HQ 950434: Piloncillo brown sugar cane in 1701; Cane or beet sugar and chemically pure sucrose, in solid form; Agricultural import fees in 9904; Additional U.S. Note 3 to Chapter 17; Import Restrictions; GSP Eligibility

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 950434

                         April 27, 1992

CLA-2 CO:R:C:F 950434 LPF

CATEGORY: Classification

TARIFF NO.: 1701.11.0125, 1701.11.0325, 9904.40.20

Mr. Froylan Sanchez
Operations Manager
Ingro, Inc.
1048 E. Burgrove St.
Carson, CA 90746

RE:  Piloncillo brown sugar cane in 1701; Cane or beet sugar and
     chemically pure sucrose, in solid form; Agricultural import
     fees in 9904; Additional U.S. Note 3 to Chapter 17; Import
     Restrictions; GSP Eligibility

Dear Mr. Sanchez:

     This is in response to your letter of September 24, 1991,
submitted on behalf of Ingro, Inc.  You request, in regard to
Piloncillo brown sugar cane, the proper classification, under the
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA), applicable import restrictions and eligibility for
duty-free treatment, under the Generalized System of Preferences
(GSP) (19 U.S.C. 2461-2466).

FACTS:

     According to your letter of December 18, 1991, the product
is produced when brown sugar cane molasses and water are cooked
at 300 degrees, poured into molds and cooled for three minutes.
The molds are opened and the product is cooled for an additional
45 minutes.  The merchandise is packed in 25, 50 and 100 pound
bags or boxes.

     The Customs laboratory provides that the brown, truncated,
cone-shaped piece of solid sugar cane has a sucrose content of
85.52 percent by weight, that is, 85.52 international sugar
degrees.  The laboratory indicates that the product is an
unpurified sugar cane juice that has been boiled down to a solid
state.

     You explained by telephonic conversation on February 4,
1992, that the ingredients which compose the Piloncillo are from
Mexico and the entire production process takes place in Mexico.
In addition, you stated that you will import the product in its
solid state without any further refining.



                               -2-

ISSUE:

     Whether the Piloncillo is classifiable in heading 1701 as
cane or beet sugar and chemically pure sucrose, in solid form, or
in heading 1703 as molasses resulting from the extraction or
refining of sugar, and whether it is subject to restrictions for
importation and is eligible for duty-free treatment under the
GSP.

LAW AND ANALYSIS:

Classification under the HTSUSA

     The General Rules of Interpretation (GRI's) taken in their
appropriate order provide a framework for classification of
merchandise under the HTSUSA.  The majority of imported goods are
classified by application of GRI 1, that is, according to the
terms of the headings of the tariff schedule and any relative
section or chapter notes.  The Explanatory Notes (EN's) to the
Harmonized Commodity Description and Coding System, which
represent the official interpretation of the tariff at the
international level, facilitate classification under the HTSUSA
by offering guidance in understanding the scope of the headings
and GRI's.

     Heading 1701 provides for cane or beet sugar and chemically
pure sucrose, in solid form, while heading 1703 provides for
molasses resulting from the extraction or refining of sugar.
The EN's to 1701 provide, in pertinent part:

          Cane sugar is derived from the juices of the sugar cane
          stalk.  Beet sugar is derived from the juices obtained
          by extraction from the root of the sugar beet.

          Raw or crude cane or beet sugars occur in the form of
          brown crystals, the colour being due to the presence of
          impurities.  Their sucrose content by weight, in the
          dry state, corresponds to a polarimeter reading of less
          than 99.5 degrees....  They are generally destined for
          processing into refined sugar products.  Raw sugar may,
          however, be of such a high degree of purity that it is
          suitable for human consumption without refining.

The EN's to 1703 provide, in pertinent part:

          Molasses of this heading is obtained only as a result
          of the extraction or refining of sugar.  It is most
          commonly obtained as a normal by-product resulting from
          the extraction or refining of beet or cane sugar or
          from the production of fructose from maize (corn).


                               -3-


     The Customs laboratory analysis, in considering the
inquirer's method of production, revealed that the process
involves boiling down unpurified sugar cane juice to a solid
state.  The Piloncillo is not a by-product from the extraction or
refining of the cane sugar and, thus, is classifiable in heading
1701.

    The product's sucrose content by weight, 85.52 international
sugar degrees, qualifies the Piloncillo as raw sugar.  See
Subheading Note 1 and Additional U.S. Note 1 to Chapter 17,
HTSUSA, Sugar and Sugar Confectionery.  In addition, since no
flavoring or coloring matter is added to the product, it is
classifiable, at the six digit level, in subheading 1701.11.

