OT:RR:CTF:FTM H325604 JER
JoAnne Colonnello, Center Director
Pharmaceuticals, Health, and Chemicals Center of Excellence and Expertise
U.S. Customs and Border Protection
301 E. Ocean Blvd., Suite 700
Long Beach, California 90802
ATTN: Ms. Cathy Sheridan, Import Specialist
RE: Internal Advice; Tariff classification of Chlortetracycline Hydrochloride,
Chlortetracycline Feed Grade Concentrate, and Neomycin Sulfate
Dear Center Director,
This letter is in response to the internal advice request, dated April 13, 2022, initiated by Transmodal Corporation, on behalf of Pharmgate, LLC (“Pharmgate” or “Importer”), concerning the tariff classification of three (3) products used in animal feed under the Harmonized Tariff Schedule of the United States (“HTSUS”).
The Importer requested that certain information submitted in connection with this internal advice be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the Importer’s request for confidentiality is approved. The information contained within brackets in the internal advice decision will not be released to the public and will be withheld from the published version of this decision.
FACTS:
The merchandise at issue consists of three (3) products identified as: (1) Chlortetracycline Hydrochloride (“CTC-HCI”); (2) Chlortetracycline Feed Grade Concentrate (“CTC-FG”); and (3) Neomycin Sulfate. These products are intended for use in treating various animal diseases and infections. The requestor describes the products as follows:
Chlortetracycline Hydrochloride (CTC-HCI)
Chlortetracycline Hydrochloride (“CTC-HCI”) is a broad-spectrum substance for use in the manufacture of veterinary drug products, namely Veterinary Feed Directive (“VFD”) Type A medicated articles and Oral Dosage forms such as Pharmgate’s Pennchlor 64 product. Chlortetracycline Hydrochloride is a yellow powder. It is soluble in water and in alcohol. It dissolves in solutions of alkali hydroxides and carbonates. It is a tetracycline group antimicrobian. CTC-HCI contains up to 90% of Chlortetracycline Hydrochloride as an active ingredient; up to 6% of [***] as a minor component; up to 6% of related substances; up to 2% of water; and up to 0.5% of ethanol as a residual solvent. It has the generic name of chlortetracycline hydrochloride.
The manufacturing process consists of fermentation for [***] hours and a recovery process. Chlortetracycline is produced through fermentation, the culturing of the streptomyces aureofaciens microorganism. The strain of the microorganism goes through continual screening to select a strain with the highest chlortetracycline production.
It is shipped in 25kg bulk containers. Following importation, CTC-HCI is used to manufacture Pharmgate’s Pennchlor 64 product. The Pennchlor 64 retail labeling states the following: “Chlortetracycline HCI, Soluble Powder Concentrate; Antibiotic for animal use in drinking water. CAUTION: Federal law restricts medicated feed containing this veterinary feed directive (VFD) drug to use by or on the order of a licensed veterinarian.”
Chlortetracycline Feed Grade Concentrate (CTC-FG)
Chlortetracycline Feed Grade Concentrate (CTC-FG) is a broad-spectrum substance that is used in the manufacture of veterinary drug products, namely Veterinary Feed Directive (VFD) Type A medicated articles such as Pharmgate’s Pennchlor and Deracin products. It is described as a fine brown powder or granular substance with a characteristic smell. CTC-FG is composed of the active ingredient of Chlortetracycline at 22-24%. It also contains minor components of up to [***] and [***]. Impurities include up to 3% of related drug substances and up to 8% of moisture. Up to 57% of Calcium carbonate is present along with 3% of sugar, 2% fat, and 3% protein. The Deracin 50 Meal retail label states the following: “Deracin 50 Meal Type A Medicated Article; Active drug ingredients: Chlortetracycline as Chlortetracycline Calcium Complex equivalent to 50 grams Chlortetracycline Hydrochloride/lb.; Ingredients: Dried Streptomyces aureofaciens fermentation product in a carrier suitable for incorporation in feed.” The Pennchlor 50 is described as “free-flowing meal feed medication.” The retail label on the Pennchlor 50 product states: “Pennchlor 50 Type A Medicated Article; Active drug ingredients: Chlortetracycline as Chlortetracycline Calcium Complex equivalent to 50 grams Chlortetracycline Hydrochloride/lb.; Ingredients: Chlortetracycline, Calcium Carbonate, Roughage Products and Mineral Oil. Additionally, the retail label reads: “CAUTION: Federal law restricts medicated feed containing this veterinary feed directive (VFD) drug to use by or on the order of a licensed veterinarian.”
