CLA-2 OT:RR:CTF:TCM H044699ARM
Port Director
Port of Los Angeles/Long Beach
U.S. Customs and Border Protection
301 E. Ocean Blvd., Suite 1400 Long Beach, CA 90802
RE: Request for internal Advice 08/028; Omega-3 Fish Oil Capsules
Dear Port Director:
The following is our decision regarding your memorandum dated November 4, 2008, forwarding a request for Internal Advice, initiated by letter dated September 27, 2008, on behalf of AIDP, Inc., regarding the classification of 1000 milligram (mg.) soft gel fish oil capsules imported in bulk under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The instant merchandise consists of soft gel capsules containing 1000 milligrams of fish oil imported in bulk for packaging after importation. The capsules are comprised of gelatin containing eicosapentaenoic acid (EPA) and Docoahexaeonic acid (DHA), d-a-tocopherol, glycerol and water.
The requester provided samples of packaging used by two of its key customers to package the product after importation. One of the labels provided lists the following ingredients: “Fish oil concentrate, gelatin (non-bovine), Glycerin, Water, Tocopherol” and the statement “Contains: Fish (Anchovy, herring, Salmon, Sardine and Sprat) and Soy.” Both products explain that Fish Oil naturally contains the Omega-3 Fatty Acids, EPA and DHA, and that these fatty acids help maintain heart and vascular health. The statements are followed
by the disclaimer “These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease” indicating that the product is marketed in accordance with the Dietary Supplement Health and Education Act of 1994 (21 U.S.C. 301 note) (DSHEA). One of the labels contains the following information on doseage: “Suggested Use: Take on softgel three times daily with a full glass of water, preferably after a meal.” Another brand contains the following directions: “For adults, take two (2) softgels one to two times daily, preferably with meals.”
In response to questions you posed to the importer, counsel for the importer provides a two page manufacturing flowchart entitled “Processing of 30% Triglyceride Fish Oil”. The flowchart states that the crude oil is refined with an alkaline solution of NaOH and water to remove free fatty acids. It is deodorized through molecular distillation which removes the volatile odor compounds and environmental contaminants. The product is cold filtered to remove saturates, bleached with bleaching clay to remove color matters, blended with mixed natural tocopherols to provide antioxidant activity, drummed in 190 kg barrels, warehoused and shipped for encapsulation. The encapsulation process entails heating glycerol and purified water to 75-80°C, stirring gelatin into the mixture and evacuation creating prepared shell materials. After inspection, the fish oil is encapsulated, shaped, dried, inspected, and the finished capsules are packed in bulk and shipped to the U.S. for packaging for retail sale.
ISSUE:
Whether Omega-3 fish oil capsules are classified in heading 1517, HTSUS, as an oil preparation, 2106, HTSUS, as a food supplement, or in 3004, HTSUS, as medicaments.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order.
The HTSUS headings under consideration are as follows:
1517: Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this chapter, other than edible fats or oils or their fractions of heading 1516:
2106: Food preparations not elsewhere specified or included:
3004: Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale:
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The General EN (B) to Chapter 15 states, in pertinent part, the following:
These headings [1507-1515] do not cover edible or inedible mixtures or preparations, or vegetable fats and oils that have been chemically modified (heading 15.16, 15.17 or 15.18, unless they have the character of products classified elsewhere, e.g., in headings 30.03, 30.04, 33.03 to 33.07, 34.03).
EN 30.04 states, in pertinent part, the following:
This heading covers medicaments consisting of mixed or unmixed products, provided they are:
Put up in measured doses or in forms such as tablets, ampoules (for example, re-distilled water, in ampoules of 1.25 to 10 cm3, for use either for the direct treatment of certain diseases, e.g., alcoholism, diabetic coma or as a solvent for the preparation of injectible medicinal solutions), capsules, cachets, drops or pastilles, or small quantities of powder, ready for taking as single doses for therapeutic or prophylactic use. . . . .
