CLA-2 OT:RR:CTF:TCM H002847 ARM
TARIFF NO: 2106.90.9998
Lowell De France
Ted L. Rausch Co.
2300 Higgins St. 310
Elk Grove Village, IL 60007
RE: Classification of bulk Hyaluronic Acid 9%; Reconsideration of New York Ruling Letter R04494, dated August 9, 2006
Dear Mr. De France:
This is in reply to your request, of November 2, 2006, for reconsideration of New York Ruling Letter (NY) R04494, dated August 9, 2006, regarding the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of bulk Hyaluronic Acid 9% for use in soft gel capsules as a human nutritional supplement. In NY R04494, Customs and Border Protection (“CBP”) classified a mixture of 60-70 percent maltodextrin, 15-25 percent residue proteins, and 9 percent hyaluronic acid derived from rooster comb in subheading 2106.90.9998, HTSUS, which provides for “food preparations not elsewhere specified or included…other… other…other,” at a rate of duty of 6.4 percent ad valorem. You ask that we consider classification in heading 3003, HTSUS, which provides for “Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packings for retail sale: . . . ” and revoke NY R04494.
FACTS:
NY R04494 describes the instant merchandise as follows:
The product, rooster comb powder, is manufactured from frozen rooster comb that has been cleaned, sterilized, hydrolyzed using enzymes, and macerated to separate the hyaluronic acid from the rooster comb. Maltodextrin is added to spray dry the acid, resulting in a mixture of 60-70 percent maltodextrin, 15-25 percent residue proteins, and 9 percent hyaluronic acid. It will be imported in bulk and filled into soft gel capsules for use as a human nutritional supplement.
We note that Hyaluronic Acid (HA) is a natural high-viscosity mucopolysaccharide with alternating beta (1-3) glucuronide and beta (1-4) glucosaminidic bonds. It is found in the umbilical cord, in vitreous humor, in synovial fluid, in pathologic joints, in group A and C hemolytic streptococci, and in Wharton's jelly. (Merck, 11th ed).
You submit an article titled “Intra-articular hyaluronan treatment for osteoarthritis.” “Intra-articular” treatment refers to injection into a joint. You also submit a copy of a pamphlet on Injuv®, from Soft-Gel Technologies, presumably the final oral capsule product the instant merchandise is used to create. This pamphlet states that “Orally administered HA is different than injectable HA. The very properties that make injectable HA so successful, are the same ones that make it impossible to be absorbed in oral form. . . . In its natural state, the molecular weight of HA makes it impossible for oral absorption.” The pamphlet goes on to claim that a process has been discovered to reduce the molecular weight of HA so that it can be absorbed by the intestinal tract. The pamphlet then discusses the makeup of the epidermis and the role of HA in keeping the skin from appearing dull and wrinkled. The pamphlet highlights this claim:
Injuv® gets absorbed from the inside out. After entering the intestinal tract, it moves through the bloodstream to enter the extracellular matrix of the skin, from dermis to epidermis. With sufficient amounts of HA in the ECM of the skin, the keratinocytes survive longer. This survival leads to a more youthful appearance of the skin.
The pamphlet concludes with the following statement:
“Injuv® is the cosmeceutical that moisturizes from the inside out.”
ISSUES:
Is bulk hyaluronic acid (9%) a medicament?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI). 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.
When interpreting and implementing the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, while neither legally binding nor dispositive, provide a guiding commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS.
Customs and Border Protection (CBP) believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The following HTSUS provisions are relevant to the classification of this product:
Food preparations not elsewhere specified or included:
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3003 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packings for retail sale:
* * * * *
The ENS to heading 2106 state, in pertinent part, the following:
Provided that they are not covered by any other heading of the Nomenclature, this heading covers :
(A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk, etc.), for human consumption.
* * * * *
The heading includes, inter alia:
* * * * *
(16) Preparations, often referred to as food supplements, based on extracts from plants, fruit concentrates, honey, fructose, etc. and containing added vitamins and sometimes minute quantities of iron compounds. These preparations are often put up in packagings with indications that they maintain general health or well being. Similar preparations, however, intended for the prevention or treatment of diseases or ailments are excluded (heading 30.03 or 30.04).
