CLA-2-98:OT:RR:NC:2:238
Mr. Matthew Englesbe
Hoffmann-La Roche, Inc.
340 Kingsland Street
Nutley, NJ 07110-1199
RE: The tariff classification of Organic Compounds for Pharmaceutical Research primarily from Switzerland
Dear Mr. Englesbe:
In your letter dated November 8, 2010, you requested a tariff classification ruling that certain organic chemical compounds imported by Hoffmann-La Roche are eligible for classification as prototypes under heading 9817.85.01, Harmonized Tariff Schedule of the United States (HTSUS).
The merchandise consists of unique organic compounds used exclusively in the early stage of drug discovery. These compounds are generally imported in small amounts in well plates of various sizes (e.g., 96 well plates, 384 well plates and 1275 well plates, etc.), or in sets of vials (e.g., 16 vials or 78 vials, etc.). After importation, the compounds are tested in vitro by Hoffmann-La Roche to determine if they possess properties that may be of interest for further pharmaceutical research and development. These compounds are in the preproduction stage and imported only in limited, noncommercial quantities that will never be sold or incorporated into products that are sold following importation into the United States.
Pursuant to §1433 of the Product Development and Testing Act of 2000 (PDTA), enacted as part of the Tariff Suspension and Trade Act of 2000 (Public Law 106-476), and modified, effective February 3, 2007, by Presidential Proclamation 8596, articles classified as "prototypes" under the Act may be imported duty-free. To provide for duty-free entry of prototypes, §1433 of the PDTA inserted a new subheading 9817.85.01 in Subchapter XVII of Chapter 98, HTSUS, which reads: “Prototypes to be used exclusively for development, testing, product evaluation, or quality control purposes.” The PDTA also added a new U.S. Note 6 (subsequently renumbered as U.S. Note 7) in Subchapter XVII of Chapter 98, HTSUS. This note defines "prototypes" for the purposes of subheading 9817.85.01, HTSUS, and sets forth certain conditions and limitations governing classification in the subheading. Specifically, U.S. Note 7 provides the following: For purposes of this subchapter, including heading 9817.85.01, the term "prototypes" means originals or models of articles that (a)(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 (a)(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).
Additionally, (b)(i) Prototypes may be imported only in limited noncommercial quantities in accordance with industry practice. (b)(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. Finally, (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).
As set forth in your submission, the imported organic compounds are to be tested by Hoffmann-La Roche to determine whether they have properties that are of interest for further pharmaceutical research. Such use of the imported organic compounds is within the scope of “development,” “testing,” “product evaluation,” or all of the foregoing, as provided in subheading 9817.85.01, HTSUS. You represent that these imported materials are imported to be used exclusively for these purposes. Accordingly, it may be concluded that these imported organic compounds are described in the legal text of subheading 9817.85.01, HTSUS. The importations also satisfy the applicable terms of U.S. Note 7 (a) and (b) to subchapter XVII of Chapter 98, HTSUS. No information has been submitted by you concerning the status of the imported compounds under subparagraph (c) of Note 7. Accordingly, this ruling is issued on the assumption that the terms of subparagraph (c) of Note 7 will have been met.
The applicable subheading for the Organic Compounds for Pharmaceutical Research in well plates or in vials will be 9817.85.01, HTSUS, which provides for “Prototypes to be used exclusively for development, testing, product evaluation, or quality control purposes.” The duty rate 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 on World Wide Web at http://www.usitc.gov/tata/hts/.
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 Harvey Kuperstein at (646) 733-3033.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division