The heading applies to such single doses whether in bulk, in packings for retail sale, etc.; or
(b) In packings for retail sale for therapeutic or prophylactic use. This refers to products (for example, sodium bicarbonate and tamarind powder) which, because of their packing and, in particular, the presence of appropriate indications (statement of disease or condition for which they are to be used, method of use or application, statement of dose, etc.) are clearly intended for sale directly to users (private persons, hospitals, etc.) without repacking, for the above purposes.
These indications (in any language) may be given by label, literature or otherwise. However, the mere indication of pharmaceutical or other degree of purity is not alone sufficient to justify classification in this heading.
You note that CBP has previously ruled that fish oil capsules are classifiable under both heading 2106, HTSUS as dietary supplements and in Chapter 15, HTSUS, as fish oil. You state that the glyceride content of the imported fish oil capsules is similar to that in Cap-Fish 18:12 of Headquarter’s Ruling Letter (HQ) 964015, dated January 31, 2002. In HQ 964015, we found that encapsulated fish oil with vitamin E was described by the terms of heading 1517 as a mixture of oil. The deodorization, encapsulation and other processing did not alter its character as an oil described in the chapter. Importer requests evaluation for classification in heading 3004, HTSUS, as a medicament put up in measured doses.
The importer argues that under the court’s decision in Inabata Specialty Chemicals v. United States, 366 F. Supp. 2d 1358 (CIT 2005), the merchandise is used for therapeutic purposes giving it the character of merchandise classified in heading 3004, HTSUS (See General EN (B) to Chapter 15). The merchandise at issue in Inabata was known as Chondroitin Sulfate (“CS”) a bulk powder consisting of processed fish cartilage. The powder was later packaged for retail sale as a dietary supplement and bore the U.S. Food and Drug Administration (“FDA) required disclaimer that "the product is not intended to diagnose, treat, cure or prevent any disease." In holding that the merchandise was classified in subheading 3001.90.00, HTSUS, the provision for: “Glands and other organs for organotherapeutic uses, dried, whether or not powdered; extracts of glands or other organs or of their secretions for organotherapeutic uses; heparin and its salts; other human or animal substances prepared for therapeutic or prophylactic uses, not elsewhere specified or included: Other”, the court stated that:
Tariff classification law relies heavily on commercial practice and understandings. Tariff classifications are mainly about the marketplace. In determining whether a particular item falls within the class or kind of merchandise principally used in the manner described by a tariff heading, the courts have considered the following factors: (1) general physical characteristics; (3) channels of trade in which the merchandise moves; (4) environment of sale; (5) use in the same manner as merchandise which defines the class; (6) economic practicality of so using the imported merchandise; and (7) recognition in the trade of this use. (citations omitted) . . . .
Id. at 1364, citing United States v. The Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2nd 373 (1976).
As heading 3004 and 2106 are principal use provisions, we analyze the instant merchandise under the Carborundum factors below:
(1) The general physical characteristics of the merchandise: The instant merchandise consists of capsules to be put up in bottles. The capsules contain 1000 mg. of fish oil imported in bulk for packaging after importation. The capsules are comprised of gelatin containing eicosapentaenoic acid (EPA) and Docoahexaeonic acid (DHA), d-a-tocopherol, glycerol and water. Both medicaments and dietary supplements physically consist of capsules containing an active standardized ingredient and excipients.
(2) The expectation of the ultimate purchasers: The product is used as a dietary supplement supplying the fatty acids obtained from eating fish. In Maxcell Bioscience, Inc. v. United States, 533 F. Supp. 2d 1261, 1270 (Ct. Int'l Trade 2007), the court states:
[T]he labeling of a product as a dietary supplement is not determinative of its tariff classification. . . . (quoting Inabata Specialty Chemicals v. United States, 29 Ct. Int'l Trade, 366 F. Supp. 2d 1358, 1363-64 (2005) (citations omitted) . . . . However, to say that FDA labeling requirements are not controlling is not to say that they are irrelevant. For example, labeling a product as a "dietary supplement" certainly has an effect on consumers' expectations of that merchandise.