The manufacturing process of CTC-FG is conducted in two parts: fermentation and recovery. The Chlortetracycline is produced through fermentation and the culturing of the Streptomyces aureofaciens microorganism. The strain of the microorganism then goes through continual screening to select for a strain with the highest Chlortetracycline production.
The post-importation finished products, Pharmgate’s Deracin 50, Pennchlor 50, and Pennchlor 64, are manufactured from the imported CTC-FG or CTC-HCI. These products claim to treat a number of diseases. For instance, the product claims to treat chickens from diseases such as infectious synovitis, chronic respiratory disease, and E. coli infections. Turkeys are said to be treated from diseases such as infectious synovitis, hexamitiasis, paratyphoid, and bluecomb. Swine are claimed to be treated from diseases such as jowl abscesses, leptospirosis, bacterial enteritis, porcine proliferative, and enteropathies. Finally, cattle are said to be treated from diseases such as anaplasmosis, bacterial enteritis, and bacterial pneumonia.
Neomycin Sulfate
Neomycin Sulfate is a sulfate salt of a type of neomycin, which is an antibacterial substance produced by the growth of Streptomyces fradiae Waksman (Fam. Streptomycetaceae), or a mixture of two or more such salts with the main component being neomycin B sulfate. It contains the active ingredients Neomycin B (main component) comprising 80%, Neomycin A (minor component) at 2%, and Neomycin C (minor component) comprising 3% to 15%.
The manufacturing process for Neomycin Sulfate begins with classical fermentation, which includes five-steps. The steps are: inoculation, seed fermentation, fermentation, purification, and final preparation. The imported Neomycin Sulfate is said to be a broad-spectrum antibiotic drug substance for use in the manufacture of both Dosage forms and Veterinary Feed Directive (VFD) Type A medicated articles such as Pharmgate’s Neo-Oxy products.
According to Pharmgate, these three products, CTC-HCI, CTC-FG, and Neomycin Sulfate, are imported into the United States and formulated into finished products at the Pharmgate manufacturing facilities. The finished products (e.g., Pennchlor, Deracin, Oxytetracycline Neomycin) are said to be sold to licensed feed mills, farmers, and manufacturers of medicated feed articles for use in livestock feeds to treat and control various infections and diseases that occur in livestock animals. Pharmgate claims that these animal feed products are FDA compliant and that the medicated feeds (i.e., finished products Pennchlor, Deracin, Oxytetracycline Neomycin) are prescribed by a veterinarian to treat various illnesses in livestock animals.
Pharmgate describes Chlortetracycline and Neomycin as antibiotics produced through fermentation. It claims that both of these drug substances go through extensive purification processes to remove all of the fermentation media and microorganisms, and to form water soluble salts (hydrochloride and sulfate, respectively). The balance of the purified drugs is the drug substance, and the remaining components are minor to include fermentation analog and its salts. The Pharmgate website provides product information, use levels, dosage calculations, method of delivery, VFD, and other prescription requirements for its Tetracycline and Neomycin products. According to Pharmgate, the Chlortetracycline (“CTC”) is an antibiotic drug substance that is manufactured through the fermentation of the Streptomyces aureofaciens microorganism. The fermentation broth is treated with calcium carbonate to form a calcium complex of the fermentation biomass (drum run). This calcium complex is then filtered, dried, milled/sieved, blended, and packaged. The amylase is an enzyme added to break down the starches of the fermentation media into sugars. The sugars and fats are consumed by the microorganism during the fermentation process that runs for 80 to 160 hours. The fermentation media is composed of approximately 10% carbohydrates. By the end of the fermentation process there is less than 3% sugar present. Starch and sugar are not added to the CTC-FG drug substance.
Chlortetracycline Hydrochloride and Neomycin Sulfate are both said to be purified drug substances and with monographs in the U.S. Pharmacopeia (USP). Neomycin sulfate is said to be approved for use in both human and animal drugs, including both veterinary soluble powders and Type A medicated articles. According to Pharmgate, these products are delivered in oral dosage forms via water soluble powders, tablets, boluses, and in feed as a milk replacer. The CTC products are said to consist of 22 to 24% Chlortetracycline as their active ingredient and are said to be 50% antibiotic overall.
