CLA-2 CO:R:C:S 558002 MLR
Mr. Desmond Flynn
SmithKline Beecham Pharmaceuticals
Imports & Domestic Traffic
One Franklin Plaza
Philadelphia, PA 19102
RE: Applicability of duty exemption under HTSUS subheading
9811.00.60 to pharmaceutical products; 19 CFR 134.46;
patient starter package; not for sale; country of origin
marking
Dear Mr. Flynn:
This is in response to your facsimile of July 13, 1994,
requesting a ruling concerning the country of origin marking and
free entry of pharmaceutical products. A photograph of the
product's container is submitted with your request.
FACTS:
SmithKline Beecham intends to import the newly approved
"FAMVIR", an anti-viral pharmaceutical, into the U.S. You state
that the pharmaceuticals will not be for sale and will be used to
solicit and generate new business. The back of the
pharmaceutical's container contains the words "Patient Starter
Package, NOT FOR SALE." The container also states:
"Manufactured by SmithKline Beecham Pharmaceuticals, Crowley, UK
for SmithKline Beecham Pharmaceuticals, Philadelphia, PA 19101."
In a telephone conversation with a member of my staff, you
indicated that each pharmaceutical is valued at less than $1.00.
You will also be importing similar pharmaceuticals which will be
sold.
ISSUES:
I. Whether the pharmaceutical products are entitled to duty-free treatment under subheading 9811.00.60, HTSUS.
II. What are the country of origin marking requirements for the
pharmaceutical products at issue.
LAW AND ANALYSIS:
I. Subheading 9811.00.60, HTSUS
Subheading 9811.00.60, HTSUS, provides for the free entry of:
[a]ny sample ... valued not over $1 each, or marked,
torn, perforated or otherwise treated so that it is
unsuitable for sale or for use otherwise than as a
sample, to be used in the United States only for
soliciting orders for products of foreign countries.
The controlling factor is whether the importer uses the samples
for the purpose of soliciting purchase orders for foreign
merchandise and the creation of demand for future orders.
In Italian Drug Importing Co. v. United States, 46 Cust. Ct.
243, C.D. 2263 (1961), the court allowed the free entry of
vitamins marked "Sample - not for sale" which were distributed to
physicians without charge for their patients. In Headquarters
Ruling Letter (HRL) 556174 dated December 4, 1991, Customs
determined that tablets imported in vials or blister packages
marked "Sample - not for sale" for the purpose of distributing
them to physicians in order to create a market in the U.S.,
qualified as samples under subheading 9811.00.60, HTSUS.
In this case, although the pharmaceutical products will not
be marked as samples, but instead will be marked "Patient Starter
Package, NOT FOR SALE", they are valued at less than $1.00, and,
therefore, are entitled to free entry under subheading
9811.00.60, HTSUS, if they are not for sale and are only used as
samples for soliciting orders for products of foreign countries.
II. Country of Origin Marking
The marking statute, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304) provides that, unless excepted, every
article of foreign origin imported into the U.S. shall be marked
in a conspicuous place as legibly, indelibly, and permanently as
the nature of the article will permit, in such a manner as to
indicate to the ultimate purchaser in the U.S. the English name
of the country of origin of the article. Congressional intent in
enacting 19 U.S.C. 1304 was "that the ultimate purchaser should
be able to know by an inspection of the marking on the imported
goods the country of which the goods is the product. The evident
purpose is to mark the goods so that at the time of purchase the
ultimate purchaser may, by knowing where the goods were produced,
be able to buy or refuse to buy them, if such marking should
influence his will." United States v. Friedlaender & Co. Inc.,
27 CCPA 297, 302, C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of
19 U.S.C. 1304. In this case, the U.S. reference "Philadelphia,
PA" on the back of the container triggers the requirements of 19
CFR 134.46, which requires that if the name of any city or
locality in the U.S., or the name of any foreign country or
locality other than the country or locality in which the article
was manufactured or produced, appears on an imported article or
its container, there shall appear, legibly and permanently, in
close proximity to such words, letters or name, and in at least a
comparable size, the name of the country of origin preceded by
"Made in," "Product of" or other words of similar meaning. The
purpose of this section is to prevent the possibility of
misleading or deceiving the ultimate purchaser as to the actual
origin of the imported good.
It is our opinion that the requirements of 19 CFR 134.46 are
satisfied, in that, the country of origin is in the same size and
in close proximity to the U.S. reference. However, for future
importations, the phrase "Manufactured by SmithKline Beecham
Pharmaceuticals, Crowley, UK for SmithKline Beecham
Pharmaceuticals, Philadelphia, PA 19101," should be revised to
read: "Manufactured in Crowley, UK by SmithKline Beecham
Pharmaceuticals, for SmithKline Beecham Pharmaceuticals,
Philadelphia, PA 19101." This will make it more clear that the
pharmaceuticals are, in fact, made in the UK. Currently, it is
only apparent that the manufacturer, SmithKline Beecham, is
located in Crowley, UK.
HOLDING:
Based on the information submitted, the pharmaceutical
products, marked "Patient Starter Package, NOT FOR SALE" and each
valued at less than $1.00, are entitled to free entry under
subheading 9811.00.60, HTSUS, if they are not for sale and are
only used as samples for soliciting orders for products of
foreign countries. Furthermore, the pharmaceutical product is
marked to satisfy the requirements of 19 U.S.C. 1304; however,
for future importations, the country of origin marking should
read: "Manufactured in Crowley, UK by SmithKline Beecham
Pharmaceuticals, for SmithKline Beecham Pharmaceuticals,
Philadelphia, PA 19101."
Sincerely,
John Durant, Director
Commercial Rulings Division