The U.S. Court of International Trade today denied cross motions for summary judgment in a case concerning the proper tariff classification of gum base used in manufacturing chewing gum.
The case is: Mondelez Global LLC v. United States, Slip Op. 17-92 (CIT July 25, 2017). Read the trade court’s opinion [PDF 520 KB]
The U.S. government asserted that the imported gum base was a “food preparation” under heading 2106 of the Harmonized Tariff Schedule of the United States (HTSUS) because chewing gum is a “food,” a “preparation” is a substance specially prepared for a particular application, and gum base is used exclusively for manufacturing chewing gum (itself, a food).
The importer countered that heading 2106 covers only products that are themselves “consumed in food”—not simply used in food, and that gum base is not “consumed in food.” Instead, the importer asserted the claimed classification would be under heading 3824 (which covers chemical products and preparations of chemicals).
The trade court explained that a product is not classifiable under heading 2106 merely because it is specially prepared for use in food; instead, the preparation must itself be food. In rejecting this assertion of the government, the court turned to consider whether gum base had any nutritive value, and stated that while the importer had submitted evidence that gum base’s nutritive ingredients are not released from the gum base during the chewing of chewing gum, summary judgment was not appropriate on this issue at this time.
For more information, contact a professional with KPMG’s Trade & Customs practice:
Douglas Zuvich | +1 (312) 665-1022 | email@example.com
Andrew Siciliano | +1 (631) 425-6057 | firstname.lastname@example.org
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.