Memorandum D10-18-7: Tariff classification of dairy products

Plain language summary

Target audience: Importers of commercial goods.

Key content: Guidelines for the tariff classification of certain dairy products.

Keywords: Tariff classification, dairy products, milk, cream, yogurt, butter, cheese, Import Control List, within access commitment, over access commitment.

Updates to this D-memo

This D-memo has been updated to reflect accessibility and plain language considerations.

Definitions have been added for clarity to terms used in this memorandum.

Guidance for classifying products containing dairy ingredients was expanded.

Instructions for calculating milk solids and dairy content were added.

The scope of this D-memo was adjusted to focus on tariff classification of dairy products on the Import Control List. A new section providing information about the policies that covers the administration of imports for products on the Import Control List was added.

Definitions

The following definitions apply in this memorandum exclusively for the purposes of tariff classification of dairy products in Chapters 4, 15, 18, 19, 21, 22 and 23. These definitions are a plain language summary of various legal, technical, or policy sources.

Product specification document

A detailed document that includes an overview of the product, its physical characteristics, a list of ingredients, safety and quality testing results, packaging details, and the preparation and manufacturing processes involved in its production.

Butter and similar products containing milkfat

Butter

A smooth, fatty substance obtained from churning cream, derived exclusively from milk.

Butteroil

The product obtained by extracting water and non-fat content from butter or cream.

Butter substitute

These products will have a texture, taste and colour similar to "natural table butter," and can be used in all three general applications: as a spread, as a cooking fat, or as a cooking ingredient.

Ghee

A product resulting from butter that has been heated and solids removed, a style of clarified butter.

Margarine

A water-in-oil emulsion, resembling butter in appearance, consistency, colour, etc., generally yellowish and with a "plastic" consistency. It is obtained from the fats or oils of animal or vegetable origin, or from a mixture of these fats or oils.

Dairy spread

A spreadable water-in-oil emulsion, containing milkfat as the only fat in the product.

Cheese

Cheese

Cheese is an unripened or ripened soft, semi-hard, hard, or extra-hard product, obtained by coagulating the protein of milk using rennet or other coagulating agents, and partially draining the resulting whey.

Processed cheese

A product manufactured by mashing, mixing, melting and emulsifying cheese(s), using heat and emulsifying or acidifying agents, with one or more of the following: cream or other dairy products, salt, spices, flavouring, colouring and water. This term can be used interchangeably with process cheese.

Whey cheese

A product obtained by concentrating whey and adding milk or milkfat.

Ice Cream and edible ice

Edible ice

A broad term for any ice cream-like or frozen dessert-type product that is manufactured by freezing and eaten while frozen.

Ice cream/milk

A frozen food preparation obtained by freezing an ice cream/milk mix. The mix may contain cocoa or chocolate syrup, fruit, nuts or confections.

Ice cream/milk mix

The unfrozen, combination of cream, milk or other milk products, sweetened with any combination of sweetening agents.

Sherbet

A frozen food preparation, other than ice cream or ice milk, containing milk solids. It differs from sorbet which is a similar preparation but contains no dairy.

Milk and other dairy products

Fermented milk

A broad term for products obtained by fermenting milk with various starter culture microorganisms.

Milk

The liquid produced by the mammary glands of any lactating mammal. The term applies to all types of this liquid regardless of their fat content, and includes full cream milk, partially or completely skimmed milk. Partially or completely skimmed milk is produced by the separation of milk. After separation, non-fat (skimmed milk), and highly concentrated milkfat (cream) remain.

Milkfat

The natural fat exclusively derived from milk. This term can be used interchangeably with milk fat, butterfat or butter fat.

Milk protein concentrate

A powder or liquid product composed principally of caseins and/or serum proteins, containing other natural milk constituents obtained through ultrafiltration and evaporation, followed by spray drying for the powdered product.

Milk solids

The non-water components of milk left after water is removed. When used as an ingredient, means any constituent of milk (refer to Natural milk constituent) other than water, alone or combined with other constituents of milk. May indicate that dry milk powder is an ingredient of the product.