     Insofar as the product is described in, and entered pursuant
to, Additional U.S. Note 3(a) and 3(b) to Chapter 17 (Notes 3(a)
and 3(b)) and is not further refined or improved in quality, it
is classifiable in subheading 1701.11.0125.  If the product is
not entered pursuant to Notes 3(a) and 3(b), and is not further
refined or improved in quality, it is classifiable in subheading
1701.11.0325.

     Since neither title II of the Sugar Act of 1948, nor
substantially equivalent legislation is presently in effect,
the product remains subject to the currently applicable HTSUSA
duty rates.  See Additional U.S. Note 2 to Chapter 17.

Importation Restrictions

     Certain requirements must be met in order for the product to
be entered pursuant to Notes 3(a) and 3(b) and thus be classified
in subheading 1701.11.0125.

     Note 3(a) provides, in pertinent part, that the total amount
of sugar entered under subheading 1701.11.01, shall not exceed,
in the aggregate, an amount established by the Secretary of
Agriculture (Secretary).  This total amount consists of (1) a
base quota amount, (2) a quota adjustment amount and (3) an
amount reserved for the importation of specialty sugars.
Modifications of such quantitative limitations and authorization
to charge sugar entering the U.S. to a previous or subsequent
quota period are subject to the Secretary's approval.

                              -4-


     Note 3(b) explains, in pertinent part, that the base quota
amount of sugar, imported from Mexico, and classifiable in
subheading 1701.11.01, is allocated to the "Other specified
countries and areas" category.  This category designation permits
0.3 percent of the total base quota amount for certain sugars,
syrups and molasses to be imported from the countries, including
Mexico, falling under this category.  However, the United States
Trade Representative (USTR) may modify or suspend such amounts
and may provide for minimum quota amounts to provide reasonable
access to the U.S. for imports from the "Other specified
countries and area" category.  The USTR presently requires that
certificates of eligibility accompany such imported sugar.

Eligibility for Duty-Free Treatment under the GSP

     Under the GSP, eligible articles which are the growth,
product or manufacture of a designated beneficiary developing
country (BDC) and which are imported directly into the customs
territory of the U.S. from a BDC may receive duty-free treatment
if the sum of 1) the cost or value of materials produced in the
BDC, plus 2) the direct costs of the processing operation in the
BDC, is equivalent to at least 35% of the appraised value of the
article at the time of entry.  See 19 U.S.C. 2463(b).

     Mexico is a BDC.  See General Note 3(c)(ii)(A), HTSUSA.
Since it appears the Piloncillo is completely the growth, product
and manufacture of Mexico and will be imported directly into the
U.S., if it is classifiable in 1701.11.0125 as discussed above,
it will be eligible for duty-free treatment.  However, if the
product is classifiable in 1701.11.0325 it will not be GSP
eligible.

HOLDING:

     Piloncillo, entered pursuant to Notes 3(a) and 3(b), is
classifiable in subheading 1701.11.0125 as "Cane or beet sugar
and chemically pure sucrose, in solid form: Raw sugar not
containing added flavoring or coloring matter: Cane sugar:
Described in paragraphs (a) and (b) of additional U.S. note 3 to
chapter 17 and entered pursuant to its provisions, Not to be
further refined or improved in quality."  Although the special
column one rate of duty provides that the product is duty free if
it qualifies for tariff preferences under the GSP, subheading
9904.40.20 provides that the product carries a supplemental
agricultural import fee of 2.2 cents per kilogram, but not in
excess of 50 percent.


                               -5-

     Piloncillo, not entered pursuant to Notes 3(a) and 3(b), is
classifiable in subheading 1701.11.0325 as "Cane or beet sugar
and chemically pure sucrose, in solid form: Raw sugar not
containing added flavoring or coloring matter: Cane sugar: Not to
be further refined or improved in quality."  The general column
one rate of duty is 37.386 cents per kilogram less 0.529 cent per
kilogram for each degree under 100 degrees (and fractions of a
degree in proportion) but not less than 24.161 cents.  In
addition, subheading 9904.40.20 provides that the product carries
a supplemental agricultural import fee of 2.2 cents per kilogram,
but not in excess of 50 percent.

     In order to determine which, if any, quantitative
limitations or regulations apply when importing your product, we
suggest you contact:

          Foreign Agricultural Service
          U.S. Dept. of Agriculture-Room 5531
          Import Policies & Trade Analysis Division
          Washington, D.C. 20250-1000
          (202) 720-5676


                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division