The ENs to heading 3003 state, in pertinent part, the following:
This heading covers medicinal preparations for use in the internal or external treatment or prevention of human or animal ailments. These preparations are obtained by mixing together two or more substances. However, if put up in measured doses or in forms or packings for retail sale, they fall in heading 30.04.
The heading includes :
* * * * *
(7) Medicinal salts obtained by the evaporation of natural mineral waters and similar products artificially prepared.
(8) Concentrated waters from salt sources (such as Kreuznach waters) used in therapeutics; mixed salts prepared for medicinal baths (sulphurous, iodized, etc., baths), whether or not perfumed.
(9) Health salts (e.g., a mixture of sodium hydrogencarbonate, tartaric acid, magnesium sulphate and sugar) and similar mixed effervescing salts used for medicinal purposes.
(10) Camphorated oil, phenolated oil, etc.
* * * * *
Moreover, products consisting of a mixture of plants or parts of plants or consisting of plants or parts of plants mixed with other substances, used for making herbal infusions or herbal “teas” (e.g., those having laxative, purgative, diuretic or carminative properties), and claimed to offer relief from ailments or contribute to general health and well-being, are also excluded from this heading (heading 21.06).
Further this heading excludes food supplements containing vitamins or mineral salts which are put up for the purpose of maintaining health or well-being but have no indication as to use for the prevention or treatment of any disease or ailment. These products which are usually in liquid form but may also be put up in powder or tablet form, are generally classified in heading 21.06 or Chapter 22.
On the other hand, the heading covers preparations in which the foodstuff or the beverage merely serves as a support, vehicle or sweetening agent for the medicinal substances (e.g., in order to facilitate ingestion).
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The instant merchandise is described by the terms “food preparation” in that it is a “preparation . . . for human consumption.” EN 2106. Further, it is of the kind of preparation described in EN 2106 (16). While not derived from plants, the merchandise, once encapsulated, is known as a dietary supplement and, according to literature submitted with your letter, “ . . . has the potential to help eliminate the appearance of fine lines and wrinkles, improve the appearance of scars, and support the quality of the synovial fluid and joint health.” These are general health and well-being claims. No disease or ailment is identified for which the product is meant to treat or prevent.
However, you state that the recent case on chondroitin sulfate, Inabata Specialty Chems. v. United States, 366 F. Supp. 2d 1358, (Ct. Int’l Trade 2005), supports your position that bulk HA is classified in heading 3003, HTSUS. The Inabata case dealt with the classification of bulk chondroitin sulfate as between heading 3913, HTSUS, which provides for muccopolysaccharides, and heading 3001, which provides for animal substances for therapeutic or prophylactic use. The court noted that heading 3001, HTSUS, is a principal use provision within the meaning of Additional U.S. Rule of Interpretation 1(a) and proceeded to analyze the merchandise under the Carborundum factors. The court stated:
Tariff classification law relies heavily on commercial practice and understandings. Tariff classifications are mainly about the marketplace. In determining whether a particular item falls within the class or kind of merchandise principally used in the manner described by a tariff heading, the courts have considered the following factors: (1) general physical characteristics; (2) expectations of the ultimate purchaser; (3) channels of trade in which the merchandise moves; (4) environment of sale; (5) use in the same manner as merchandise which defines the class; (6) economic practicality of so using the imported merchandise; and (7) recognition in the trade of this use. Lenox Collections v. United States, 19 CIT 345, 347 (1995); United States v. Carborundum Co., 536 F.2d 373, 377, 63 C.C.P.A. 98 (C.C.P.A. 1976). By application of these factors to the CS at issue, the overwhelming weight of the evidence points to CS belonging to the class or kind of merchandise described in HTSUS Heading 3001. Id. at 1364.