Natural milk constituent

The individual components that make up milk. The seven main components are water, milkfat, proteins (casein and whey), sugar (lactose), minerals, acids (lactic acid) vitamins and enzymes.

Reconstituted milk

A product that is returned to a liquid state when water is combined with milk powder. Fully reconstituted milk has the same qualitative and quantitative composition as the natural product.

Whey

The liquid that separates from the curd after the coagulation of milk during the cheese-making process.

Whey powder

The dry solids remaining after water is removed from whey. It consists primarily of sugar (lactose), proteins (several different whey proteins, mainly lactalbumins and globulins), and various minerals and vitamins.

Whey protein concentrate

Products derived from whey where water, minerals and lactose have been removed. It can be in liquid, solid concentrate, or dry form.

Guidelines

The following sections provide guidance for classifying dairy products. Guidance provided is in accordance with the version of the Customs Tariff in effect at the time of publishing.

Agricultural goods on the Import Control List

1. Agricultural goods on the Import Control List (ICL) are classified using one of two possible types of tariff items: "within access commitment" or "over access commitment."

2. Subsection 10(2) of the Customs Tariff states that agricultural products included on the ICL:

"…shall not be classified under a tariff item that contains the phrase "within access commitment" unless the goods are imported under the authority of a permit issued under section 8.3 of the Export and Import Permits Act and in compliance with the conditions of the permit".

3. Global Affairs Canada (GAC) establishes the import access levels, allocates quota and issues import permits for agricultural goods on the ICL. Refer to GAC's Export and import controls webpage for more information.

4. Commercial importation of dairy products on the ICL may only be classified under a "within access commitment" tariff item when a shipment-specific import permit for the goods is obtained from GAC, and all its terms and conditions are fulfilled. Without a shipment-specific import permit, goods are classified under an "over access commitment" tariff item.

5. The Export and Import Permits Act governs the issuance of import permits, as referred to in Subsection 10(2) of the Customs Tariff. For information on applying for tariff rate quota (TRQ) allocations and shipment-specific import permits for dairy products, importers are advised to consult GAC's webpage on Canada's supply-managed tariff rate quotas.

6. The issuance of an allocation or a permit by GAC does not constitute a tariff classification ruling.

Classification of dairy products

7. Codex Alimentarius is the international reference on food standards. In Canada, there are two sources for standards: the Canadian Food Compositional Standards incorporated by reference into the Food and Drug Regulations, and the Canadian Standards of Identity incorporated by reference into the Safe Food for Canadians Regulations. Standards and definitions in these documents will be the primary accepted reference(s) for classification purposes, if applicable. The Canadian Dairy Commission's Dairy Ingredient Profiles list is an accepted reference when a standard does not exist.

Note: A product specification document or laboratory analysis may be needed to confirm the composition of goods classified in Chapters 4, 15, 18, 19, 21, 22, and 23.

Chapter 4

8. Products classified in headings 04.01 through 04.04 are allowed to contain a limited amount of added ingredients, such as small quantities of stabilising agents, chemicals necessary for processing, anti-caking agents, and very small quantities of anti-oxidants or vitamins not normally found in the product.

9. Milk and cream are classified in heading 04.01 when they are not concentrated and do not contain added sugar or other sweetening matter. They may be:

• in liquid or frozen state
• fully reconstituted (that is, having the same composition as the natural product)
• pasteurised or unpasteurised
• sterilized or unsterilized

10. At the subheading level, milk and cream of heading 04.01 are classified according to their fat content by weight.

11. Milk or cream are classified in 04.02, when they:

• contain added sugar or sweetening matter, and/or
• are concentrated

Such concentrated and/or sweetened milk or cream of heading 04.02 may be:

• in liquid, paste or solid (such as powder or granule) form
• partially reconstituted

They are allowed to contain up to 5% starch, to maintain milk's normal physical state when reconstituted.

12. Products of heading 04.02 are often classified at the subheading level according to their fat content by weight, and/or sugar content.

