THE BOTTOM LINE
- Costly Classification: A specialized food thickener was hit with a 12.8% import duty after a Dutch court agreed with Customs that it was a “food preparation” (Chapter 21) rather than a duty-free “vegetable-derived binder” (Chapter 13).
- Whole Product Matters, Not Just One Ingredient: The court’s decision hinged on the product’s entire composition and intended use, not just its main advertised ingredient. The objective characteristics of the final product are decisive for customs classification.
- Additives Can Redefine Your Product: Adding multiple functional ingredients like non-vegetable thickeners, preservatives, and acidity regulators can legally transform a product from a raw material into a complex preparation, pushing it into a completely different, and potentially more expensive, tariff category.
THE DETAILS
The dispute began when a Dutch wholesaler imported a liquid food thickener, a product specifically designed for individuals with swallowing difficulties (dysphagia). The company sought a Binding Tariff Information (BTI) from Dutch Customs, arguing the product should be classified under heading 1302 of the Combined Nomenclature as a “vegetable-derived thickener.” They based this on the primary ingredient, acacia fibre, which would have made the product exempt from import duties. Customs disagreed, classifying the product under the residual heading 2106 for “food preparations not elsewhere specified,” which carries a significant 12.8% tariff. The case before the court was to decide if the product was a simple binder or a complex food preparation.
The court sided decisively with the customs authorities, providing a critical lesson on how product formulation dictates tariff classification. The judges analyzed the product not just based on its acacia fibre content, but on its complete list of ingredients and its ready-to-use nature. Crucially, the court found that the acacia fibre was present in a concentration too low to act as the primary thickener; its function was merely as an emulsifier. The product’s main thickening power came from other agents, most notably xanthan gum, which is not considered a simple vegetable-derived product for the purposes of heading 1302.
Ultimately, the court determined that the extensive list of additives—including multiple thickeners, gelling agents, acids, preservatives, and stabilizers—went far beyond what is permissible for simple “standardization” of a raw material. This complex formulation created a distinct, new product: a specialized preparation for human consumption. Because the product’s objective characteristics fit the description of a food preparation not specified elsewhere, it was correctly classified under heading 2106 using the primary rule of tariff classification (General Rule 1). The importer’s argument to classify based on the “essential character” of one ingredient was therefore irrelevant, as a more direct classification was available.
SOURCE
Source: Rechtbank Noord-Holland
