CLA-2:OT:RR:NC:N3:138
Carol M. Shelsy
Euro-American Air Freight Forwarding Co., Inc.
375 Airport Drive, Bldg. #5
Worcester, MA 01602
RE: The country of origin of ELYXYB™ (Celecoxib) oral solution
Dear Ms. Shelsy:
In your letter dated May 12, 2022, you requested a country of origin ruling determination on behalf of your client, BioDelivery Sciences International, Inc., regarding ELYXYB™ (Celecoxib) oral solution. ELYXYB™ (Celecoxib) oral solution, imported in 120 mg/ 4.8 mL (25 mg/mL), is a nonsteroidal anti-inflammatory drug indicated for the acute treatment of migraine with or without aura in adults.
You stated that the active pharmaceutical ingredient (API), Celecoxib, is manufactured in India and exported to Canada for processing into the final oral solution in dosage form. You further state, the ELYXYB™ manufacturing process performed in Canada transforms the Celecoxib API solid state drug substance into a lipid solubilized medicament that significantly improves the solubility and subsequent bioavailability of celecoxib.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
The "country of origin" is defined in 19 CFR 134.1(b) as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin.”
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11. Applied in sequential order, 19 CFR Part 102.11(a) provides that the country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
19 C.F.R. § 102.20, Rule 3004.90 provides:
A change to subheading 3004.90 from any other subheading, except from subheading 3003.90 or 3006.80, and provided that the domestic content of the therapeutic or prophylactic component is no less than 40 percent by weight of the total therapeutic or prophylactic content. Section 102.11(a)(1) and 102.11(a)(2) cannot be used to determine the country of origin of the Celecoxib oral solutions because the solution is neither wholly obtained or produced in Canada, nor is it produced exclusively from domestic (Canadian) materials. See section 102.1(d) (“‘Domestic material’ means a material whose country of origin as determined under these rules is the same country as the country in which the good was produced.”). Further, because the oral solution is formulated in Canada but the therapeutic component of the oral solution, the API, is not of Canadian origin, the rule for subheading 3004.90 is not met because the 40 percent domestic content requirement is not satisfied. Therefore, the country of origin for marking purposes cannot be determined under section 102.11(a).
19 C.F.R. § 102.11 (b) provides, in relevant part:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
(1) The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good.
Section 102.18(b)(iii) states, in pertinent part:
For purposes of identifying the material that imparts the essential character to a good under § 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the §102.20 specific rule or other requirements applicable to the good.
If there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed under the § 102.20 specific rule or other requirements applicable to the good, then that material will represent the single material that imparts the essential character to the good under § 102.11.
As previously stated, the section 102.20 specific rule for subheading 3004.90 requires that the therapeutic or prophylactic component in the final product be at least 40 percent domestic. The API in Celecoxib oral solution cannot meet the requirements of the tariff shift rule because it has no domestic (Canadian) content.
In this case, the essential character of ELYXYB™ (Celecoxib) oral solution is the Indian-origin API, because the API is the only ingredient that is not allowed to change tariff classifications under the section 102.20 rule. See 102.18(b)(1)(iii). Applying the provisions of section 102.11(b)(1), we find that the country of origin of ELYXYB™ (Celecoxib) oral solution for marking purposes is India.
You have also included a sample with the labels marked with a sticker indicating, “Mfg. in Canada, API from India” which appears to be incorrect since the country of origin is India, where the API is manufactured and should be marked “Made in”,” Product of,” or other words of similar meaning with “India” as the country of origin. It is also acceptable to mark the product with Celecoxib oral solution as “Made in India, formulated in Canada”.
This merchandise may be subject to the Federal Food, Drug, and Cosmetic Act and/or The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which are administered by the U.S. Food and Drug Administration (FDA). Information on the Federal Food, Drug, and Cosmetic Act, as well as The Bioterrorism Act, can be obtained by calling the FDA at 1-888-463-6332, or by visiting their website at www.fda.gov.
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 Judy Lee at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division