Like heading 3001, HTSUS, at issue in Inabata, heading 3003, HTSUS, uses the term “for therapeutic or prophylactic use.” The Inabata court discussed this term as indicative of a principal use provision. We will analyze heading 3003, HTSUS, as such. You indicate that the court states that the term requires only that the product be prepared, marketed and bought for therapeutic or prophylactic purposes. Id. at 9. According to the literature you submitted, this imported mixture of 9% sodium hyaluronate, maltodextrin and other ingredients is prepared, marketed and purchased in order to have “ . . . the potential to help eliminate the appearance of fine lines and wrinkles, improve the appearance of scars, and support the quality of the synovial fluid and joint health.” Wrinkles and scars are not a disease or ailment. In fact, the ENs to heading 3304, HTSUS, providing for skin care products, specifically include the injectable hyaluronic acid product meant to do exactly this. Thus, sterile pre-filled syringes containing hyaluronic acid gel for dermal filling are classified in heading 3304, HTSUS, as “preparations for the care of the skin” in accordance with the specific inclusion for such products in EN 33.04 (see NY R04609, dated September 5, 2006).
While you submit an article showing that injecting hyaluronic acid into a joint may help to relieve the pain of osteoarthritis, this only shows that injectable hyaluronic acid should be classified as a medicament. We agree. We have classified the injectable form of hyaluronic acid for similar ailments in heading 3004. In NY H89822, dated April 4, 2002, NY I81075, dated April 26, 2002, and in NY N004962, dated January 9, 2007, CBP classified finished hyaluronic acid products packaged for injection in the treatment of stomatitis, ophthalmic and cataract surgery, respectively, in heading 3004, HTSUS, which provides for: “Medicaments . . . consisting of mixed or unmixed products for therapeutic or prophylactic uses . . . .” But you submit no evidence that the bulk 9% hyaluronic acid mixture is prepared, marketed, or purchased for the treatment of arthritis, stomatitis, or ophthalmic and cataract surgery. Instead, you claim that it “has the potential . . . to improve the quality of the synovial fluid and joint health.” No treatment or prophylaxis claim is made and it is unlikely that the product is bought for treatment of any specific disease. Rather, hyaluronic acid, as the literature states, moisturizes the skin “from the inside out”. It does this by helping epidermal tissues retain water for a limited amount of time.
You also argue that the extensive listing of included products in EN 3003, including waters and salts, show that the terms “therapeutic and prophylactic” are meant to be broad and inclusive of substances that are not necessarily thought of as medicaments. We disagree. The example of medicinal waters and salts are not dual use products, as is bulk sodium hyaluronate. The waters and salts listed in the EN are completely prepared in such a way that their medicinal qualities are apparent. That is not the case here. The instant hyaluronic acid is prepared for encapsulization and oral ingestion, but its use is to “moisturize from the inside out.” There is no indication of the ailment or disease it is meant to cure or prevent. The method of advertising, environment of sale, expectations of the ultimate purchaser show that the merchandise is an anti-aging supplement to decrease wrinkles and generally lubricate joints and the skin.
Lastly, EN 3003 excludes products “put up for the purpose of maintaining health or well-being but have no indication as to use for the prevention or treatment of any disease or ailment.” You state that hyaluronic acid is used to treat diseased joints or relieve pain and stiffness associated with ailments of the joints and thus the EN does not exclude the instant merchandise from the heading. Merchandise is classified as imported. The 9% hyaluronic acid mixture imported for encapsulation as an ingestable moisturizer is not the same product as a hyaluronic acid gel prepared for injection into a joint. Furthermore, we do not take the “no indication” language to mean that some minor indication for treatment of disease does not exclude a preparation that is otherwise used for general health and well-being or anti-aging. For instant, Vitamin C tablets are indicated for the treatment of rickets and vitamin D and calcium tablets are indicated for the treatment of osteoporosis, but they are principally used for the general health and well-being of the person ingesting them. This is also the case for the instant 9% hyaluronic acid mixture. Hence, for the reasons set forth above, heading 3003 does not describe the merchandise.
HOLDING:
By application of GRI 1, the classification of the subject 9% hyaluronic acid mixture imported in bulk is in heading 2106, HTSUS, specifically in subheading 2106.90.9998, HTSUS, which provides for: “Food preparations not elsewhere specified or included: Other: Other: Other: Other: Other: Other, Other.” The column one general rate of duty is 6.4 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY R04494, dated August 9, 2006, is affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division