CLA-2-29:OT:RR:NC:N1:N139/140
Mr. Joseph Issa
Merck & Co.
2000 Galloping Hill Rd
Kenilworth NJ 07033
RE: The tariff classification of Chemical Intermediates from Ireland and China
Dear Mr. Issa:
In your letter dated July 8, 2019 you requested a tariff classification ruling.
The products are as follows:
Item 1
The first product, “Chemical A,” is a proprietary, separate intermediate organic chemical compound in the synthesis of an experimental Alzheimer’s drug in Phase III clinical trials. The country of origin is Ireland. This compound will be imported in noncommercial quantities and will be used solely for quality control testing.
The applicable subheading for the advanced intermediate compound, “Chemical A,” will be 2935.90.7500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Sulfonamides: Other: Other: Other: Products described in additional U.S. note 3 to section VI. The rate of duty will be 6.5 percent ad valorem.
Item 2
The second item at issue consists of “Microwell Plates,” which are plastic plates containing various numbers of individual wells or cells. The country of origin is China. The capacity of each well was not indicated. Each well contains a specific chemical species. The current well under review will contain approximately 50 different chemical species. The various chemical species for each product in the current wells are indicated to contain between 14 to 54 mg of a specific chemical. Chemical names or CAS #’s were not provided for the majority due to the proprietary nature of the chemicals. Chemical structures were provided and have been visually inspected during this review to determine classification.
The chemicals imported in the Microwell Plates are intended for use in pharmaceutical research and drug development. Specifically, they are used as chemical intermediates which will be used to develop future libraries of chemicals with potentially desirable pharmacological properties.
Generally, pure chemical products are provided for under Chapter 29. Chemical compounds present in the wells are classified under the various headings of Chapter 29, depending on their individual chemical structures and specific functional groups. See Note 1 and Note 3 to HTSUS Chapter 29. The 50 chemical products are spread out among several different headings of Chapter 29. Most of the products fall into Headings 2933 and 2934. As a result, no single heading describes the product in its entirety, and the subject merchandise cannot be classified under GRI 1 . The subject merchandise is a composite good of GRI 3(b).
Thus, in order to determine the subject merchandise’s essential character, we examine 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 article. There can be little dispute that the chemicals of the subject Microwell Plates constitute its essential character. They provide the majority of the value and quantity of the subject merchandise, as well as the product’s main purpose (developing a chemical library). Additionally, it is the chemicals that provide the chemical reactions that the importer is analyzing. The container in which they are housed c ould be made of any material. As a result, we classify the subject Microwell Plates according to the chemicals they contain. Although the chemicals in the wells contain a range of products of Chapter 29, the majority by bulk weight consists of nitrogen only heterocyclic compounds of Heading 2933.
By application of GRI 3(b), the subject Microwell Plates are classified under heading 2933, HTSUS. Specifically for the instant product, classification for the Microwell Plate, containing the chemicals cited in the request letter will be under subheading 2933.99.7900, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: “Heterocyclic compounds with nitrogen hetero-atom(s) only: Other: Other: Aromatic or modified aromatic: Other: Other: Products described in additional U.S. note 3 to section VI.” The rate of duty will be 6.5 percent ad valorem.
You also asked for a determination for the instant products for their applicability for duty exemption under SUBCHAPTER XVII OTHER SPECIAL CLASSIFICATION PROVISIONS. Subchapter XVII Note 7 provides that:
7. The following provisions apply to heading 9817.85.01:
(a) For purposes of this subchapter, including heading 9817.85.01, the term "prototypes" means originals or models of articles that-
(i) are either in the preproduction, production, or postproduction stage and are to be used exclusively for development, testing, product evaluation, or quality control purposes; and
(ii) in the case of originals or models of articles that are either in the production or postproduction stage, are associated with a design change from current production (including a refinement, advancement, improvement, development, or quality control in either the product itself or the means for producing the product).
For purposes of clause (i), automobile racing for purse, prize, or commercial competition shall not be considered to be "development, testing, product evaluation, or quality control."
(b) (i) Prototypes may be imported only in limited noncommercial quantities in accordance with industry practice.
(ii) Except as provided for by the Secretary of the Treasury, prototypes or parts of prototypes may not be sold after importation into the United States or be incorporated into other products that are sold.
(c) Articles subject to quantitative restrictions, antidumping orders, or countervailing duty orders may not be classified as prototypes under this note. Articles subject to licensing requirements, or which must comply with laws, rules, or regulations administered by agencies other than the United States Customs Service before being imported, may be classified as prototypes if they comply with all applicable provisions of law and otherwise meet the definition of "prototypes" under paragraph (a).
We find that the imported chemicals are in the pre-production stage, and would be used exclusively for development and testing of new pharmaceuticals, and therefore, met the definition of “prototype” under U.S. Note 7(a)(i) to Subchapter XVII to Chapter 98, HTSUS. They are also imported in “noncommercial quantities” as required by the Note.
Finding that both “Chemical A” and the “Microwell Plates” as imported meet all the requirements of Subchapter XVII, Note 7, it is our opinion that the the imported compounds qualify as prototypes of subheading 9817.85.01, HTSUS. 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 https://hts.usitc.gov/current.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patrick Day at [email protected] for Item 1 or National Import Specialist Paul Hodgkiss at [email protected]. for Item 2.
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division