HQ 084408: Coffee Extract processed in West Germany

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                      HQ 084408

                                    August 8,1989


          CLA-2 CO:R:C:G 084408 JGH

          CATEGORY: Classification

          TARIFF NO.: 2101.10.2040; 9903.23.20

          Leonard M. Zuckerman
          L.M. Zuckerman & Co., Inc.
          50 Broadway
          New York, N.Y.

          RE: Coffee Extract processed in West Germany

          Dear Mr. Zuckerman:

                Your letter of April 7,1989, concerns the processing of
          coffee extract in West Germany.

          FACTS:

                Coffee extract from Brazil, Mexico, Paraguay, "or from
          various other non-European sources" is sent to West Germany,
          where it is dissolved in water and redried by freeze drying.
          The freeze-dried coffee is then exported to the United States.

          ISSUE:

                Whether coffee extract processed in West Germany becomes a
          product of West Germany, and therefore subject to the increased
          duties pursuant to Presidential Proclamation No. 5759.

          LAW AND ANALYSIS:

                Presidential Proclamation No. 5759 assessed a duty of 100
          percent ad valorem on certain products of countries of the
          European Community (EC).  Subheading 9903.23.20, Harmonized
          Tariff Schedule of the United States (HTSUS), imposes such a duty
          on soluble or instant coffee which is a product of the EC.

                Coffee extract from Brazil, Mexico, or Paraguay is sent to
          West Germany, where it is dissolved in water and then freeze
          dried.

















                                         -2-


                For a product such as this to be considered a product of
          West Germany, it must be substantially transformed by sufficient
          processing into a new and different article of commerce.  While
          changing coffee extract into a freeze dried coffee changes the
          form of the coffee, it is a change from an intermediate product
          of a finished one; the coffee extract being a material in
          process, advancing toward the finished product.  Thus, the
          processing undergone in West Germany is not, in and of itself,
          considered sufficient to transform the extract into a new and
          different article of commerce.

          HOLDING:

                Coffee extract, a product of Brazil, Mexico, or Paraguay,
          which is sent to West Germany to be processed into freeze-dried
          coffee, is not transformed into a product of the EC, and, as a
          result, is not subject to the 100 percent rate of duty assessed
          under subheading 9903.23.20, HTSUS.

                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division



































          6 cc: N.Y., Seaport
          Hurley library
          084408