CLA-2-30:OT:RR:NC:N3:138
William Braier
Radix Group International dba DHL Global Forwarding
6120 Ace Industrial Drive
Cudahy, WI 53110
RE: The tariff classification and country of origin of Zovia® 1/35 (Ethynodiol Diacetate and Ethinyl Estradiol Tablets, USP) in dosage form
Dear Mr. Braier:
In your letter dated February 2, 2024, on behalf of Dr. Reddy’s Laboratories, Inc., you requested a tariff classification and country of origin determination ruling.
Zovia® 1/35 (Ethynodiol Diacetate and Ethinyl Estradiol Tablets, USP) is a medicinal preparation containing a combination of Ethynodiol Diacetate (a progestin) and Ethinyl Estradiol (a steroidal estrogen), as the active ingredients. It is indicated for the prevention of pregnancy. The product is a combination oral contraceptive consisting of a cycle of 28 tablets. Each tablet dispenser contains 21 active pale pink tablets containing Ethynodiol Diacetate (1 mg) and Ethinyl Estradiol (0.035 mg) and 7 inactive white tablets containing inert ingredients as a reminder tablet to facilitate ease of drug administration via a 28-day regimen.
The applicable subheading for the Zovia® 1/35 (Ethynodiol Diacetate and Ethinyl Estradiol Tablets, USP) in dosage form will be 3006.60.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Pharmaceutical goods specified in note 4 to this chapter: Chemical contraceptive preparations based on hormones, on other products of heading 2937 or on spermicides.” The rate of duty will be free.
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 at https://hts.usitc.gov/current.
This merchandise may be subject to the Federal Food, Drug, and Cosmetic Act and/or The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which are administered by the U.S. Food and Drug Administration (FDA). Information on the Federal Food, Drug, and Cosmetic Act, as well as The Bioterrorism Act, can be obtained by calling the FDA at 1-888-463-6332, or by visiting their website at www.fda.gov.
You also requested a country of origin determination. You stated that both active pharmaceutical ingredients (APIs), Ethynodiol Diacetate and Ethinyl Estradiol are made in the Netherlands. The finished tablets in dosage form are manufactured in China. In China, the Ethynodiol Diacetate and Ethinyl Estradiol APIs will be mixed with various inactive ingredients to produce the final tablets in dosage form. You suggest that the country of origin remains the Netherlands, the country in which both APIs were manufactured. As explained below, we disagree.
Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines "country of origin" as:
The country of manufacture, production or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of this part; ….
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and National Juice Products Association v. United States, 628 F. Supp. 978 (Ct. Int’l Trade 1986).
In determining whether a substantial transformation occurs in the manufacture of chemical products such as pharmaceuticals, CBP has consistently examined the complexity of the processing and whether the final article retains the essential identity and character of the raw material. To that end, CBP has generally held that the processing of pharmaceutical products from bulk form into measured doses does not result in a substantial transformation of the product. See, e.g., Headquarters Ruling (“HQ”) 561975, dated April 3, 2002; HQ 561544, dated May 1, 2000; HQ 735146, dated November 15, 1993; HQ H267177, dated November 5, 2016; HQ H233356, dated December 26, 2012; and, HQ 561975, dated April 3, 2002. However, where the processing from bulk form into measured doses involves the combination of two or more APIs, and the resulting combination offers additional medicinal benefits compared to taking each API alone, CBP has held that a substantial transformation occurred. See, e.g., HQ 563207, dated June 1, 2005.
In this instance we note that the two APIs serve different purposes. Here, as in HQ 563207, two separate APIs are mixed to create a fixed combination drug that offers additional medicinal benefits compared to taking each API alone.
Ethynodiol Diacetate is a progestin or a synthetic form of the naturally occurring female sex hormone, progesterone. Ethinyl Estradiol is a synthetic estrogen that decreases luteinizing hormone to decrease endometrial vascularization and decreases gonadotrophic hormone to prevent ovulation. Progestin prevents pregnancy and the estrogen controls menstrual bleeding in oral contraceptives.
In this case, we find the mixing of the active ingredients, Ethynodiol Diacetate and Ethinyl Estradiol (both made in Netherlands) with the inactive ingredients into the final dosage tablets in China results in a substantial transformation and the country of origin will be China.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Judy Lee at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division