The Court of International Trade ruled May 2 that fish oil ethyl ester concentrates are properly classified as other extracts of fish under HTSUS 1603.00.90 (duty-free). In so doing the court rejected U.S. Customs and Border Protection’s initial classification of these items as fatty substances of animal origin under HTSUS 3824.90.40 (4.6 percent duty) and its later contention that they are other food preparations under HTSUS 2106.90.99 (6.4 percent duty).
The imported goods consist of semi-synthetic fish oil ethyl ester concentrates rich in omega-3 fatty acids that include polyunsaturated omega-3 fatty acids known as eicosapentaenoic acid and docasahexaenoic acid. Crude fish oil, which consists predominantly of triglycerides, is produced from ungutted whole fish by physically separating the oil from the fish solids. The plaintiff then processes this oil by chemically cleaving the fatty acids (including the EPA and DHA) from the triglyceride’s glycerol backbone, esterifying the fatty acids with ethanol to form semi-synthetic fatty acid ethyl esters, and concentrating the ethyl esters to create an end product with high concentrations of EPA and DHA ethyl esters. The plaintiff sells the finished product to companies that make human dietary supplements.
Reiterating that an extract must maintain the essence of the main source, the CIT held that the subject fish oil maintains the essence of fish because it consists almost entirely of substances found in the fish source, remains in liquid form, continues to bear some resemblance to the fish source in color, taste, and odor, and offers the same health benefits as the fish source. The CIT also said the subject fish oil is an extract of fish, not of fish oil, rejecting “the implied premise of the government’s argument” that classification under heading 1603 “requires that extracts of fish be those obtained directly from fish in the natural state, with no intermediate processing.”
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