, CBP has temporarily 
suspended on-site public inspection of public comments.

FOR FURTHER INFORMATION CONTACT: Tanya Secor, Food, Textiles and 
Marking Branch, Regulations and Rulings, Office of Trade, U.S. Customs 
and Border Protection, at (202) 325-0062 or by email at 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    A petition has been filed under section 516 of the Tariff Act of 
1930, as amended (19 U.S.C. 1516), on behalf of Olam West Coast Inc. 
(Petitioner or Olam), which is an agri-business and supplier of food, 
ingredients, and raw materials, based in Fresno, California. Olam 
manages a wide range of production, processing, and supply of 
agricultural products in twelve states, with a majority of its 
operations in California. Olam's largest onion and garlic plant is in 
Gilroy, California. Olam meets all of the requirements of a domestic 
interested party set forth in 19 U.S.C. 1516(a)(2) and section 175.3(a) 
in title 19 of the Code of Federal Regulations (19 CFR 175.3(a)).
    In New York Ruling Letter (NY) N265994 (July 9, 2015), NY N261449 
(February 20, 2015), NY N257752 (October 24, 2014), and NY M86441 
(October 13, 2006), CBP classified various mixtures of onion powder and 
salt or other ingredients as prepared or preserved onions in subheading 
2005.99.20 of the Harmonized Tariff Schedule of the United States 
(HTSUS), which provides for ``Other vegetables prepared or preserved 
otherwise than by vinegar or acetic acid, not frozen, other than 
products of heading 2006: Other vegetables and mixtures of vegetables: 
Other: Onions.'' Petitioner contends that the proper classification for 
the onion powder mixtures is dried onion powder in subheading 
0712.20.20, HTSUS, which provides for ``Dried vegetables, whole, cut, 
sliced, broken or in powder, but not further prepared: Onions: Powder 
or flour.''

Applicable Legal Principles

    Classification under the HTSUS is determined in accordance with the 
General Rules of Interpretation (GRIs) and, in the absence of special 
language or context which otherwise requires, by the Additional U.S. 
Rules of Interpretation (ARIs). GRI 1 provides that the classification 
of goods shall be determined according to the terms of the headings 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, GRIs 2 through 6 may be 
applied in order. GRI 3(b) applies to mixtures, which are prima facie, 
classifiable under two or more headings and which cannot be classified 
by reference to GRI 3(a). Pursuant to GRI 3(b), mixtures shall be 
classified as if they consisted of the material or component which 
gives them their essential character.
    Note 3 to Chapter 7, HTSUS, provides that heading 0712 covers all 
dried vegetables of the kinds falling in headings 0701 to 0711, 
excluding certain vegetables but including onions. Note 1(a) to Chapter 
20, HTSUS, provides that this chapter does not cover vegetables, fruit 
or nuts, prepared or preserved by the processes specified in Chapter 7, 
8, or 11. Conversely, Note 3 to Chapter 20, HTSUS, provides in 
pertinent part that heading 2005 covers, as the case may be, only those 
products of Chapter 7, which have been prepared or preserved by 
processes other than those referred to in Note 1(a).
    The Explanatory Notes (ENs) to the Harmonized Commodity Description 
and Coding System represent the official interpretation of the tariff 
at the international level. While neither legally binding nor 
dispositive, the ENs provide a commentary on the scope of each heading 
of the HTSUS and are generally indicative of the proper interpretation 
of

[[Page 44031]]

these headings. See Treasury Decision (T.D.) 89-80, 54 FR 35127, 35128 
(August 23, 1989).
    The General EN to Chapter 7, HTSUS, provides, in pertinent part, 
that this Chapter covers vegetables, including the products listed in 
Note 2 to the Chapter, whether fresh, chilled, frozen (uncooked or 
cooked by steaming or boiling in water), provisionally preserved or 
dried (including dehydrated, evaporated or freeze-dried), and that some 
of these products when dried and powdered are sometimes used as 
flavoring materials but nevertheless remain classified in heading 
07.12. The EN further states that vegetables prepared or preserved by 
any process not provided for in Chapter 7 fall in Chapter 20. The EN 
for heading 07.12 states, in pertinent part, that the heading covers 
vegetables of headings 07.01 to 07.11 which have been dried (including 
dehydrated, evaporated or freeze-dried) i.e., with their natural water 
content removed by various processes. The EN further provides that 
heading 0712, HTSUS, covers dried vegetables, broken or powdered, such 
as asparagus, cauliflower, parsley, chervil, onion, garlic, celery, 
generally used either as flavouring materials or in the preparation of 
soups. The EN for heading 20.05 states, in pertinent part, that the 
heading covers products (other than vegetables prepared or preserved by 
vinegar or acetic acid of heading 20.01, frozen vegetables of heading 
20.04 and vegetables preserved by sugar of heading 20.06) that have 
been prepared or preserved by processes not provided for in Chapter 7 
or 11.