Examples of products classified in 04.02 include:

1. a mixture of 49% skim milk powder and 51% sugar, under subheading 0402.10
2. a sweetened condensed milk containing 60% sucrose and 40% milk, under subheading 0402.99

13. Heading 04.03 covers yogurt and curdled, fermented or acidified milk or cream such as buttermilk and kephir. They may be:

• in liquid, paste or solid form (including frozen)
• concentrated

They are allowed to contain added:

• sugar or sweetening matter
• flavouring
• fruits (including pulp and jams), nuts or cocoa

14. Yogurts in heading 04.03 are allowed to contain certain added ingredients, as long as the character of yogurt is retained. The added ingredients are limited to only the following ingredients:

• chocolate
• spices
• coffee or coffee extracts
• plants
• parts of plants
• cereals
• bakers' wares

15. Heading 04.04 covers the following products:

• whey, whether or not concentrated
• products consisting of natural milk constituents that are not covered by any other heading, including:
  • products obtained from whey that contain less than 95% by weight of lactose (calculated on the dry matter)
  • concentrates of two or more whey proteins, containing less than 80% whey proteins (calculated on the dry matter)

Products in this heading may be:

• in liquid, paste or solid (including frozen) form
• concentrated

They are allowed to contain added sugar or other sweetening matter.

16. Products consisting of milk constituents covered by other headings include:

• other sugars of 17.02 (products containing more than 95% by weight of lactose are classified in 17.02)
• food preparations of 19.01, which are based on certain natural milk constituents, but which contain substances not allowed in the products of Chapter 4
• milk constituents in pure chemical form, such as:
  • casein of 35.01
  • milk albumins of 35.02, including concentrates of two or more whey proteins containing 80% or more whey proteins (calculated on the dry matter)
  • globulins of 35.04

17. Heading 04.05 covers:

• butter
• fats and oils derived from milk
• dairy spreads

18. Butter classified in this heading includes natural butter, whey butter, or recombined butter (fresh, salted or rancid, and canned). It may contain salt, food colours, neutralising salts and cultures of harmless lactic-acid-producing bacteria, but do not contain emulsifiers.

19. Butter is classified in subheading 0405.10 if it meets all of the following:

• milkfat content of 80% or more, but not more than 95%, by weight
• maximum milk solids-not-fat content of 2%, by weight
• maximum water content of 16%, by weight

20. Dairy spreads can be classified in subheading 0405.20 with a milkfat content between 39% and 79%, by weight. Products similar to dairy spreads, but containing less than 39% milkfat, are generally covered by headings 15.17 or 21.06.

21. Subheading 0405.90 covers fats and oils derived from milk, other than butter.

Examples of products classified in subheading 0405.90 include:

• fats with a milkfat content of 95% or more
• butteroil
• dehydrated butter
• ghee
• a mixture of butter and herbs, spices, flavourings, garlic, etc., as long as they retain the character of the products of heading 04.05

22. Heading 04.06 covers cheese and curd, which include:

• fresh, blue-veined, soft, medium-hard, and hard cheese
• processed cheese
• whey cheese

These products may be in grated or powdered form, and, as long as they retain the character of cheese, are allowed to:

• contain various ingredients, such as meat, fish, crustaceans, herbs, spices, vegetables, fruit, nuts, vitamins, skimmed milk powder, etc.
• be coated with batter, dough or bread crumbs, whether or not they have been pre-cooked
• contain enzymes added during the cheese making process

Note: Products manufactured by adding enzymes to cheese after the initial cheese making process has finished (for example, enzyme modified cheese) are not classified in heading 04.06.

23. Whey cheese is classified in heading 04.06 only when it meets the characteristics outlined in Note 4 to Chapter 4 of the Customs Tariff.

Chapter 15

24. Heading 15.17 includes the following products, when they contain 15% or less butter or fats and oils derived from milk:

• margarine
• edible preparations of dairy fats or oils other than margarine, such as liquid margarine or shortening

Chapter 18

25. Heading 18.06 covers food preparations containing cocoa. Food preparations of certain dairy products (goods of 04.01 to 04.04) that contain cocoa, or contain 5% or more by weight of cocoa calculated on a totally defatted basis, are classified in 18.06. Guidance in Chapter 19 of this D-memo explains how to determine a "food preparation of goods of 04.01 to 04.04."