ISSUE:
What is the proper classification of Chlortetracycline Hydrochloride, Chlortetracycline Feed Grade Concentrate, and Neomycin Sulfate?
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the Unites States (“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 which requires otherwise, by the Additional U.S. Rules of Interpretation. GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The HTSUS headings under consideration are as follows:
2309 Preparations of kind used in animal feeding:
2309.10.00 Dog or cat food, put up for retail sale….
* * *
2309.90 Other:
2309.10.10 Mixed feeds or mixed feed ingredients….
* * *
2941 Antibiotics
* * *
2941.30 .00.00 Tetracycline and their derivatives; salts thereof….
* * *
2941.90 Other:
2941.90.10 Natural….
2941.90.10.10 Aminoglycoside antibiotics….
* * *
The Legal Notes to Chapter 23, HTSUS, provide, in pertinent part, as follows :
Note 1.
Heading 2309 includes products of a kind used in animal feeding, not elsewhere specified or included, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material, other than vegetable waste, vegetable residues and byproducts of such processing.
Additional U.S. Note 1.
The term “mixed feeds and mixed-feed ingredients” in subheading 2309.90.10 embraces products of heading 2309 which are admixtures of grains (or products, including byproducts, obtained in milling grains) with molasses, oilcake, oil-cake meal or feedstuffs, and which consist of not less than 6 percent by weight of grain or grain products.
The Legal Notes to Chapter 29, HTSUS, provide, in pertinent part, as follows:
Note 1.
Except where the context otherwise requires, the headings of this chapter apply only to:
(a) Separate chemically defined organic compounds, whether or not containing impurities;
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are thus useful in ascertaining the proper classification of the merchandise. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to heading 2309, HTSUS, provide, in pertinent part:
This heading covers sweetened forage and prepared animal feeding stuffs consisting of a mixture of several nutrients designed :
to provide the animal with a rational and balanced daily diet (complete feed);
to achieve a suitable daily diet by supplementing the basic-farm produced feed with organic or inorganic substances (supplementary feed) ; or
for use in making complete or supplementary feeds.
(II) OTHER PREPARATIONS
PREPARATIONS DESIGNED TO PROVIDE THE ANIMAL WITH ALL THE NUTRIENT ELEMENTS REQUIRED TO ENSURE A RATIONAL AND BALANCED DAILY DIET (COMPLETE FEEDS)
* * *
(3) “Function” nutrients. These are substances which promote the assimilation of carbohydrates, proteins and minerals. They include vitamins, trace elements and antibiotics. Lack or deficiency of these nutrients usually causes disorders.
(B) PREPARATIONS FOR SUPPLEMENTING (BALANCING) FARM-PRODUCED FEED (FEED SUPPLEMENTS)
Farm produced feed is usually rather low in proteins, minerals or vitamins. The preparations devised to compensate for these deficiences, so as to ensure a well-balanced animal diet, consist of proteins, minerals or vitamins plus additional-energy feeds (carbohydrates) which serve as a carrier for the other ingredients.
(C) PREPARATIONS FOR USE IN MAKING THE COMPLETE FEEDS OR SUPPLEMENTARY FEEDS DESCRIBED IN (A) AND (B) ABOVE
These preparations, known in trade as “premixes”, are, generally speaking, compound compositions consisting of a number of substances (sometimes called additives) the nature and proportions of which vary according to the animal production required. These substances are of three types:
(1) Those which improve digestion and, more generally, ensure that the animal makes good use of the feeds and safeguard its health: vitamins or provitamins, amino acids, antibiotics, coccidiostats, trace elements, emulsifiers, flavourings and appetisers, etc.
* * *
(b) Preparations consisting of an active substance of the type described in (1) above with a carrier, for example products of the antibiotic manufacturing process obtained by simply drying the mass, i.e., the entire contents of the fermentation vessel (essentially mycelium, the culture medium and he antibiotic). The resulting dry substance, whether or not standardized by adding organic or inorganic substances, has an antibiotic content generally ranging between 8 % and 16 % and is used as basic material in preparing, in particular, “premixes”.
* * *
The preparations of this group should not, however, be confused with certain preparations for veterinary uses. The latter are generally identifiable by the medicinal nature and much higher concentrations of the active substance and are often out up in a different way.
