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HQ 960607

July 31, 1998

CLA-2 RR:CR:GC 960607 ptl


TARIFF NO.: 2106.90.9998

Port Director
U.S. Customs Service
300 South Ferry Street
Terminal Island, CA 90731

RE: Protest 2702-97-100345, Encapsulated Ginseng Extract; HQs 084981, 086744, 953679, 085492.

Dear Port Director:

The following is our decision regarding protest 2702-97-100345 which concerns the classification of ginseng extract in encapsulated form under the Harmonized Tariff Schedule of the United States (HTSUS).


The merchandise is a product of England described by the names "Koregin" and "Sibergin." The articles are produced from ginseng roots. Korean grown roots in the case of "Koregin", and Siberian roots for "Sibergin". In England, the ginseng roots are crushed into powder and mixed with alcohol. The alcohol serves to extract the "active ginseng" from the powder and, after evaporation, results in a thick paste. Soybean oil, lecithin, and beeswax are then added to this paste. The resulting mixture is then packed into gelatin capsules. The invoice indicates the capsules are imported in bulk and in containers holding 30 capsules. The merchandise was entered on October 29, 1996, under subheading 1302.19.4020, HTSUS, as other vegetable saps and extracts ... ginseng. The articles were classified by Customs as other food preparations not elsewhere specified or included, in subheading 2106.90.9998, HTSUS. The importer, through counsel, claims that neither the addition of the extra ingredients nor the encapsulation preclude classification in heading 1302. The entry was liquidated on December 27, 1996, and this protest was timely filed on March 27, 1997.


What is the proper classification of encapsulated ginseng extract?


Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that virtually all 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. 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, the remaining GRIs may then be applied in order.

The headings under consideration are as follows:

1302 Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products: Vegetable saps and extracts:

1302.19 Other:
Ginseng; substances having anes- thetic, prophylactic or therapeutic properties:

1302.19.40 Other.

1302.19.4020 Ginseng.

2106 Food preparations not elsewhere specified or included:

2106.90 Other :
Other :
Other :
Other :
Other :

2106.90.9900 Other.

2106.90.9998 Other.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

Counsel for the importer contends that the merchandise should be classified in heading 1302, HTSUS, and cites, in support, the language of EN 13.02 which states, in part, "The saps and extracts classified here include: ... (7) Ginseng extract, obtained by water or alcohol extraction, whether or not put up for retail sale." Counsel's position is that the encapsulated ginseng is composed of ginseng extract obtained by alcohol extraction to which certain materials have been added to enable the product to be processed into capsules. Counsel asserts these additives do not alter the identity of the ginseng, but are merely used to facilitate the flow of the ginseng paste through the capsuling equipment.

Counsel concedes that the ENs state that "The vegetable saps and extracts of this heading [1302] are generally raw materials for various manufactured products. They are excluded from the heading when, because of the addition of other substances, they have the character of food preparations, medicaments, etc." (Emphasis in original). However, counsel contends that the tariff "anticipates that ginseng extracts are to be treated differently than other products which fall under the same chapter" because the ENs contain the statement about retail sale.

Customs does not disagree with counsel's position that ginseng, which has been put up for retail sale may be classified in heading 1302, HTSUS. However, in order to be classified in that heading, the product would still need to retain its character as a raw material. Customs has consistently held that, when mixed with other materials and offered for sale as a finished product to be used as a food supplement, ginseng extract is properly classified in heading 2106, HTSUS.

Several Customs rulings are cited to support counsel's position. Counsel attempts to distinguish the additives in HQ 084981, dated June 19, 1990, (honey, royal jelly, almond essence and other items), and HQ 086744, dated June 19, 1990, (water, royal jelly and honey), from those in protestant's product (soybean oil, lecithin and beeswax). In both of these rulings which classified products containing ginseng extract as food supplements in heading 2106, HTSUS, other extracts or ingredients had been added to the ginseng. However, in these rulings, it is not solely the nature of the additive upon which the classification was determined. Rather, it was the character of the resulting article. In these instances, the resulting article was a finished good which was to be marketed as a food supplement.

In HQ 953679, dated February 3, 1994, Customs noted that "[A]lthough the ENs to heading 2106 mention that many food supplements are often based on plant extracts containing added vitamins and sometimes minute quantities of iron compounds', such products do not have to contain vitamins and/or minerals to be considered food supplements; the very nature of these products - herb extracts mixed with other substances, even without the promotional literature, are considered food supplements. Essentially chapters 12 and 13 cover raw vegetable materials; products to be further processed. Here, in contrast, the extracts are encapsulated, usually with an added excipients such as natural cellulose, roots, or berries; and, what is apparent from the promotional literature, the intent is to have finished food products which are marketed as food supplements. Such products are classifiable in heading 2106." In HQ 085492, dated October 20, 1989, Customs ruled that the powdered root of Brazilian ginseng which was free of additives and imported in gelatin capsule form for use as a food supplement was classified in heading 2106, HTSUS.

The products here are capsules which contain ginseng extract, which has been obtained by alcohol extraction, to which soybean oil, beeswax and lecithin have been added. Customs believes that these encapsulated ginseng extracts are a manufactured, finished product intended for use as a food supplement and are classifiable in subheading 2106.90.9998, HTSUS, as food preparations not elsewhere specified or included: other: other: other: other: other: other: other.


Encapsulated ginseng extracts are classified in subheading 2106.90.9998, HTSUS.

The protest should be DENIED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, Revised Protest Directive, dated August 4, 1993, a copy of this decision attached to Customs Form 19, Notice of Action, should be provided by your office to the protestant no later than 60 days from the date of this decision and any reliquidations of entries in accordance with this decision must be accomplished prior thereto. Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make this decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.


John Durant, Director
Commercial Rulings Division

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