Importer submits evidence of the Qualified Health claim (QHC) approved by the Food and Drug administration (FDA) in 2004 for foods containing omega-3 fatty acids and the 2000 approval of a similar QHC for dietary supplements containing omega-3 fatty acids. The claim reads as follows: “Supportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease.” There is nothing in the claim of a medical nature as to the treatment or prevention of disease. The ultimate purchaser expects that (s)he will get the health benefits related to eating fish by ingesting the capsule and would not expect that the product could diagnose, treat, cure, or prevent any disease. The evidence pertaining to this factor weighs against classification as a medicament.
(3 & 4) The channels of trade in which the merchandise moves and environment of sale: The instant merchandise is imported by AIDP, Inc., which describes itself as “able to meet customer needs while carrying a full line of vitamins, amino acids , minerals, sports nutrients, specialty chemicals and herbal extracts” http://www.aidp.com/about_us.htm. AIDP, Inc. sells vitamins and dietary supplement capsules and tablets such as Co-Enzyme Q10 and L-Carnitine, which have been classified under heading 2106, as dietary supplements (see HQ N007593, dated March 2, 2007). The merchandise is sold over the counter in the dietary supplement section of grocery stores and pharmacies. Furthermore, such raw material vitamin companies specifically do not produce or sell pharmaceuticals or medicaments. Rather, pharmaceutical companies produce and sell these products. Accordingly, the evidence pertaining to this factor indicates that the merchandise should be not be classified as a medicament.
(5) The usage of the merchandise: The merchandise is used as an alternative to ingesting fish. For instance, importer submits evidence from the University of Maryland Medical Center Health Library regarding EPA and DHA. These exhibits state, for instance, that the therapeutic recommendations from diet is 2-3 servings of fatty fish per week or from fish oil supplements 3,000-4,000mg standardized fish oils per day, which corresponds to 2-3 servings of fatty fish per week. http://www.umm.ecu/altmed/articles/eicosapentaenoic-acid-000301.htm. Thus, ingestion of the capsules is interchangeable with that of fatty fish, a food, the sine qua non of a dietary supplement. As such, the daily recommended dosage is not established (see label).
In Warner-Lambert Company v. United States, 28 Ct. Intl. Trade 939; 341 F. Supp. 2d 1272; (Ct. Intl. Trade, June 21, 2004), the court examined the nature of medicaments of heading 3004, HTSUS, by examining the connection between a dose and therapeutic or prophylactic properties. The court stated “A measured dose is not merely a certain amount; it should contemplate an effect there from. Hence, the dose must be viewed as a way to link the properties of a substance with that effect.” Id. at 949, 1280. Based on this reasoning, the court found that the mere fact of a lozenge containing a certain amount of vitamin C did not make the lozenge a medicament of heading 3004, HTSUS. The “suggested use” instructions on the instant merchandise does not constitute a “measured dose” under Warner-Lambert. The suggested use of the merchandise is one capsule three times a day or in other cases two capsules one or two times a day. Therefore, the evidence under this factor mediates against classification as a medicament.
(6) The economic practicality of so using the import: We do not have sufficient information to evaluate this factor.
(7) The recognition in the trade of use: The products contains food products such as fish oil. It is recognized and used in the trade as an alternative to eating fish, and is specifically referred to as a dietary supplement on its packaging.
On balance, we find that the merchandise does not belong to the class or kind of goods known as medicaments of headings 3003 or 3004, HTSUS.
We note that there is conflicting information in the file as to the mono-, di- and tri- glyceride content of the capsules. Verification of the relative percentages of the glyceride content should be ascertained in order to determine the correct classification of the instant merchandise in heading 1517, HTSUS, or in heading 2106, HTSUS, in accordance with HQ 965396, dated July 23, 2002.
HOLDING:
The merchandise, Omega-3 fish oil capsules are not classifiable in headings 3003 or 3004, HTSUS, as medicaments. Verification of the relative percentages of the glyceride content should be ascertained in order to determine the correct classification of the instant merchandise in heading 1517, HTSUS, or in heading 2106, HTSUS, in accordance with HQ 965396, dated July 23, 2002.
You are directed to mail this decision to the internal advice applicant, no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other public methods of distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division