* * *
The heading excludes:
(k) Intermediate products of the antibiotics manufacturing process obtained by filtering and first-stage extraction and the residues of this process, with an antibiotic content generally not exceeding 70 % (heading 38.24).
* * *
The ENs to heading 2491, HTSUS, provide, in part as follows:
Heading 29.41 – Antibiotics.
* * *
Antibiotics are substances secreted by living micro organisms which have the effect of killing other micro organisms or inhibiting their growth. They are used principally for their powerful inhibitory effect on pathogenic micro organisms, particularly bacteria or fungi, or in some cases on neoplasms. They can be effective at a concentration of a few micrograms per ml in the blood.
Antibiotics may consist of a single substance or a group of related substances, their chemical structure may or may not be known or be chemically defined. They are chemically diverse and include the following:
(1) Heterocyclic, e.g., novobiocin, cephalosporins, streptothricin, faropenem (INN), doripenem (INN), monobactams (e.g., aztreonam (INN)). The most important of this class are the penicillins* which are secreted by several species of the fungus Penicillium. This class also includes procaine penicillin.
(2) Sugar related, e.g., streptomycins*.
(3) Tetracyclines and their derivatives, e.g., chlortetracycline (INN), oxytetracycline (INN)*.
(4) Chloramphenicol and its derivatives, e.g., thiamphenicol and florfenicol.
(5) Macrolides, e.g., erythromycin*, amphotericin B, tylosin.
(6) Polypeptides, e.g., actinomycins, bacitracin, gramicidins, tyrocidin.
(7) Other antibiotics, e.g., sarkomycin, vancomycin.
This heading also includes chemically modified antibiotics used as such. These may be prepared by isolating ingredients produced by natural growth of the micro organism and then modifying the structure by chemical reaction or by adding sidechain precursors to the growth medium so that desired groups are incorporated into the molecule by the cell processes (semi synthetic penicillins); or by bio synthesis (e.g., penicillins from selected amino acids).
Natural antibiotics reproduced by synthesis (e.g., chloramphenicol) are classified in this heading, as are certain synthetic products closely related to natural antibiotics and used as such (e.g., thiamphenicol).
In this heading, the term “derivatives” refers to active antibiotic compounds which could be obtained from a compound of this heading and which retain the essential characteristics of the parent compound, including its basic chemical structure.
This heading does not cover:
Antibiotic preparations of a kind used in animal feeding (e.g., dried and standardised complete mycelium (heading 23.09).
* * *
Applying GRI 1 and analyzing the terms of the headings and chapter notes, we must determine whether the products – Chlortetracycline Hydrochloride (CTC-HCI), Chlortetracycline Feed Grade Concentrate (CTC-FG), and Neomycin Sulfate – are “preparations of a kind used in animal feed” or “antibiotics.”
The Importer contends that the subject products are drug substances rather than animal feed and should be classified as antibiotics under heading 2941, HTSUS. Pharmgate highlights that the CTC-FG was approved by the Food and Drug Administration’s (“FDA”) Center for Veterinary Medicine (“CVM”) under Veterinary Master File 005-468, noting that the CTC-FG is a Type A medicated article according to 21 C.F.R. § 558.3(b)(2) (2022). Pharmgate further notes that 21 C.F.R. § 558.6 provides that Type A medicated articles containing Chlortetracycline require that a veterinary feed directive (“VFD”) be issued by a licensed veterinarian for use of Type A medicated articles to make medicated feeds. The Importer also states that the subject Chlortetracycline Hydrochloride and Neomycin Sulfate both fall under the FDA definition of purified drug substances under U.S. Code Title 21, section 321(g)(1) and consist of monographs in the U.S. Pharmacopeia (“USP”) which require a VFD prior to usage. Accordingly, the Importer asserts that these three substances are distinguishable from the preparations used in animal feeds of heading 2309, HTSUS.
