CLA-2 RR:CR:GC 964336 AM
Port Director
U.S. Customs Service
10 Causeway St.
Boston, MA 02222-1059
Re: Protest 0401-00-100055; Genzyme MPEG-DSPE
Dear Port Director:
This is in regard to protest 0401-00-100055, concerning your classification of Genzyme MPEG-DSPE under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
Genzyme MPEG-DSPE is a synthetic lipid imported from Switzerland, used as an excipient for the formulation of liposome carriers which encapsulate drugs used in the treatment of various forms of cancer, infections and other maladies. MPEG-DSPE has the chemical name N-(carbonyl-methoxypolyethylene glycol 2000)-1,2-distearoyl-sn-glycero-3-phosphoethanolamine sodium salt. The chemical compound is derived from polyethylene glycol and consists of a polyether polymer and a phospholipid. MPEG-DSPE is described as a phospholipid within the pharmaceutical industry. Customs Lab Report 2-1999-20954, dated July 29, 1999, states that "the product is neither a quaternary ammonium salt/base, nor a phosphoaminolipid. The product is a polymer, polyether type."
The merchandise was entered in October and December of 1998 under subheading 2923.20.20, HTSUS, as a "phospholipid." The entries were liquidated on November 5, 1999, under subheading 3907.20.00, HTSUS, as an "other polyether." A protest was timely filed on February 2, 2000.
ISSUE:
Whether Genzyme MPEG-DSPE is classified in subheading 2923.20.20, HTSUS, as a "phospholipid" or in subheading 3907.20.00, HTSUS, as an "other polyether."
LAW AND ANALYSIS:
Merchandise imported into the U.S. is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context that requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. GRI 3 requires that when goods are prima facie classifiable under two or more headings, the most specific description is preferred, and if neither is more specific, that heading which describes the essential character of the merchandise or, if none, the heading that occurs last in numerical order is used. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs. In interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUSA. See, T.D. 89 80, 54 Fed. Reg. 35127 (August 23, 1989).
GRI 2(b) requires that goods consisting of different materials be classified according to the principles of GRI 3. GRI 3(a) requires that amongst competing headings, the most specific heading be used, but headings which refer to part only of the goods are equally specific. GRI 3(b), provides that composite goods consisting of different materials or made up of different components, shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. Explanatory Note 3(b)(VIII) to GRI 3(b) states that essential character may be determined by "the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods."
The following headings and subheadings are relevant to the classification of this product:
2923 Quaternary ammonium salts and hydroxides; lecithins and other phosphoaminolipids:
2923.20 Lecithins and other phosphoaminolipids:
Other [than purified egg phospholipids, pharmaceutical grade meeting requirements of the U.S. Food and Drug Administration, for use in intravenous fat emulsion]
* * * * * * * * * * * * *
3907 Polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms:
3907.20.00 Other polyethers [other than Polyacetals]
Chapter 29, note 1 (a) states that headings of this chapter apply only to separate chemically defined organic compounds. The Explanatory Notes to Chapter 29, under "GENERAL," state, in part, as follows:
Chemically defined compounds
(Chapter Note 1)
A separate chemically defined compound is a substance which consists of one molecular species (e.g., covalent or ionic) whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram. . . . .
* * * * * * * * * * *
Products which remain classified in Chapter 29, even when they are not separate chemically defined compounds
There are certain exceptions to the rule that Chapter 29 is limited to separate chemically defined compounds. These exceptions include the following products:
* * * * *
Heading 29.23 - Lecithins and other phosphoaminolipids. . . .
In the instant case, the chemical compound is composed of both a phosphoaminolipid functional group and a polyether polymer chain. Hence, GRI 1 does not resolve the classification issue. Both parts describe the product with equal specificity per GRI 3(a). Moving next to GRI 3(b), the importer claims that it is the phosphoaminolipid part of the molecule, which imparts its "essential character." Although the product contains a phosphoaminolipid functional group and may therefore not be excluded from classification in chapter 29, the product is not essentially a phosphoaminolipid.
As indicated by the importer, the product is sold as an excipient for the formulation of liposomes. However, technical literature indicates that the potential of liposomes as effective drug carriers has been limited by their rapid clearance from the bloodstream by the mononuclear phagocytic system (MPS), also referred to as the reticuloendothelial system (RES). As a result, a variety of approaches for extending the circulation time of liposomes have been proposed by imparting a surface coating of hydrophilic polymer onto the surface. The instant product is just such a compound and is therefore not simply a phospholipid. Rather, it is a lipid-polymer conjugate used to extend the blood circulation time of the liposome.
Thus, the polyether polymer chain in this molecule also imparts an essential role by increasing lipsome circulation time in the blood, which could both increase the pharmacokinetic benefits of slow drug release in the bloodstream, and also provide greater opportunity for tissue targeting. Hence, GRI 3(b) does not resolve the classification issue. Accordingly, by action of GRI 3(c), this product is classified in the competing heading which occurs later in the tariff schedule, namely, subheading 3907.20.00, HTSUS, the provision for "[O]ther polyethers."
HOLDING:
The protest is DENIED. Genzyme MPEG-DSPE is classified in subheading 3907.20.00 the provision for "[O]ther polyethers."
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division