Mr. Matthew Bock,
Middleton Shrull & Bock, LLC
100 Tradecenter Drive, Suite 660
Woburn, Massachusetts 01801
RE: The tariff classification of Chemical Compounds from China
Dear Mr. Bock:
This replaces Ruling Number N313376, dated July 21, 2020, which contained a clerical error. The paragraph pertaining to the eligibility of the individual chemical components, for prototype designation, contained erroneous and incomplete information. A complete corrected ruling follows.
In your letter dated June 17, 2020, and your resubmission dated July 21, 2020, you requested a tariff classification ruling on behalf of your client, Vergent Bioscience, Inc.
Request for a binding ruling concerning the Harmonized Tariff Schedule of the United States (HTSUS) classification of three (3) chemical compounds and one (1) imaging drug, and the applicability of the 9817.85.01, HTSUS, prototype duty exemption to the importation of such articles.
The four products identified in your request and resubmission are: 1)VGT-013, 2) IRDye QC-1, 3) the molecule commonly referred to as ICG (indocyanine green), and 4) VGT-309. You also requested a classification on the pharmaceutical preparation, which may eventually be used as an intravenous injectable.
You suggest subheading 3204.16.3000, HTSUS for products IRDye QC-1 and ICG. However, you state that there is no synthetic coloring matter in these products; therefore, classification in subheading 3204.16 is precluded. You have also stated that the molecules in these products are reactive luminophores and produce a fluorescent effect when activated.
The applicable subheading for IRDye QC-1 and ICG will be 3204.90.0000, HTSUS, which provides for “Synthetic organic coloring matter, whether or not chemically defined; preparations as specified in note 3 to this chapter based on synthetic organic coloring matter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined: Other.” The general rate of duty will be 5.9 percent ad valorem. The general rate of duty will be 5.9 percent ad valorem.
Regarding the classification for VGT-013, the applicable subheading, if imported as a chemically pure organic compound, will be 2924.29.7100. HTSUS, which provides for: “Carboxyamide-function compounds; amide function compounds of carbonic acid: Cyclic amides (including cyclic carbamates) and their derivatives; salts thereof: Other:Aromatic: Other:” The general rate of duty will be 6.5 Percent ad valorem.
Regarding the classification for VGT-309, if imported as a chemically pure organic compound, will be 2933.99.7900, 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.
Regarding the VGT-309, you state that it will be imported as a formulated pharmaceutical mixture, containing the active ingredient (VGT-309), and mixed with various other ingredients. In your letter, you state the VGT-309 is identified as the “Probe” and it is currently undergoing development as a tumor-targeting imaging drug that binds to tumor cells and fluoresces. Specifically, the Probe binds to enzymes that are overexpressed in tumor tissue, activating a brightly fluorescing dye. This proprietary Probe can identify and bind to multiple cancers including lung, breast, ovarian, colorectal, and brain, among others. When injected prior to surgery, the Probe “lights up” cancerous tissue and gives the surgeon a clear visual guide for the removal procedure.
The applicable subheading for the VGT-309 (Probe) will be 3006.30.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Pharmaceutical goods specified in note 4 to this chapter: Opacifying preparations for X-ray examinations; diagnostic reagents designed to be administered to the patient: Other.” The rate of duty will be free.
Effective July 6, 2018, the Office of the United States Trade Representative imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20([x]), HTSUS. For additional information see “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). Products of China that are provided for in subheading 9903.88.03 and classified in one of the subheadings enumerated in U.S. note 20([x]) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by subheading 9903.88.03.
Products of China classified under subheadings 2924.29.7100, or 3204.90.0000, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheadings 2924.29.7100, or 3204.90.0000, HTSUS, listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
You also asked if the subject merchandise might be eligible for subheading 9817.85.01; HTSUS, prototype duty exemption,
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).
9817.85.01 Prototypes to be used exclusively for development, testing, product evaluation, or quality control purposes.
It is our opinion that as the individual chemical products (IRDye QC-1 and ICG ) are neither “originals” nor models, that is to say, they are preexisting chemical products, and not novel or developed specifically for their current purpose, they do not meet the definition of a prototype for Tariff purposes.
Regarding VGT-013 and VGT-309, the products indicated to have been “currently manufactured,” are actually new (“novel”) chemicals specifically designed and manufactured for development and testing for development of a tumor tissue marker for use during surgery.
It is our opinion that VGT-013 and VGT-309 are “used in the preproduction, production, or postproduction stage and are to be used exclusively for development, testing, product evaluation, or quality control purposes,” meeting the definition of novel, and developed specifically for purposes defined in the prototype subheading 9817.85.01 and will be eligible for entry under 9817.85.01 if also meeting the other parameters of the Note.
The injectable product may be considered a prototype and eligible for entry under 9817.85.01 if meeting the other parameters of the Note, as it represents a novel combination of the raw chemical products for testing purposes. However, we note that it is already entered under a duty free provision.
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 World Wide Web 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.
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 Paul Hodgkiss at [email protected]; for issues relating to products of Chapter 30 contact National Import Specialist Judy Lee at [email protected]; for issues related to Chapter 32 contact National Import Specialist Nuccio Fera at [email protected].
Steven A. Mack
National Commodity Specialist Division