We note that FDA regulations are not binding on CBP. Moreover, CBP is not required to consider other agency regulations when determining the tariff classification of a product under the HTSUS. Statutes, regulations, and administrative interpretations relating to ‘other than tariff purposes’ are not determinative of CBP classification disputes. See Amersham Corp. v. United States, 5 C.I.T. 49, 56, 564 F.Supp. 813, 817 (1983); see also, Headquarters Ruling Letter (“HQ”) H316751, dated June 9, 2021 (wherein CBP noted that compliance with an FDA regulation, although informative, did not impact the tariff classification of certain tomato products.). However, the definitions provided in Title 21 can be instructive when determining commercial definitions of a product. See generally, HQ H310309, dated June 2, 2020 (CBP discussed the FDA’s description of over-the-counter nicotine replacement products and the U.S. Centers for Disease Control and Prevention’s (“CDC”) discussion of nicotine cessation products.) Under 21 C.F.R. § 510.3(h) animal feed is defined as: “an article which is intended for use for food for animals…which is intended for use as a substantial source of nutrients in the diet of the animal and is not limited to a mixture intended to be the sole ration of the animal.” Animal feed is also defined as being, “Edible material that is consumed by an animal and contributes energy, nutrients, or both, to the animal’s diet.”
Heading 2309, HTSUS, contemplates animal feed preparations which provide nutritional value and sustenance in an animal’s diet. The ENs to heading 2309, HTSUS, describes different categories of animal feed preparations. In particular, “this heading covers sweetened forage and prepared animal feeding stuffs consisting of a mixture of several nutrients designed: (1) to provide the animal with a rational and balanced daily diet (complete feeds); (2) to achieve a suitable daily diet by supplementing the basic farm-produced feed with organic or inorganic substances (supplementary feed); and (3) for use in making complete or supplementary feeds.” Subheading 2309.10, HTSUS, applies to dog or cat food put up for retail sale whereas subheading 2309.90, HTSUS, applies to other animal food. Note 1 to Chapter 23, HTSUS, provides, in pertinent part, that, “heading 2309 includes products of a kind used in animal feeding…obtained by processing vegetable or animal materials…” Hence, an animal feed preparation of heading 2309, HTSUS, must fall under the category of either a complete feed, a supplementary feed, or a product used in making either a complete or supplementary feed and be obtained by processing vegetable or animal materials.
As described by Pharmgate, after the subject products are used to make the post-importation medicated feed products, they are administered in dosage forms that are added to the animal’s drinking water or added to animal feed. According to the Pharmgate website, these products are not medicated food products (i.e., meals), but are VFD licensed active chemical ingredients used to make medicinal products for animals. Likewise, these products are not of the type that are put up for retail sale as dog, cat, or other animal food. Therefore, these products cannot be considered a “complete feed” preparation of heading 2309, HTSUS.
Next, we consider whether these products can be classifiable under heading 2309, HTSUS, as a “supplementary feed” preparation. Note 1 to Chapter 23, HTSUS, states that heading 2309, HTSUS, includes products used in animal feeding obtained by processing vegetable or animal materials. Assuming, arguendo, that the CTC-HCI, CTC-FG, and Neomycin Sulfate are obtained by processing vegetable materials because the antibiotics are produced from the fermentation of Streptomyces microorganism, which is obtained from decaying vegetable matter. Additional U.S. Note 1 to Chapter 23, HTSUS, states that, “the term “mixed feeds and mixed-feed ingredients” in subheading 2309.90.10 embraces products of heading 2309 which are admixtures of grains (or products, including byproducts, obtained in milling grains) with molasses, oilcake, oil-cake meal or feedstuffs, and which consist of not less than 6 percent by weight of grain or grain products.” The subject products do not fall within the definition of mixed feeds or mixed-feed ingredients as set forth in Additional U.S. Note 1 to Chapter 23, HTSUS, because they are not admixtures of grains and do not contain grains. As such, the subject chemical products can only be classified under heading 2309, HTSUS, if they are determined to be a preparation used in making a complete or supplementary feed.
