CLA-2-29:RR:NC:2:239 D81284
Ms. Kathleen Murphy
Katten Muchin & Zavis
525 West Monroe St., Suite 1600
Chicago, IL 60661-3693
RE: The tariff classification of 4'-Sulphonamidophenylhydrazine
(CAS 17852-52-7) from Japan and China.
Dear Ms. Murphy:
In your letter dated July 31, 1998, you requested a tariff
classification ruling for 4'-Sulphonamidophenylhydrazine which you have
stated is used as a chemical intermediate in the production and manufacture
of pharmaceuticals.
You state in your letter that this compound is described in heading
2928.00.2500, Harmonized Tariff Schedule of the United States Annotated
(HTSUSA), under the provision for Organic derivatives of hydrazine or of
hydroxylamine:...Other:...Aromatic, or in heading 29.35, HTS, as a
sulfonamide compound, based on different functional groups in the compound
structure. You assert, first, that the compound is classifiable in
heading 29.28, HTS. You state that the hydrazine moiety in the compound
is "the reactive portion" and that the sulfonamide group remains relatively
inert and unreactive; and, thus, pursuant to GRI 3(b), the classification
of this compound is properly in heading 29.28, HTS.
Alternatively, in the event that the compound is classified in
heading 29.35, HTS, you feel that classification should be in heading
2935.00.6000, HTSUSA, which provides for "Sulfonamides:
...Other...Drugs:...Other. In this latter case, your classification is
supported by your statement that this compound is a chemical intermediate
used in the production of an analgesic/anti-inflammatory agent which, in
turn, is used as a pain reliever in the treatment of arthritis. You note
that this analgesic/anti-inflammatory agent, for which the instant compound
is an intermediary, has not yet been approved by the Food and Drug
Administration and remains an "investigational drug." Noting the decision
in Lonza, Inc. V. United States (46 F.3d 1098 (Fed. Cir, 1995), you would
argue that "a substance is a drug for tariff classification purposes if it
1) possesses therapeutic or medicinal properties,' and 2) is chiefly used
as medicines or as ingredients in medicines.' Id. At 1101-02, citing
Schedule 4, Part 1, subpart C, Headnote 5, TSUS (1963) (emphasis added)."
Finally, should this compound not be classified as a drug in
subheading 2935.00.6000, you believe that it should be classified in the
residual subheading 2935.00.7500, HTSUSA, as
Sulfonamides:...Other:...Other:...Products described in additional U.S.
note 3 to section VI, since the compound is not listed by name or Chemical
Abstracts Services Registration Number in the Chemical Appendix to the
Tariff Schedule, HTSUSA.
As you are aware, the classification of goods in the Harmonized
Tariff Schedule (HTS) is governed by the General Rules of Interpretation
(GRIs), taken in order. GRI 1 requires, in relevant part, that "for legal
purposes, classification shall be determined according to the terms of the
headings and an relative Section or Chapter Notes and, provided such
headings or Notes do not otherwise require, according to the following
provisions:" [following are the remaining GRIs, numbered 2 - 6]. The
classification of the instant compound will be in accordance with GRI 1.
Regarding the classification of this compound under GRI 1, please
note that the first thirty-five headings in Chapter 29 describe the
products provided for therein in terms of various functional groups, which
may be present in the compound structure. The enumerated functional
groups are the primary,--indeed, the exclusive,--criteria for defining the
scope of the individual headings. The concepts of "use" or the relative
reactive properties of these functional groups in a given compound are not
descriptive elements in any of these headings, nor are they conditional to
classification therein. Thus, on the basis of the presence of a hydrazine
derivative in the compound structure, heading 29.28, which provides for
compounds containing such derivatives, may be said to describe the instant
compound. Similarly, because the compound contains a sulfonamide
functional group within its structure, heading 29.35, which provides for
sulfonamide compounds, may be said to describe the instant compound. 4'-sulphonamidophenylhydrazine monohydrochloride, then, is described in these
two headings.
While you suggest the application of GRI 3 to these two headings as
a means of determining a final classification, resorting to GRI 3 would be
inappropriate in the present circumstances. GRI 1 mandates classification
under the terms of the headings and legal notes of the tariff, first, and
only under the remaining GRIs, "provided such headings or notes do not
otherwise require." In the instant case, a Chapter note is determinative
in choosing the heading in which this compound will be classified. Note
3 in Chapter 29, HTSUSA, provides that "goods which could be included in
two or more headings of this chapter are to be classified in that one of
those headings which occurs last in numerical order." Accordingly, 4'-Sulphonamidophenyl-hydrazine monohydrochloride will be classified in
heading 29.35, HTS, as that "heading which occurs last in numerical order."
Regarding classification of this compound as a "drug" in subheading
2935.00.6000, HTSUSA, we believe that this subheading would include only
such products as are approved by the Food and Drug Administration and which
are bought and sold commercially, and principally used, as drugs in the
United States. The instant product, which is in the process of testing for
efficacy and safety prior to approval for marketing in the United States,
would not be considered "drugs" for tariff purposes.
Since this compound is not specially provided for under any
subheading of 29.35, HTS, and is not listed in the Chemical Appendix to the
Tariff, HTSUSA, the applicable subheading will be 2935.00.7500, Harmonized
Tariff Schedule of the United States (HTUSA), which provides for
sulfonamides:...other:...Products described in additional U.S. note 3 to
section VI.. The rate of duty will be 10.7 percent ad valorem.
This ruling is being issued under the provisions of Part 177 of the
Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be
provided with the entry documents filed at the time this merchandise is
imported. If you have any questions regarding the ruling, contact National
Import Specialist Thomas Brady at 212-466-5747.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division