NCS/ARS/CL/10209

You have applied for the tariff classification of Citrus Flavouring Liquid" (IFF Code: SC590686), a mixture used as a raw material in the food and drink industries. In your application, you stated that the product is supplied in 500 cans of 25 liters each, with a total net weight of 10,000 kg, and is used as a flavouring agent in beverage manufacturing.  You also state that the product is not intended for direct consumption as a beverage.

PRODUCT ANALYSIS
According to the MSDS and supporting documents you attached, this mixture is a pale-yellow liquid with a characteristic citrus odour and flavour, primarily composed of the following items:

1. Ethanol (≥90 – ≤100%). An industrial solvent typically produced by fermentation of sugars by yeast or via petrochemical processes (e.g., hydration of ethylene) and commonly used as a solvent in flavouring mixtures. (see explanatory notes to heading 2207).
2. Limonene (Cyclohexene, 1-methyl4-(1-methylethenyl)-, (4R)- (D-Limonene) (≥1 – <2.5%). A terpene fragrance compound (citrus note) extracted from citrus fruit peels (e.g., orange, lemon, lime) via cold-press or steam distillation. It is a naturally occurring class of monoterpenes which occur as a clear colorless liquid at room temperature. Limonene is the major component in the oil of citrus peels which has many uses, including as flavor and fragrance for beverages and cosmetics.
3. Linalool (1,6-Octadiene, 3-ol, 3,7-dimethyl (≥0.1 – <0.25%): It is a colorless oil classified as an acyclic monoterpenoid. It is a naturally occurring in many flowers and spice plants such as mint, basil, coriander, or citrus species, or synthesized chemically and used for its floral-citrus aroma in flavourings. 

While Limonene is a product of the essential oils of citrus fruits of heading 3301, Linalool is a product of other essential oils of 3301 including citrus.

The ethanol serves as an alcoholic solvent for the Limonene and Linalool compounds given that the end use of the concentrate is for the manufacture of an alcoholic beverage. 

Additionally, on request, you provided the team with a 500 ml sample (A) of the said flavouring. The physical profile of the sample was compared with that of a finished drink (B) which has been manufactured with the citrus flavouring liquid base produced by your company.  Through a physical analysis, the following was discovered:

• Sample A had a pale-yellow colour, with a very pungent citrus & gin aroma that immediately saturates the atmosphere once opened, lingering for a sustainable period of time, and a citrus lemon taste. The content of this sample is too concentrated for direct consumption as a beverage.
• Sample B, on the other hand, had a dark brown colour, with a cola citrus alcoholic aroma which does not saturate the atmosphere, with a bitter taste and a very mild hint of citrus-lemon flavour, in a concentration that can be consumed directly as a beverage. 

TARIFF ANALYSIS
Based on the physical analysis, composition, concentration and the use of the product as outlined in the preceding paragraphs, two headings merit consideration for the classification of the citrus flavouring liquid concentrate. They are tariff headings 2106 and 3302.

a. HS 2106 “Food preparations not elsewhere specified or included”:   Explanatory Note (EN) 7 to heading 2106 excludes Beverage base concentrates made from essential oils of heading 3301 from classification in this heading.

b. HS 3302 “Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages”.:   Note 2 to Chapter 33, states that, “The expression “odoriferous substances” in heading 33.02 refers only to the substances of heading 33.01 (essential oils, resinoids, etc.), to odoriferous constituents isolated from those substances or to synthetic aromatics.”

The Explanatory Notes to heading 3302 provides that this heading covers inter alia "Mixtures, whether or not combined with a diluent or carrier or containing alcohol, of products of other Chapters (e.g., spices) with one or more odoriferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics), provided these substances form the basis of the mixture.

 It further  states that  these products are of a kind used as raw materials in the perfumery, food or drink industries (e.g., in confectionery, food or drink flavourings) or in other industries (e.g., soap-making), which are used primarily to impart a fragrance and secondarily to give a flavour to beverages, generally containing a relatively small quantity of odoriferous substances which characterize a particular beverage.”  

 Furthermore, EN to 3302 excludes both finished beverages ready for consumption of chapter 22 and compound alcoholic and non-alcoholic preparations of a kind used for the manufacture of beverages, with a basis of substances other than odoriferous substances as described in Note 2 to this Chapter (heading 21.06, unless they are more specifically provided for elsewhere in the Nomenclature).

TARIFF CLASSIFICATION
On the strength of the empirical analysis in the foregoing paragraphs as well as the provisions of the legal notes and explanatory notes to the HS,  the Citrus Flavouring Liquid which is made up of  mixtures of odoriferous substances  of heading 3301 (Limonene  and Linalool) in small quantities presented in a solvent of ethanol,  is effectively classified under HS code 3302.10.00.00 - “Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used in the food or drink industries”, at 10% duty rate and 0% VAT in line with the ECOWAS CET 2022 - 2027.
 

LEGAL JUSTIFICATION
GIR 1 and 6