The ENs to heading 2309, HTSUS, state that these preparations known as “premixes” are compound compositions consisting of a number of substances (sometimes called additives). Such premixes may include concentrations of active substances such as antibiotics and are used to make either complete feeds or supplementary feeds. EN 23.09 further explains that such antibiotics are “obtained by simply drying the mass, i.e., the entire contents of the fermentation vessel (essentially mycelium…).” EN 23.09 further states that the resulting dry substance has an antibiotic content ranging between 8% and 16%. EN 23.09 also clarifies that preparations with all the nutritional elements, i.e., complete feeds and supplemental feeds “should not be confused with certain preparations for veterinary uses. The latter are generally identifiable by the medicinal nature and much higher concentration of active substances…”
CBP has previously classified products under the category of “animal food preparations” and “animal feed premixes.” For example, in New York Ruling Letter (“NY”) 802423, dated October 20, 1994, CBP classified a similar Chlortetracycline feed grade material (“CTC product”) under heading 2309, HTSUS. The CTC product in NY 802423 contained corn starch, glucose, corn-steep liquor, soybean meal, peanut meal, yeast powder, peptone, vegetable oil, added sugar, and starch. As such, the CTC product in NY 802423 fell under the category of an antibiotic additive that supplemented the nutritional value of the animal feed because it contained ingredients which provided nutritional value and sustenance. In HQ 087827, dated November 30, 1990, CBP classified an animal preparation under heading 2309, HTSUS. The product in HQ 087827 was an admixture of grains, containing over 6% of grains and included feedstuffs in the form of soya meal. Similarly, in HQ 952338, dated November 18, 1992, CBP determined that a product which included riboflavin, lysine, amorphous silica, mineral oil, calcium carbonate, and rice hulls or cob meal was a premix for purposes of heading 2309, HTSUS. CBP determined that the premix contained nutritional supplements and a carrier (rice hulls or cob meal) and could be used as a complete feed which could be mixed with another premix and added to animal feed.
In distinguishing between products which were classifiable as an animal feed preparation or premix of heading 2309, HTSUS, from those products which are classifiable as an antibiotic of heading 2941, HTSUS, CBP has not always viewed the preclusion stated in EN 23.09 of products containing “higher concentration of active substances” (antibiotics) as being determinative. For instance, in HQ 086477, dated March 26, 1990, CBP addressed the distinction between an antibiotic of heading 2491, HTSUS, and an animal feed preparation of heading 2309, HTSUS. The decision in HQ 086477 concerned the classification of pre-mixed feed preparation containing 20% efrotomycin granules (an antibiotic). CBP classified the product under heading 2309, HTSUS, despite the high percentage of antibiotic substances, explaining that the word “generally” 8% to 16% range articulated in EN 23.09, was descriptive rather than a limitation. Hence, decision in HQ 086477 reasoned that the word “generally” allowed for sufficient “flexibility” to include those premixes with an antibiotic content that exceeded the 8% to 16% range described in EN 23.09. Similarly, in HQ 083437, dated March 13, 1990, CBP classified a dried salinomycin mycelial cake that consisted of 20-30% salinomycin (an antibiotic). After importation the salinomycin mycelial cake was standardized to 6% salinomycin and was used to produce a medicated premix product which was to be added to chicken feed for the control of coccidiosis and to improve weight gain. CBP determined that, at the time of importation, the salinomycin mycelial cake was classified under heading 2309, HTSUS. In reaching this conclusion, similar to the decision in HQ 086477, CBP reasoned that the percentage range described in EN 23.09 was descriptive rather than limiting because of the use of the word “generally” in the ENs when referencing the percentage of permissible antibiotics.
EN 23.09 states that “preparations of this group should not, however, be confused with certain preparations for veterinary uses. The latter are generally identifiable by the medicinal nature and much higher concentrations of the active substance.” The Pharmgate products are not like the antibiotic additives or premixed preparations described in EN 23.09. First, the subject antibiotic drug substances are not supplementary feeds or supplementary additives intended to achieve a suitable daily diet as contemplated by heading 2309, HTSUS. Secondly, these products are not used to make supplementary feeds or complete feeds. These products are used to produce medicated animal feeds. Most importantly, these products do not provide any substantial source of nutrients in the diet of the animal. Rather, they are manufactured to treat animal diseases and infections. The Pharmgate website indicates that the CTC-HCI and CTC-FG products are FDA-approved as Type A medicated articles. Likewise, the retail labeling on the post-importation products (i.e., Pennchlor and Deracin) are designed to be added to animal drinking water or feed for the purpose of treating diseases and infections. There are no indications on the retail labeling of the post-importation products to suggest that these products have any nutritional value or have the capacity to supplement an animal’s nutrition. Instead, the ingredients of the finished products indicate that they are solely medicinal in substance and purpose. Furthermore, unlike the animal feed preparation discussed in HQ 087827, the percentage of the active ingredient, Chlortetracycline, in the CTC-HCI and CTC-FG exceeds the 8-16% range described in the ENs to heading 2309, HTSUS, at 22 to 24% and 90%, respectively. Additionally, each product includes a percentage of pure Tetracycline. The CTC in particular, consists of 90% Chlortetracycline and has more than 50% the antibiotic content. Likewise, the subject products are distinct from the animal feed premix in HQ 952338, as they do not contain animal nutrients or carriers such as rice hull or cob meal. Rather, unlike the animal feed preparations and premixes which CBP classified under heading 2309, HTSUS, the subject products are manufactured for veterinarian use.