Elaboration of the Petitioner's Views

    Petitioner contends that the proper classification for the subject 
dried onion products is subheading 0712.20.20, HTSUS, which provides 
for ``Dried vegetables, whole, cut, sliced, broken or in powder, but 
not further prepared: Onions: Powder or flour.'' Petitioner contends 
that the subject onion products are (1) preserved by drying and, 
therefore, excluded from Chapter 20, HTSUS; (2) neither ``preserved'' 
nor ``prepared'' in a manner covered by Chapter 20, HTSUS; and (3) not 
``prepared'' or ``preserved'' under the ``common and commercial 
meaning'' of those terms. Specifically, Petitioner argues that the 
subject dried onion products are neither prepared nor preserved because 
the small quantities of salt or preservatives do not create a permanent 
change to the onion powder. In support of its argument, Petitioner 
relies on Headquarters Ruling Letter (HQ) H243645 (September 30, 2015) 
wherein CBP classified dried sliced and diced potatoes with added 
sodium bisulfate under subheading 0712.90.30, HTSUS, as dried potatoes 
not further prepared. In HQ H243645, CBP determined that sodium 
bisulfite simply preserved the potatoes' freshness, color and flavor, 
and did not further prepare the product.
    Petitioner asserts that to the extent the products are mixtures of 
multiple ingredients, the essential character of these products remains 
onion powder and therefore they should be classified under 0712.20.20, 
HTSUS, pursuant to GRI 3(b). Petitioner also argues that classifying 
such products as ``prepared'' or ``preserved'' is contrary to the 
intention to protect domestic production of dried onion as indicated by 
the high tariff rate applicable to dried onion and dried onion powder.

Analysis Used by CBP in Prior Rulings

    Subheading 2005.99.20, HTSUS, provides for ``Other vegetables 
prepared or preserved otherwise than by vinegar or acetic acid, not 
frozen, other than products of heading 2006: Other vegetables and 
mixtures of vegetables: Other: Onions.'' The EN for heading 07.12 
provides guidance that the heading covers dried vegetables in powder 
form, including onion, not otherwise prepared. If a dried vegetable 
product is prepared beyond the scope of heading 0712, HTSUS, it will be 
precluded from classification in that heading and classifiable in 
heading 2005, HTSUS.
    In the rulings at issue, the dried onion products are comprised of 
dried onion powder and varying additional ingredients. Specifically, NY 
N265994 classified agglomerated onion powder consisting of 94.5% dried 
onion powder, 5% water, and 0.5% of maltodextrin, silicon dioxide, and 
potassium sorbate combined. NY N261449 classified onion and salt 
powders blended in five different formulations: 91% onion powder and 9% 
salt; 93% onion powder and 7% salt; 95% onion powder and 5% salt; 97% 
onion powder and 3% salt; and 99% onion powder and 1% salt. NY N257752 
classified five products, two of which were comprised of onion powder 
and salt. The first consisted of 80% onion powder and 20% salt and the 
second consisted of 90% onion powder and 10% salt. Finally, NY M86441 
classified agglomerated onion powder consisting of 88.5% dehydrated 
onion powder, 5% water, 4% corn starch, 1% Arabic gum, 1% silicon 
dioxide, and 0.5% citric acid. CBP determined that the addition of salt 
and other ingredients, regardless of the proportions, further prepared 
the onion powder beyond the scope of heading 0712, HTSUS. Thus, these 
dried onion products were classified pursuant to GRI 1 in subheading 
2005.99.20, HTSUS, as onions prepared or preserved otherwise than by 
vinegar or acetic acid.

Comments

    Pursuant to section 175.21, CBP Regulations (19 CFR 175.21), before 
making a determination on this matter, CBP invites written comments on 
the petition from interested parties.
    The domestic interested party petition concerning the tariff 
classification of certain dried onion products, as well as all comments 
received in response to this notice, will be available for public 
inspection on the docket at www.regulations.gov.

Authority

     This notice is published in accordance with 19 U.S.C. 1516 and 
section 175.21 of the CBP Regulations (19 CFR 175.21).
    Troy A. Miller, the Acting Commissioner, having reviewed and 
approved this document, is delegating the authority to electronically 
sign this document to Robert F. Altneu, who is the Director of the 
Regulations and Disclosure Law Division for CBP, for purposes of 
publication in the Federal Register.

    Dated: August 6, 2021.
Robert F. Altneu,
Director, Regulations & Disclosure Law Division, Regulations & Rulings, 
Office of Trade, U.S. Customs and Border Protection.
[FR Doc. 2021-17142 Filed 8-10-21; 8:45 am]
BILLING CODE 9111-14-P