Examples of goods classified in 18.06 include preparations such as:

• chocolate ice cream mixes and ice milk mixes
• hot chocolate powder
• chocolate fudge
• chocolate pudding
• chocolate whey protein powder

26. At the tariff item level, ice cream mix and ice milk mixes containing cocoa are classified in 1806.20.21 or 1806.20.22, when they contain (in accordance with standards set out in the Canadian Food Composition Standards):

• not less than 36% solids and 8% milkfat, for ice cream mixes, or
• not less than 33% solids and between 3% to 5% milkfat, for ice milk mixes

Chapter 19

27. Heading 19.01 covers food preparations of goods of headings 04.01 to 04.04 when they do not contain cocoa (or contain less than 5% by weight of cocoa calculated on a totally defatted basis), and are not classified in any other heading. The goods of headings 04.01 to 04.04 are:

• milk or cream, whether or not concentrated or containing sugar or sweetening matter
• yogurt, buttermilk, curdled, fermented or acidified milk or cream
• whey, including modified whey
• products consisting of natural milk constituents

1. Preparations of a similar nature to the products in the above list, but that contain ingredients not allowed in headings 04.01, 04.02, 04.03, and/or 04.04, are classified in 19.01.
2. Other preparations are classified in 19.01 when the product is predominantly based on the goods of headings 04.01 to 04.04. To determine this, the amount of goods of headings 04.01 to 04.04 present in the preparation must be calculated.

28. Generally, these types of preparations will be considered predominantly based on goods of headings 04.01 to 04.04 when:

• the first ingredient of a preparation (listed in descending order by weight) is a good of 04.01 to 04.04
• two or more goods of 04.01 to 04.04 are present, and the combined weight of those goods predominate over the other ingredients when listed in descending order
• ingredients such as water and "powdered milk," "milk powder" or "dried/dry milk" are present in the ingredient list
• the ingredient "milk solids" and water are present in the ingredient list, and the nature of the milk solids is that of milk powder and not individual milk constituents

Note: Water will fully or partially reconstitute dry or powdered milk. When listed separately in an ingredient list, the combined weight of the water and powder are considered to be considered as reconstituted milk, according to a Canadian International Trade Tribunal (CITT) decision (CDC Foods AP-2015-035 and AP‐2016-015).

29. At the tariff item level, goods in this heading containing dairy are classified according to their dry weight basis of milk solids. Refer to the Appendix for instructions on calculating the dry weight basis of milk solids.

Chapter 21

30. Heading 21.05 provides for ice cream and edible ice, whether or not containing cocoa.

31. Products made partly of ice cream or edible ice and combined with other ingredients (such as coatings, or packed between wafers), are also classified in heading 21.05 when the goods retain the character of ice cream or edible ice even with the addition of those other ingredients. According to a CITT decision (Nestle Canada Inc. AP-2015-027) a principal characteristic of these types of goods is that they are eaten while frozen.

Note: Not all products that are eaten while frozen are classified in 21.05, only those that retain the character of ice cream or edible ice.

32. At the tariff item level, the compositional standards for ice cream outlined in Section 7.6 of the Canadian Food Composition Standards regarding Frozen Dairy Products will apply.

1. Flavoured ice and sherbets, containing less than 5% milk solids, are classified in 2105.00.10.
2. Frozen products such as ice cream, ice milk, or edible ice containing 5% or more milk solids, including milkfat, are classified in tariff items 2105.00.91 or 2105.00.92.

33. Heading 21.06 covers any other food preparation for human consumption that contains dairy products and are not classified in any of the preceding headings.

34. At the tariff item level, 2106.90.31 to 2106.90.39 cover milk, cream or butter substitutes and preparations suitable for use as butter substitutes containing dairy. Butter substitutes, in particular, are classified here only when they contain more than 15% but less than 39% milkfat, according to their dairy content, and/or milk solid content in the dry state.