Medicinal feed preparations of a kind designed to be used by veterinarians are excluded from heading 2309, HTSUS. In particular, EN 23.09 states that “the preparations of this group should not, however, be confused with certain preparations for veterinary uses. The latter are generally identifiable by the medicinal nature and much higher concentration of the active [antibiotic] substance[.]” A review of the Pharmgate website shows that a VFD form must be completed and submitted prior to use of the Type A medicated feeds (i.e., CTC-HCI and CTC-FG). In the VFD form, the user must indicate the type of animal, the animal’s weight, the drug level used (i.e., the amount of Chlortetracycline in each dosage), and the duration of use. Hence, these products fall within the type of preparations which are designed for veterinary use which are explicitly precluded from heading 2309, HTSUS as reflected in EN 23.09. Likewise, the retail labeling on the imported products Pennchlor and Dracin states: “CAUTION: Federal law restricts medicated feed containing this veterinary feed directive (VFD) drug to use by or on the order of a licensed veterinarian. Lastly, the subject neomycin sulfate is approved for use in both human and animal drugs, including both veterinary soluble powders and Type A medicated articles.”
The imported Neomycin Sulfate is used to manufacture Pharmgate’s NeoOxy 100/100 MR. Generally speaking, Neo-Oxy 100/100 MR (oxytetracycline and neomycin sulfate) is an antibiotic intended for animal use only. It is known as a broad-spectrum antibiotic due to its ability to address a wide range of infections. It is the second of the tetracyclines to be discovered. Neo-Oxy 100/100 MR, like other tetracyclines, is used to treat many common and rare infections. In this case, the antibiotic effects of the CTC-HCI, CTC-FG, and Neomycin Sulfate dominate their chemical makeup, function, and purpose. As such, we find that these antibiotics are beyond the scope of the antibiotic additives contemplated by EN 23.09. Having considered and eliminated classification under heading 2309, HTSUS, we turn to the appropriateness of classification within heading 2941, HTSUS. We note that the ENs to 2941 states that this heading does not cover “antibiotics of a kind used in animal feeding, e.g., dried or standardized complete mycelium (heading 23.09).”
As previously determined, the subject antibiotics are distinct from the antibiotic additives described in the ENs to heading 2309, HTSUS. Specifically, the subject antibiotics are manufactured for veterinarian usage and consist of antibiotic chemical profiles which are beyond the scope of heading 2309, HTSUS, as the percentage of antibiotic chemical compounds exceeds fifty percent (50%). Moreover, the antibiotics used in animal feeding in heading 2309, HTSUS, contemplate an additive which will supplement the animal’s daily diet. The subject antibiotics are used solely to treat animal diseases and infections and have no nutritional value. Unlike the CTC product in NY 802423, these products do not contain corn starch, soybean oil, peanut meal, corn meal, corn starch, or similar ingredients found in animal feed. Rather, while the subject products can be added to animal feed they are imported in antibiotic form.
Heading 2941, HTSUS, provides for antibiotics eo nomine. Heading 2941, HTSUS, provides for antibiotics. The EN to 2941 states in relevant part:
Antibiotics are substances secreted by living micro-organisms which have the effect of killing other micro-organisms or inhibiting their growth. They are used principally for their powerful inhibitory effect on pathogenic micro-organisms, particularly bacteria or fungi, or in some cases on neoplasms. They can be effective at a concentration of a few micrograms per ml in the blood.
