CLA–2 RR:CTF:TCM 967895 KSH
Carl D. Cammarata, Esq.
Law Offices of George R. Tuttle
Three Embarcadero Center, Suite 1160
San Francisco, CA 94111
RE: Revocation of New York Ruling Letter (NY) R00794, dated September 16,
2004; Classification of Everolimus.
Dear Mr. Cammarata:
This is in response to your letter of August 15, 2005, on behalf of your client Guidant Corporation, in which you request reconsideration of New York Ruling Letter (NY) R00794, issued on September 16, 2004, concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of Everolimus. Everolimus was classified in subheading 2934.99.4700, HTSUS, which provides for “Nucleic acids and their salts, whether or not chemically defined; other heterocyclic compounds: Other: Other: Other: Drugs.’’ You assert that because the merchandise at issue exhibits antifungal properties, it is classified in subheading 2941.90.5000, HTSUS, which provides for ‘‘Antibiotics: Other: Other: Other.’’ In accordance with your request for reconsideration of NY R00794, CBP has reviewed the classification of this item and has determined that the cited ruling is in error.
FACTS:
Everolimus is a macrocycylic lactone immunosuppressive drug being investigated for use in reducing graft vasculopathy. Everolimus is a semisynthetic derivative of Rapamycin, currently known as Sirolimus. It is an organic compound which is stabilized with a second antioxidant organic compound. As such, Everolimus is a mixture of two organic compounds.
ISSUE:
Whether Everolimus is classified as an other heterocyclic compound of heading 2934, HTSUS, or as an antibiotic of heading 2941, HTSUS.
LAW AND ANALYSIS:
Classification of goods under the HTSUSA 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 GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (E.N.), constitute the official interpretation at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings.
Although Everolimus is a mixture of two organic compounds, Note 1 to Chapter 29, HTSUS, states that Chapter 29, HTSUS, includes single compounds with an added stabilizer. Inasmuch as the second compound is a stabilizer, a determination whether classification in Chapter 29, HTSUS, is proper is warranted.
Heading 2941, HTSUS, provides for antibiotics. The E.N. to 2941 states in relevant part:
Antibiotics are substances secreted by living micro-organisms which have the effect of killing other micro-organisms or inhibiting their growth. They are used principally for their powerful inhibitory effect on pathogenic micro-organisms, particularly bacteria or fungi, or in some cases on neoplasms. They can be effective at a concentration of a few micrograms per ml in the blood.
In Lonza, Inc. v. U.S., 46 F.3d 1098 (Fed. Cir. 1995), the court stated that “antibiotics are commonly understood to mean substances, produced either naturally or synthetically, that exhibit an ability to kill or inhibit the growth of microorganisms.” Id.
You have submitted additional information in your request for reconsideration which was not included in your original request that evidences that Everolimus is an antibiotic that has bacteriostatic properties that kill or inhibit the growth of microorganisms.
Based on this additional evidence, Everolimus is prima facie classifiable in heading 2941, HTUS, and heading 2934, HTSUS. However, Note 3 to Chapter 29, HTSUS, states:
Goods which could be included in two or more of the headings of this chapter are to be classified in that one of those headings which occurs last in numerical order.
In accordance with Note 3 to Chapter 29, HTSUS, the E.N. to 2941, HTSUS, and Lonza, supra, Everolimus is classified in subheading 2941.90.5000, HTSUS.
HOLDING:
Everolimus is classified in subheading 2941.90.5000, HTSUS, which provides for ‘‘Antibiotics: Other: Other: Other.’’ The general column one rate of duty is 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 the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY R00794, dated September 16, 2004, is hereby revoked.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division