35. Cheese fondue is specifically provided for in tariff item 2106.90.41. According to a CITT decision (AP-2015-011 J. Cheese Inc.) cheese fondue must contain four components:

1. cheese
2. liquid
3. starch, and
4. seasoning

36. All other preparations not considered substitutes for milk, cream or butter, cheese fondue, beverages or of a kind used in animal feeding containing are classified at the tariff item level as followed:

• preparations containing 50% or more by weight of dairy content (2106.90.93 or 2106.90.94)
• preparations containing less than 50% by weight of dairy content, and over 10% by weight of milk solids in the dry state (2106.90.95)
• preparations containing less than 50% by weight of dairy content, and 10% or less by weight of milk solids in the dry state (2106.90.99)

Note: Refer to the Appendix for instructions on calculating dairy content.

Chapter 22

37. Heading 22.02 covers any other non-alcoholic beverages that contain dairy products and are not classified in any of the preceding headings.

38. At the tariff item level, goods of 22.02 containing dairy may be classified according to their dairy content.

Chapter 23

39. Preparations of a kind used in animal feeding containing dairy products are classified in heading 23.09.

40. At the tariff item level, goods of this heading are classified according to their milk solid content, in the dry state.

Other classification information

41. If a gift basket or box contains a selection of food items, each item may need to be classified individually if the assortment is not considered a "set for retail sale," in accordance with the General Interpretive Rule 3(b).

Administration of imports for products on the Import Control List

42. Memorandum D10-18-1: Tariff Rate Quotas provides guidance about:

• the legislative and policy overview for agricultural goods included on the ICL
• obtaining import permits for goods subject to TRQs
• administrative guidelines for declaring and accounting goods

43. Memorandum D19-10-2: Administration of the Export and Import Permits Act (Importations) covers:

• when to use a general import permit or a shipment-specific import permits
• how to declare goods subject to TRQs in the Commercial Accounting Declaration (CAD) process
• permit procedures

Additional information

44. Guidelines about the methodology used to classify goods are provided in Memorandum D10-13-1: Tariff Classification of Goods.

45. Procedures to obtain an advance ruling for tariff classification of goods are outlined in Memorandum D11-11-3: Advance Rulings for Tariff Classification.

Appendix

Calculating dairy content and milk solids

These calculations may not apply for the tariff classification of all goods. When the calculations do not apply, a laboratory analysis may be needed.

An ingredient list with the weight or percentage of each ingredient in the final product is needed for the calculations.

A list of dairy ingredients is provided for reference, following the calculations.

Calculation tip: In cases where ingredients are provided in percentages (totaling to 100%), for the purposes of calculation, assume the total weight of the product equals 100 grams.

List of dairy ingredients

Dairy ingredient includes any of the following:

• milk
• concentrated milk (in liquid, dried, frozen or reconstituted form)
• cream
• buttermilk
• curdled milk or cream
• yogurt
• kephir and other fermented or acidified milk or cream
• cheese or curd
• whey and modified whey
• concentrated whey (commonly referred to as powdered whey or whey protein concentrate)
• whey cream or whey butter
• butter, butteroil and other fats derived from milk
• natural milk constituents / constituents of milk, including:
  • milkfat
  • milk protein concentrates
  • whey protein (isolate)
  • casein, caseinates
  • lactose
• products consisting of natural milk constituents

References

Consult these resources for further information.

Applicable legislation

• Canadian customs tariff
• Customs Tariff
• Export and Import Permits Act
• Import Control List

Related D memoranda

• Memorandum D10-13-1: Tariff Classification of Goods
• Memorandum D10-18-1: Tariff Rate Quotas
• Memorandum D11-11-3: Advance Rulings for Tariff Classification
• Memorandum D19-10-2: Administration of the Export and Import Permits Act (Importations)

Related links

• Alimentarius Official Standards for dairy
• Canadian Food Compositional Standards
• Canadian International Trade Tribunal
• Canadian Standards of Identity: Volume 1 – Dairy Products
• Dairy ingredient profiles
• Export and import controls
• Canada's supply-managed tariff rate quotas
• Notices to importers – Supply-managed tariff rate quotas
• Food and Agriculture Organization Terminology Portal

Superseded D memoranda

Memorandum D10-18-7: Importation of certain dairy products and the Import Control List dated June 30, 2020.

Issuing office

Tariff Classification, Origin and Valuation Division
Trade Programs Directorate
Commercial and Trade Branch

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