HQ 0088813 - Classification of MP-633 and Ioversol - United States International Trade Commision Rulings

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HQ 088813

August 26, 1991

CLA-2 CO:R:C:F 088813 EAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 2924.29.4400

Matthew T. McGrath, Esquire
Barnes, Richardson & Colburn
1819 H Street, N.S.
Washington, D.C. 20006

RE: Classification of MP-633 and Ioversol

Dear Mr. McGrath:

This is in reply to your letter dated April 11, 1991, in which you requested on behalf of Mallinckrodt Medical, Inc., a binding ruling on the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of two organic chemical compounds, MP-633 and Ioversol. You requested confidential treatment of the chemical structure and chemical name of compound MP-633, asserting under 5 U.S.C. 552(b)(4) that each is a trade secret and any publication of either may cause severe harm to your client's competitive position. By your letter dated May 21, 1991, "The claim for confidentiality of information relating to the chemical name, chemical structure, and descriptions of improvements in the structure, of MP-633 is hereby terminated."

Additional facts and arguments were presented at a meeting held in U.S. Customs Service Headquarters on May 9, 1991, and in a supplemental written submission dated May 21, 1991.

Attached to your initial and supplemental submissions were structural diagrams of each compound. Three-dimensional models of Ioversol and diatrizoic acid were presented at the aforementioned meeting.

FACTS:

Several of the chemicals under consideration are used in a medical setting as ingredients of substances injected for radiographic diagnostic purposes. MP-633 is used in the U.S. to manufacture an opacifying agent to be known as Ioversol. You have given MP-633 the chemical name 5-[N-2-Acetoxyethyl) acetoxyacetamido]-N,N'-bis(2,3-diacetoxypropyl)-2,4,6- triiodoisophthalamide. You have given Ioversol the chemical name N,N'-bis(2,3-dihydroxypropyl)-5-[N-(2-hydroxyethyl)-glycolamido]- 2,4,6-triiodoisophthalamide. Examples of currently used X-ray contrast agents are diatrizoic acid, metrizoic acid, iothalmic acid and biligrafin acid, desirable characteristics of which include high water solubility, low reactivity, low toxicity, low osmolality, and low viscosity. Ioversol has been developed by Mallinckrodt Medical, Inc., as another radiographic diagnostic with characteristics that give it greater clinical desirability. As stated during a meeting at U.S. Customs Headqurters on May 9, 1991, MP-633, developed by Mallinckrodt Medical, Inc., cannot be used, in and of itself, as a radiographic diagnostic because it is not water soluble. The common denominator of all of the foregoing compounds, the radiographics and the intermediary, is triiodobenzene, i.e., all of the compounds are derivatives of triiodobenzene.

Diatrizoic acid, metrizoic acid and biligrafin acid and no other compounds are classified eo nomine under subheading 2924.29.0500, HTSUSA. You are of the opinion that, having similar structures and purposes to the foregoing compounds, both MP-633 and Ioversol should be classified thereunder.

In your supplemental submission of May 21, 1991, you withdrew that portion of your ruling request seeking classification of the subject compounds as acyclic amides under subheading 2924.10.1050, HTSUSA.

ISSUE:

What is the proper tariff classification under the HTSUSA of the organic chemical compounds MP-633 and Ioversol?

LAW AND ANALYSIS:

Merchandise imported into the U.S. is classified under the HTSUSA. The tariff classification of merchandise under the HTSUSA is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes. See Sections 1204(a) and (c) of the Omnibus Trade and Competitive Act of 1988 (19 U.S.C. 1204(a) & (c)).

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule (i.e., (1) merchandise is to be classified under the 4-digit heading that most specifically describes the merchandise; (2) only 4-digit headings are comparable; and (3) merchandise must first satisfy the provisions of a 4-digit heading before consideration is given to classification under a subheading within this 4-digit heading) and any relative section or chapter notes and, unless otherwise required, according to the remaining GRI's taken in order.

Pursuant thereto, and as the parties clearly agree, MP-633 and Ioversol are properly classified under subheading 2924.29, HTSUSA. The question remains, how are they to be classified at the national level?

You are of the opinion that MP-633 and Ioversol should be classified under subheading 2924.29.0500, HTSUSA, asserting that each compound is a radiographic diagnostic, just as are diatrizoic, metrizoic and biligrafin acids. It is your belief that each compound "possesses an essential resemblance to" the three aromatic carboxy-amide function compounds set out in subheading 2924.29.0500 (citing in part Smillie & Co. v. U.S., 12 Ct. Cust. App. 365, 367 (1924), wherein the court had to determine the proper classification of ferromanganese according to the definite trade understanding and designation of the term), and conclude that classification of MP-633 and Ioversol under the foregoing subheading is warranted as the difference between the eo nomine compounds and the subject compounds is "in the nature of an improvement, the essential character" of the eo nomine compounds "being preserved or only incidentally altered," citing in part FAG Bearings, Ltd. v. U.S., 9 CIT 227, 229 (1985), the court therein relying on Robert Bosch Corp. v. U.S., 63 Cust. Ct. 96, 104 (1969) and other cases cited therewith.

