CLA-2 OT:RR:CTF:TCM H192519 ARM
Mr. Joseph J. Chivini
Austin Chemical Company, Inc. 1565 Barclay Boulevard
Buffalo Grove, IL 60089
RE: Revocation of NY G81655 and modification of NY 801521 and NY 801775;
Cyclosporine, CAS #59865-13-3
Dear Mr. Chivini:
This is to inform you that Customs & Border Protection (CBP) has reconsidered New York Ruling letter NY G81655, dated January 24, 2001, regarding the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of cyclosporine (CAS 59865-13-3). CBP classified cyclosporine under subheading 2933.90.90 (now 2933.99.90), which provides for: "[H]eterocyclic compounds with nitrogen hetero-atom(s) only: Other: Other: Other: Drugs." We have also reconsidered (NY) 801521, dated October, 13, 1994, NY 801775, dated October 25, 1994, where we classified the product in subheading 2941.90.10, HTSUS, which provides for: "Antibiotics: Other: Natural: Other."
We have determined that these three rulings are in error with respect to the classification of cyclosporine and that NY R04986, dated October 10, 2006 provides the correct classification for the merchandise in subheading 2933.79.85, HTSUS, which provides for: "Heterocyclic compounds with nitrogen hetero-atom(s) only: Lactams: Other lactams: Other: Other." Therefore, this ruling revokes NY G81655, and modifies NY 801521 and NY 801775 with respect to classification of cyclosporine (CAS 59865-13-3).
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), a notice was published in the CUSTOMS BULLETIN, Volume 49, No. 21, on May 27, 2015, proposing to revoke NY G81655 and to modify NY 801521 and NY 801775 and to revoke any treatment accorded to substantially identical transactions. No comments were received in response to the notice.
FACTS:
Cyclosporine, CAS #59865-13-3, is also known as Cyclosporine A and has the chemical formula C62H111N11O12, and the chemical structure printed below:
In NY G81655, we stated the following:
Cyclosporine is a cyclic peptide, consisting of 11 amino acids, produced as a metabolite by the fungus, Beauveria nivea. It is indicated for use as an immunosuppressant agent for the prevention of organ rejection in kidney, liver, and heart allogeneic transplants (i.e., transplants involving individuals who are antigenically distinct). We note that the International Nonproprietary Name (INN) for Cyclosporine is “Ciclosporin,” which is listed in Table 1 of the Pharmaceutical Appendix to the Tariff Schedule.
A report issued to this office by the U.S. Customs laboratory in New York notes the lack of any evidence in the scientific literature indicating Cyclosporine’s ability to kill other microorganisms or inhibit their growth.
CBP Laboratory Report No. NY20111634S, dated October 7, 2011, a supplement to the report referred to in NY G81655, states, in pertinent part, the following: “In our opinion, Cyclosporine is a Lactam…”
In both NY 801521 and NY 801775 we described cyclosporine as “an antibiotic which is used as an immunosuppressive drug.”
ISSUE:
Whether cyclosporine is classifiable as an antibiotic of heading 2941, and if not, whether when classified by structure, it is a lactam of subheading 2933.79.85.
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. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs 1 through 5.
The HTSUS provisions under consideration are the following:
2933: Heterocyclic compounds with nitrogen hetero-atom(s) only:
Lactams:
2933.79 Other Lactams:
Other:
2933.79.85 Other….
*****
Other:
2933.99 Other:
Other:
2933.99.90 Drugs . . .
* * * * *
2941 Antibiotics:
2941.90 Other:
2941.90.10 Natural . . . .
The EN to heading 2933 states, in pertinent part, the following:
(G) Lactams.
These compounds may be regarded as internal amides analogous to lactones; obtained from amino-acids by elimination of water. The molecules may contain one or more amide functions in a ring. They are known as mono-, di-, trilactams, etc., according to the number of amide functions present.
The EN to heading 2941, HTSUS, 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.
In the1994 NY rulings, we described cyclosporine as an antibiotic that is used as an immunosuppressant. Though originally isolated in 1970 from samples submitted for the screening program for antifungal antibiotics, antifungal activity proved both modest and restricted. Tribe, Henry T., “The Discovery and Development of Cyclosporin”, Mycologist, Volume 12, Part 1, February 1998. (http://www.fungi4schools.org/Reprints/Mycologist_articles/Post-16/Medical/V12pp020-023cyclosporin.pdf).
Furthermore, “no effect was found on tumour cells of mice in vitro, nor on survival of leukaemic mice, these facts indicating that immunosuppression was not linked with general cytotstic activity.” Id. Therefore, cyclosporine has not been shown to inhibit neoplasms or to inhibit pathogenic microorganisms. Rather, cyclosporine is the first line treatment in organ transplants as an immunosuppressant to decrease the chance of rejection of the new organ. Also, the immunosuppressant activity of cyclosporine is now being used to treat autoimmune diseases such as psoriasis, uveitis, rheumatoid arthritis, and others. Id. Therefore, in accordance with the terms of heading 2941, HTSUS, and the EN thereto, cyclosporine is not classifiable as an antibiotic because it does not exhibit antibiotic activity and is not used as such. Hence, it is classified by its structure.
A heterocyclic compound is an organic compound “composed of one or more rings, and which contain in the ring(s), in addition to the carbon atoms, atoms of other elements.” General EN, Subchapter X, Chapter 29, HTSUS. Cyclosporine meets this description, thus it is a heterocyclic compound; as nitrogen is the only element other than carbon found in the ring structure of cyclosporine, it is a “heterocyclic compound with nitrogen hetero-atom(s) only,” properly classified in heading 2933, HTSUS. Furthermore, in accordance with the CBP Laboratory Report, Cyclosporine is a lactam of subheading 2933.79, HTSUS, because the molecules contain one or more amide functions in a ring.
HOLDING:
Cyclosporine, CAS #59865-13-3, is classified in heading 2933, HTSUS. Specifically, the merchandise is classified in subheading 2933.79.85, HTSUS, which provides for: "Heterocyclic compounds with nitrogen hetero-atom(s) only: Lactams: Other lactams: Other: Other." The column one, general rate of duty is free.
Duty rates are provided for the protestant’s 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 G81655 is revoked and NY 801521 and 801775 are modified. 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 Rulings Division
CC: Ms. Joan von Doehren
Interchem Corporation
120 Rt. 17 North, Suite 115
Paramus, NJ 07652
Ms. Iliana Fuller
Allergan, Inc. 2525 Dupont Drive
P.O. Box 19534
Irvine, CA 92623-9534