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HQ 086101

February 27, 1990

CLA-2:CO:R:C:G 086101 SER


TARIFF NO.: 2106.90.6097

Ms. Dana Sather
K & L Associates, Inc.
1710 Clavinia Ave.
Deerfield, IL 60015

RE: Peanut-flavored Chips

Dear Ms. Sather:

This is in reference to your request of November 27, 1989, for the tariff classification of peanut-flavored chips under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).


The product at issue will be used as an ingredient in Peanut Butter cookies. The ingredients and percentages of those ingredients of the peanut-flavored chips is as follows:

1. Sugar- 34.5 percent
2. Partially Hydrogenated Palm Kernel oil- 29.5 percent 3. Roasted Peanut Meal- 27.5 percent
4. Whole Milk- 3 percent
5. Non-fat Milk Powder- 3 percent
6. Artificial Flavor
7. Salt
8. Artificial color
9. Yellow dye # 5
10. Yellow dye # 6
11. Blue dye # 2


What is the proper classification of the peanut-flavored chips under the HTSUSA?


Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

One possible classification is Heading 1704, HTSUS, which provides for sugar confectionery (including white chocolate), not containing cocoa. Whether an article was "confectionery" was the focus of Leaf Brands, Inc. v. United States, C.D. 4409, 70 Cust. Ct. 66 (1973). That case was decided under the Tariff Schedules of the United States (TSUS), but is instructive in the classification of confections in the HTSUSA. Leaf Brands provided that whether an article is a confectionery is determined by its chief use, not by the fact that it is edible, which would include numerous articles. Use as a confection, said the Leaf court, may be evidenced by its manner of sale and its character and design. The Court utilizes the standard, and cites several cases which hold, in part, that confectionery articles are usually sold in confectionery outlets. The Court considered favorably the fact that the product at issue was distributed through "candy brokers." In summary, Customs position is that confections means a product, as it is marketed, and in its condition as imported, must be ready for immediate consumption at retail as a confectionery, and is not, for example, merchandise which will be used as an ingredient in the baking industry. The product at issue is not generally marketed in confectionery outlets, is not considered a confection, and is, therefore, precluded from classification in Heading 1704, HTSUS.

Another possible Heading is 1202, HTSUS, which provides for ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken. In examining the Explanatory Notes, which constitute the official interpretation of the tariff at the international level, the product at issue is clearly beyond the scope of this Heading. The product at issue is a processed article with numerous ingredients added, and peanuts are not the primary ingredient. Classification in this Heading is precluded.

Subheading 2008.11.0020, HTSUSA, provides for peanuts: peanut butter. The product at issue is clearly not peanut butter. Customs has consistently held that a peanut butter product consists primarily of peanuts and peanut meal and only minimal additives, such as sugar or dextrose. Again, the product at issue is primarily comprised of sugar, and thus, is precluded from classification in this subheading.

Absent a more specific provision, the merchandise at issue would be properly classified in Heading 2106, HTSUS, which provides for food preparations not elsewhere specified or included. Under the former tariff law, item 958.18, TSUS, applied a quota to products of this type which were classified in item 183.05, TSUS, which were not retail packaged for consumers and contained over 10 percent by weight of sugar. The exceptions to this quota, as authorized by item 3 (a) of Presidential Proclamation 5340, are cake decorations and similar products which are used as in the same condition as imported without further processing other than the direct application to individual pastries or confections. The exceptions to the quota were broadened to include confectioner specialty items: articles which are not imported principally for extraction of their sugar content, and which do not compete as a substitute for domestic sugar. The product at issue would be included within this exception, and thus, there are no applicable quota restrictions.


The product at issue, peanut-flavored chips, is properly classified in subheading 2106.90.6097, HTSUSA, which provides for food preparations not elsewhere specified: other. The rate of duty is 10 percent ad valorem. This product is not subject to quota restrictions.


John Durant, Director
Commercial Rulings Division

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