In Lonza, Inc. v. U.S., 46 F.3d 1098, 1108 (Fed. Cir. 1995), the court stated that “antibiotics are commonly understood to mean substances, produced either naturally or synthetically, that exhibit an ability to kill or inhibit the growth of microorganisms.” Id. The ENs to heading 2941, HTSUS, explain that antibiotics include: “tetracycline and their derivatives.” According to the National Institute of Health (NIH), Chlortetracycline is a member of the class of tetracyclines with formula C22H23ClN2O8 isolated from Streptomyces aureofaciens. It has a role as an antiprotozoal drug, a fluorescent probe, a calcium ionophore and an antibacterial drug. It is a member of monochlorobenzenes, a tertiary amino compound, a tertiary alcohol, a monocarboxylic acid amide, a tertiary alpha-hydroxy ketone and a member of tetracyclines. It is a conjugate acid of a chlortetracycline. NIH states that Chlortetracycline (“CTC”) is a tetracycline and it is the first class of tetracyclines discovered in 1945 by the scientist, Benjamin Minge Duggar. See HQ H128140, dated November 7, 2011 (wherein CBP discussed the term derivatives for purposes of heading 2941, HTSUS, explaining that “Derivative” is “a term used in organic chemistry to express the relation between certain known or hypothetical substances and the compound formed from them by simple chemical processes in which the nucleus or skeleton of the parent substance exists.”) Under the Explanatory Notes for Heading 2941, a derivative must “retain the essential characteristics of the parent compound, including its basic chemical structure.”
Based on our research, Chlortetracycline is a tetracycline antibiotic with the chemical formula, C22H23ClN2O8. Tetracycline is used to treat infections caused by bacteria including pneumonia and other respiratory tract infections along with certain other infections of the skin, eye, or lymphatic, intestinal, genital and urinary systems. According to Pharmgate, tetracyclines are a group of broad-spectrum antibiotic compounds that have a common basic structure and are either isolated directly from several species of streptomyces bacteria or produced semi-synthetically from those isolated compounds. Chlortetracycline Hydrochloride (CTC- HCI) is a tetracycline with broad-spectrum antibacterial and antiprotozoal activity. Chlortetracycline Hydrochloride is bacteriostatic and inhibits bacterial protein synthesis by binding to the 30S ribosomal subunit, thereby preventing the addition of amino acids to the growing peptide chain. Pharmgate states that the CTC- HCI and CTC-FG are for the treatment of diseases and infections in a number of animals such as swine, turkeys, chickens, and cattle. Chlortetracycline Hydrochloride and Neomycin Sulfate are both purified drug substances which are recognized by the United States Pharmacopoeia and FDA as purified drug substances. They are only approved for use in the manufacture of drug products, all of which are in dosage forms. Both the CTC-HCI and CTC-FG require a veterinary feed directive (VFD) be issued by a licensed veterinarian prior to their use. According to the information found on the Pharmgate website, the CTC-HCI and CTC-FG are the primary active ingredients used to make several different Type A of medicated feeds. For example, the imported CTC is the primary active ingredient in Pharmgate’s Pennchlor and Deracin medicated feeds. Note 1(a) to Chapter 29, HTSUS, provides, in pertinent part, that: “headings of this chapter only apply to: (a) separately chemically defined organic compounds, whether or not containing impurities.”
General Chapter Note 1 to Chapter 29, HTSUS, states that “a separate chemically defined compound is a substance which consists of one molecular species whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram.” The subject CTC- HCI, CTC-FG, and Neomycin Sulfate each have their own individual chemical name, chemical structure, and their own molecular formula. In particular, the CTC- HCI and neomycin sulfate are purified drug substance that are only approved for use in the manufacture of drug products in accordance with FDA regulations. The CTC is a broad-spectrum antibiotic drug substance for use in the manufacture of Type A medicated articles and a veterinary feed directive (“VFD”) issued by a licensed veterinarian is required for its use. Accordingly, each of the subject antibiotic drug substances meets the definition of separate chemically defined organic compounds as set forth in Note 1 to Chapter 29, HTSUS, and fall within the purview of chemical compounds for purposes of Chapter 29, HTSUS.
HOLDING:
By application of GRI 1, the Chlortetracycline products, CTC-HCI and CTC-FG are classified under heading 2941, HTSUS, specifically, under subheading 2941.30.00, HTSUS, which provides for: “Antibiotics: Tetracyclines and their derivatives; salts thereof.” The 2022 column one general rate of duty is Free. The Neomycin Sulfate is classified under heading 2941, HTSUS, and specifically, under subheading 2941.90.1010, HTSUS Annotated, which provides for: “Antibiotics: Other: Natural: Aminoglycoside antibiotics.” The 2023 column one general rate of duty is Free.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at https://hts.usitc.gov/.
You are to mail this decision to the requestor no later than 60 days from the date of the decision. At that time, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and to the public on the Customs Rulings Online Search System (“CROSS”), at https://rulings.cbp.gov/, and other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division