CLA–2 OT:RR:CTF:TCM H128138 AMM
Ms. Kimberly A. Carlson, Esq.
Katten Muchin Zavis Rosenman
525 West Monroe St, Suite 1600
Chicago, IIL 60661-3693
Mr. Joseph Chivini
Austin Chemical Company, Inc.
1565 Barclay Blvd
Buffalo Grove, IL 60089
RE: Revocation of New York Ruling Letters J80608 and M84902; classification of antibiotic drug Telithromycin
Dear Ms. Carlson and Mr. Chivini,
This is in regard to New York Ruling Letter (NY) J80608, issued to Ms. Carlson on February 7, 2003, and NY M84902, issued to Mr. Chivini on July 17, 2006, regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of the antibiotic drug Telithromycin. In both NY J80608 and NY M84902, Customs and Border Protection (CBP) classified Telithromycin under subheading 2941.50.00, HTSUS, as an Erythromycin derivative. We have reconsidered these rulings and have determined that Telithromycin is provided for in subheading 2941.90.30, HTSUS, as an other antibiotic.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to revoke NY J80608 and NY M84902 was published on May 11, 2011, in Volume 45, Number 20, of the Customs Bulletin. CBP received no comments in response to this notice.
FACTS:
Telithromycin (CAS-191114-48-4) is described in the technical literature as a semisynthetic derivative of Erythromycin (CAS-114-07-8), a naturally occurring macrolide antibiotic. In structure, the central skeleton of Erythromycin consists of a 14-membered lactone ring (13-ethyl-13-tridecanolide) with ten asymmetric centers, and two linked sugars. The first sugar can be either L-Cladinose or L-Mycarose. The second sugar is D-Desosamine. Telithromycin differs chemically from Erythromycin in two ways. First, there is no L-Cladinose or L-Mycarose attached to the lactone ring. It is replaced with a ketogroup. Second, there is a carbamate ring attached to the side of the lactone ring. The nitrogen molecule of this carbamate ring is attached to a propyl alkyl, which is in turn attached to an imidazole ring, and finally to a pyridine ring.
ISSUE:
Is the antibiotic drug Telithromycin properly classified under subheading 2941.50.00, HTSUS, which provides for: “Antibiotics: Erythromycin and its derivatives; salts thereof”, or under subheading 2941.90.30, HTSUS, as “Antibiotics: Other: Other: Aromatic or modified”?
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 2 through 6 may then be applied in order.
The 2011 HTSUS provisions at issue are as follows:
2941 Antibiotics:
2941.50.00 Erythromycin and its derivatives; salts thereof
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2941 Antibiotics:
2941.90 Other:
Other:
2941.90.30 Aromatic or modified aromatic
Additional U.S. Note 2(b) to Section VI (which covers Chapter 29), HTSUS, states:
For the purposes of the tariff schedule:
* * *
(b) The term “modified aromatic” describes a molecular structure having at least one six-membered heterocyclic ring which contains at least four carbon atoms and having an arrangement of molecular bonds as in the benzene ring or in the quinone ring, but does not include any such molecular structure in which one or more pyrimidine rings are the only modified aromatic rings present;
* * *
Note 1(a) to Chapter 29, HTSUS, states, in pertinent part: “Except where the context otherwise requires, the headings of this chapter apply only to: (a) Separate chemically defined organic compounds, whether or not containing impurities …”.
Subheading Note 1 to Chapter 29, HTSUS, states:
Within any one heading of this chapter, derivatives of a chemical compound (or group of chemical compounds) are to be classified in the same subheading as that compound (or group of compounds) provided that they are not more specifically covered by any other subheading and that there is no residual subheading named ‘Other’ in the series of subheadings concerned.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. It is CBP’s practice to consult, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to Heading 29.41 states, in pertinent part, the following: “In this heading, the term ‘derivatives’ refers to active antibiotic compounds which could be obtained from a compound of this heading and which retain the essential characteristics of the parent compound, including its basic chemical structure.”
The EN to Subheading 2941.50 states, in pertinent part:
Erythromycin derivatives are active antibiotics whose molecules contain the following constituents of the erythromycin skeleton: 13-ethyl-13-tridecanolide with linked desosamine and mycarose (or cladinose). Esters are also considered as derivatives. This subheading includes, inter alia, clarithromycin (INN) and dirithromycin (INN). However, azithromycin (INN) which contains a 15-atom central ring and picromycin which contains no cladinose or mycarose, are not regarded as erythromycin derivatives.
There is no dispute that Telithromycin is classified in heading 2941, HTSUS. Rather, the issue is the proper 8-digit national tariff rate that is applicable. As a result, GRI 6 applies.
GRI 6 states: For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
Telithromycin is an antibiotic, and the technical literature describes it as a semi-synthetic derivative of Erythromycin. Classification of derivatives proceeds under Subheading Note 1 of Chapter 29, HTSUS. Here, derivatives are specifically covered by subheading 2941.50, so the definition of the word “derivative” is at issue.
The word “derivative” is not specifically defined in Chapter 29 of the HTSUS. “Derivative” is “a term used in organic chemistry to express the relation between certain known or hypothetical substances and the compound formed from them by simple chemical processes in which the nucleus or skeleton of the parent substance exists.” Van Nostrand’s Scientific Encyclopedia, 5th Edition, 2005, p. 475. Under the EN for Heading 29.41, a derivative must “retain the essential characteristics of the parent compound, including its basic chemical structure.”
Erythromycin’s basic chemical structure contains a 14-member lactone ring and two linked sugars. The first sugar is either mycarose or cladinose. The second sugar is desosamine. See EN to Subheading 2941.50. Telithromycin’s chemical structure is similar, but it contains only one of the linked sugars. The mycarose/cladinose sugar has been removed, and replaced with a single oxygen atom. Telithromycin no longer contains the nucleus or skeleton of the parent substance, as specified in Van Nostrand’s Encyclopedia, nor the parent compound’s basic chemical structure, in accordance with EN 29.41, because the mycarose/cladinose group has been removed.
The EN to Subheading 2941.50 does not specifically exclude Telithromycin from classification as an Erythromycin derivative. However, EN 2941.50 states that Picromycin is not a derivative of Erythromycin for tariff purposes, because it contains no cladinose or mycarose. Telithromycin and Picromycin are the same in that respect. Therefore, Telithromycin is likewise not a derivative of Erythromycin for tariff purposes.
Telithromycin contains a pyridine ring, which is a six member cyclic compound similar to benzene. Where benzene contains six carbon atoms and 6 hydrogen atoms, pyridine contains five carbon atoms, five hydrogen atoms, and one nitrogen atom. Thus, Telithromycin meets the definition of “modified aromatic” contained in Additional U.S. Note 2(b) to Section VI, HTSUS, in that it contains a six-membered heterocyclic ring which contains at least four carbon atoms and having an arrangement of molecular bonds as in the benzene ring. Telithromycin is properly classified under heading 2941, HTSUS, specifically under subheading 2941.90.30, HTSUS, which provides for: “Antibiotics: Other: Other: Aromatic or modified aromatic”. It should be noted that pyridine and pyrimidine (which is excluded from the definition of modified aromatic compounds) are two different molecules.
HOLDING:
By application of GRI 6, the antibiotic drug product Telithromycin is classified in subheading 2941.90.30, HTSUS, which provides for: “Antibiotics: Other: Other: Aromatic or modified aromatic”. The rate of duty is free. Duty rates are provided for your convenience and are subject to change.
EFFECT ON OTHER RULINGS:
New York Ruling Letter J80608, dated February 7, 2003, and NY M84902, dated July 17, 2006, are hereby REVOKED.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division