OT:RR:CTF:TCM H243931 ALS
Mr. Eamon Doran
Customs & Trade Manager
AstraZeneca Pharmaceuticals, LP
1800 Concord Pike
P.O. Box 15437
Wilmington, Delaware 19850-5437
RE: Country of Origin Marking; Ultimate Purchaser; Marking Samples not Intended for Retail; J-List Article; 19 U.S.C. § 1304; 19 CFR 134.1(d)(1); 19 CFR 134.25; 19 CFR 134.33
Dear Mr. Doran:
This letter is in reply to your request for a ruling regarding the “correct determination of the ultimate purchaser for prescription drugs” that physicians provide to patients “as free samples” and the applicable country of origin marking and labeling requirements. Our ruling is set forth below.
FACTS:
Your company is proposing to import various pharmaceutical drugs that will be provided to physicians who in turn will provide them to their patients as free samples “as part of their treatment therapy.” The drugs are to be imported in bulk in drums, and then will be packaged as samples at your company’s facility. The packaging will vary and will depend on the particular drug involved. The countries of origin might vary depending on the drug and sometimes within the same drug line. The packaged and labeled drugs are distributed to physicians either by their request or by your company’s initiative.
ISSUES:
Is the physician or the patient the ultimate purchaser of the subject drug samples pursuant to 19 CFR 134.1(d), and what are the applicable country of origin marking requirements for such samples?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting section 1304 was that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of origin of the goods. "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., 27 C.C.P.A. 297 at 302 (1940).
Part 134, Customs and Border Protection (CBP) Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Pursuant to 19 CFR 134.41(b), the ultimate purchaser in the United States must be able to find the marking easily and read it without strain. Section 134.1(d) defines the ultimate purchaser as generally the last person in the United States who will receive the article in the form in which it was imported.
Generally, if an imported article is distributed as a gift, the recipient is the ultimate purchaser, unless the article is a product of a North American Free Trade Agreement signatory country, which would be either Canada or Mexico. See Headquarters Ruling Letter (HQ) 559788 (May 13, 1996); see also 19 CFR 134.1(d)(4).
However, Customs has ruled that in certain circumstances, such as when the imported article is given to the recipient as part of a service, the recipient of the article is not the ultimate purchaser. Rather, the ultimate purchaser of the imported article is the party who distributes the article to the recipient. In HQ 734232 (November 20, 1991), CBP considered a pharmaceutical drug from Italy, which was packaged in ampules for intravenous use and only dispensed by doctors and nurses. The ultimate purchaser was determined to be the hospital pharmacy and, therefore, it was appropriate if only the 5-pack packages of ampules in which the pharmacy received the drug were marked with the country of origin. In HQ 734524 (July 30, 1992), CBP found an airline to be the ultimate purchaser of frozen meals served to passengers.
Similar to the cases cited above, the service being provided in this case is the primary focus of the transaction between the medical professional and the patients, not the drugs themselves. It is our opinion that a patient's principal reason for going to the medical professional is to receive the medical service, whether or not the drugs are distributed them. Therefore, consistent with HQ 734232 and HQ 734524, we find that the medical professional who distributes the drugs to patients in the course of providing medical services to the patients is the ultimate purchaser of such drugs.
As we have previously ruled, drugs “are exempt from individual marking by virtue of 19 U.S.C. § 1304(a)(3)(J) and [19 CFR 134.33], since ‘Chemicals, drugs, medicinal, and similar substances, when imported in capsules, pills, tablets, lozenges, or troches’ are J-List articles. Articles on the J-List are exempt from individual marking, however the outermost container that ordinarily reaches the ultimate purchaser of a J-List article must be marked with the country of origin of the article.” HQ 731640 (April 20, 1989); see also HQ H240193 (July 29, 2013). Thus, while the drugs in this case need not be individually marked, the drugs need to be repacked and properly marked with the country of origin before being sold to the ultimate purchaser, which in this case is the medical professional.
Of the nine distinct samples sent to us, six of them are repackaged in outer boxes that are clearly marked with the country of origin as “Product of _____,” with the particular country of origin filling in the blank, and various inner packaging. Of these six, only one of these repackaged sample products is not also marked with the country of origin on its inner packaging. The one that is not so marked consists of an inner package of pills that are contained in individual plastic bubbles that are bonded to a foil backing. The pills are dispensed by being pushed through the foil backing. Each of the remaining three samples consists of a number of pills loosely packaged in a plastic bottle with a child-tamper-proof screw top, with no outer packaging. Each of those three samples is clearly marked with the country of origin. All of the nine samples are conspicuously marked with either “PROFESSIONAL SAMPLE – NOT FOR SALE” or “PHYSICIAN’S SAMPLE – NOT FOR SALE” on the outermost packaging.
Pursuant to 19 CFR 134.25(a), the following certification must be included with “the appropriate entry document or invoice” and filed at the port of importation if the imported good is a J-List article that is to be repacked before being sold to the ultimate purchaser:
Certification requirements.
Certificate of Marking—Repacked J-List Articles and Articles Incapable of Being Marked
(Port of entry)______________________________________________________
I, of , certify that if the article(s) covered by this entry (entry no.(s) dated), is (are) repacked in a new container(s), while still in my possession, the new containers, unless excepted, shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the container(s) will permit, in such manner as to indicate the country of origin of the article(s) to the ultimate purchaser(s) in accordance with the requirements of 19 U.S.C. 1304 and 19 CFR part 134. I further certify that if the article(s) is (are) intended to be sold or transferred by me to a subsequent purchaser or repacker, I will notify such purchaser or transferee, in writing, at the time of sale or transfer, of the marking requirements.
Date_________________________________________
Importer______________________________________
Since each of the articles at issue will not be imported in its final, properly marked packaging, the importer shall certify to the port director, “at the time of the entry summary” or as otherwise provided for in accordance with 19 CFR 134.25(c), that such will be repackaged in accordance with 19 CFR 134.25(a). Provided that the ultimate purchaser receives the repackaged drugs as described in the previous paragraph, each of the samples discussed herein is properly marked with the country of origin pursuant to 19 U.S.C. 1304 and 19 CFR Part 134.
HOLDING:
The ultimate purchaser of the pharmaceutical drugs in this case is the medical professional who receives them marked with the country of origin in accordance with 19 U.S.C. § 1304 and 19 CFR 134.
The pharmaceutical drugs are not required to be individually marked upon importation per 19 CFR 134.33. However, the bulk containers must be marked with the country of origin of their contents, which must be repacked and marked with the country of origin before sold to the ultimate purchaser, and the importer must certify such to the port director in accordance with 19 CFR 134.25(a) and (c).
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classification & Marking Branch