In Bosch, supra, the court was called upon to decide the proper classification of automobile flasher units, back-up light assemblies and starter solenoid switches. Customs had classified the articles as "electrical switches, relays * * *, and other electrical apparatus for making or breaking electrical circuits," a use provision; the importer claimed that the flasher units and back-up light assemblies were more properly classifiable as "electric lighting equipment designed for motor vehicles, and parts thereof," an unlimited eo nomine provision, and that the starter solenoid switches were more properly classifiable as "ignition magnetos * * * and other electrical starting and ignition equipment for internal combustion engines * * *; all the foregoing and parts thereof," another unlimited eo nomine provision. Stating that "electrical switches" are not "lighting equipment" per se, and in view of the statutory rule of interpretation, then General Interpretative Rule 10(ij), Tariff Schedule of the United States, which provided "that a provision for 'parts' 'does not prevail over a specific provision for such part,'" the court held that Customs classification of the flasher units and back-up light assemblies was proper, See Bosch, supra at 102. With regard to the starter solenoid switches, the court found that they were designed to and in fact did function both mechanically and electrically, i.e., the electrical "switching" of the device caused the mechanical propulsion and retraction of a shaft that meshed with the starter motor, thus enabling the automobile to be started "electrically" with an ignition key rather than simply mechanically with, e.g., a crank. Finding thusly, the court stated, "The principle is well settled that where an article is in character or function something other than as described by a specific statutory provision - either more limited or more diversified - and the difference is significant, it cannot find classification within such provision. It is said to be more than the article described in the statute. [citations omitted]" Bosch, supra, at 103-104. In obiter dictum immediately following the foregoing, the court stated, "By contrast where the difference is in the nature of improvement or amplification, and the essential character is preserved or only incidentally altered, the applicable rule is [citation omitted], that an unlimited eo nomine statutory designation includes all forms of the article in the absence of a contrary legislative intent or commercial designation. [citations omitted]", id., at 104. The court held that the starter solenoid switches were not electrical switches, but other electrical starting and ignition equipment for internal combustion engines, thereby giving the plaintiff a partial victory.

We find the entirety of the foregoing quotation to be instructive in this case. Diatrizoic acid, metrizoic acid and biligrafin acid and no other compounds are listed eo nomine in subheading 2924.29.0500, HTSUSA, which subheading is clearly a limited, not unlimited provision. Both MP-633 and Ioversol are something other than any of the compounds specifically identified therein. MP-633 is more limited since it cannot be used as a radiographic diagnostic. Ioversol is clearly, painstakingly and intentionally so, more than any of the three compounds.

In Smillie, supra, the court was faced with a challenge to Customs classification of a material alleged by the importer to be other than ferromanganese. The court stated that "'a commercial designation must be one existing and recognized in the trade and commerce at and prior to the date of the tariff act in which such designation occurred [citation omitted]' * * * This rule, of course does not operate to exclude articles which are not known at the time of the passage of the act, but which come into being later. As to all such articles, the statute will be held to apply if the articles possess an essential resemblance to the ones named in the statute in those particulars which the statute established as the criteria of the classification [citation omitted]. But here no such question arises * * * the term ferromanganese had a definite, uniform, and general meaning and understanding in the trade at the time of the passage of the tariff act of 1913." In that case, of course, the court was addressing an eo nomine provision for, among other articles, ferromanganese, and a limited use provision for materials named therein together with other alloys used in the manufacture of steel, not specially provided for.

Nor do we find any such question of essential resemblance arising in this case. Clearly, there can be no commercial designation for either MP-633 or Ioversol, since they are newly developed. Nor can the statute, i.e., the HTSUSA subheading sought by Mallinckrodt Medical, Inc., be held to apply since there are no particulars, such as triiodobenzene derivatives, established thereunder.

We are of the opinion that neither MP-633 nor Ioversol may be classified under subheading 2924.29.0500, HTSUSA.

Chapter notes are part of the legal text of the HTSUSA and are to be considered statutory provisions of law for all purposes. See Sections 1204(a) and 1204(c) of the Omnibus Trade and Competitiveness Act of 1988 (19 U.S.C. 1204(a) & (c)). Moreover, as indicated above, chapter notes, together with the terms of the headings and section notes, are the principal authority by which merchandise is to be classified under the schedule. See GRI 1. Therefore, chapter notes are to be considered mandatory authority for the classification of merchandise under the HTSUSA.

As provided in Subheading Note 1, Chapter 29, HTSUSA:

Within any one heading of this chapter, derivatives of a chemical compound (or group of chemical compounds) are to be classified in the same subheading as that compound (or group of compounds) provided that they are not more specifically covered by any other subheading and that there is no residual subheading named "Other" in the series of subheadings concerned.

In general consideration of the foregoing and in particular view of the proviso set forth in the subheading note, we are of the opinion that both MP-633 and Ioversol, both similar in structure to iohexol, a triiodoisophthalamide identified in endnote 191 to Chapter 29, are properly classified under subheading 2924.29.4400 as other carboxyamide-function compounds not elsewhere specified or included in the tariff schedule.

HOLDING:

MP-633 and Ioversol are properly classified under subheading 2924.29.4400, HTSUSA, which provides for carboxyamide-function compounds; cyclic amides; other; aromatic; other; other products described in additional U.S. note 3 to section VI. Merchandise classified under this subheading is subject to a 13.5% ad valorem rate of duty.

Sincerely,

John Durant, Director
Commercial Rulings Division

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