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HQ 088099


June 28, 1991

CLA-2 CO:R:C:F RFC

CATEGORY: CLASSIFICATION

TARIFF NO.: 2918.90.4500

District Director of Customs
U.S. Customs Service
300 South Ferry Street, Terminal Island
San Pedro, CA 90731

RE: Decision on Application for Further Review of Protest No. 2704-90-002135, on the classification of the chemical para- methoxphenylacetic acid

Dear Sir:

This is a decision on application for further review of a protest timely filed on behalf of G.D. Searle & Co., on May 17, 1990, against your decision in the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of the chemical para-methoxphenylacetic acid. The chemical was entered under entry number 110-0308324 on December 1, 1989. The entry was liquidated on March 23, 1990.

FACTS:

The product is the chemical "para-methoxyphenylacetic acid (PMPA)." Its chemical structure consists of a carboxylic acid having an attached oxygen function group (methoxy group) (CH3OC6H4CH2COOH). See Hawley's Condensed Chemical Dictionary 755 (1987). The chemical is used as an intermediate in the production or preparation of pharmaceutical and other organic compounds. Id.

ISSUE:

What is the proper tariff classification under the HTSUSA of the chemical para-methoxyphenylacetic acid?

LAW AND ANALYSIS:

Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the United States Annotated (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 1204(c) of the Omnibus Trade and Competitiveness Act of 1988 (19 U.S.C. 1204(a) and 1204(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, provided such headings or notes do not otherwise require, then according to the other GRIs.

GRI 6 prescribes that, for legal purposes, GRIs 1 to 5 shall govern, mutatis mutandis, classification at subheading levels within the same heading. Therefore, merchandise is to be classified at equal subheading levels (i.e., at the same digit level) within the same 4-digit heading under the subheading that most specifically describes or identifies the merchandise.

The Explanatory Notes to the Harmonized Commodity Description and Coding System (hereinafter "Harmonized System") represent the official interpretation of the Customs Cooperation Council on the scope of each heading. See H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988); 23 Customs Bulletin No. 36, 3 (T.D. 89- 90, September 6, 1989), 59 F.R. 35127 (August 23, 1989). Although not binding on the contracting parties to the Harmonized System Convention or considered to be dispositive in the interpretation of the Harmonized System, the Explanatory Notes should be consulted on the proper scope of the Harmonized System. Id.

A review of the schedule shows that the product is classified in chapter 29. This chapter covers "organic chemicals." A review of this chapter and of the classifications proposed by the importer shows that two headings merit consideration: heading 2918 and heading 2933 (the heading proposed by the importer in its initial submissions). Heading 2933 provides for "heterocyclic compounds with nitrogen hetero-atom(s) only" and "nucleic acids and their salts." As PMPA is not a "nucleic acid or its salt," it must meet the article description of a "heterocyclic compound with nitrogen hetero-atom only" in order to be classified under heading 2933. In order to meet the terms of a "heterocyclic compound with nitrogen hetero-atom(s) only," however, a chemical must contain heteroatoms. The cyclic portion of PMPA consists of a six (6) carbon atom backbone. It has no other atoms present within the cyclic backbone. Consequently, PMPA contains no heteroatoms. Therefore, PMPA does not meet the article description for heading 2933; thus, this is an incorrect heading under which to classify PMPA.

The second heading in chapter 29, as indicated above, under which PMPA may be classified is heading 2918. This heading provides for "carboxylic acids with additional oxygen function and their anhydrides, halides, peroxides and peroxyacids" and "their halogenated, sulfonated, nitrated or nitrosated derivatives." As indicated above, PMPA is structurally a carboxylic acid with an oxygen function. Accordingly, it meets the terms of heading 2918 and, therefore, is properly classified under this heading.

PMPA has been found to be properly classified under heading 2918. Consideration now must be given to the proper subheading within heading 2918 under which PMPA is classified. Two 8-digit subheadings merit consideration: 2918.90.30 (the subheading proposed by the importer in its most recent submission) and 2918.90.45. Subheading 2918.90.30 essentially provides for "drugs containing aromatic carboxylic acids with additional oxygen function." On the other hand, subheading 2918.90.45 essentially provides for "other aromatic carboxylic acids with additional oxygen function" (i.e., articles not eo nomine or specifically provided for under heading 2918 but which are nonetheless properly classified under that heading).

In order to be classified under subheading 2918.90.30, PMPA must, of course, fit the article description of a "drug." A careful analysis, however, reveals that PMPA does not meet this article description. First, PMPA is used as a preparation for pharmaceutical and other organic compounds. See Hawley's Condensed Chemical Dictionary 755 (1987). Thus, its use is not limited to pharmaceuticals but to also "other organic compounds." Second, as imported, PMPA has no beneficial value as a pharmaceutical or drug. It is merely a chemical that may be used as a pharmaceutical intermediate; PMPA is not a finished pharmaceutical. Third, PMPA does not qualify as a "drug" as this term is commonly or commercially understood. See Dorland's Illustrated Medical Dictionary 510 (1988) (a drug is "any chemical compound that may be used on or administered to humans or animals as an aid in the diagnosis, treatment, or prevention of diseases or other abnormal condition, for the relief of pain or suffering, or to control or improve any physiologic or pathologic condition"); Stedman's Medical Dictionary 468 (1990) (a drug is a "[t]herapeutic agent; any substance, other than food, used in the prevention, diagnosis, alleviation, treatment, or cure of disease"). Finally, and of special significance to the instant classification analysis, the issue of whether a pharmaceutical intermediate is to be classified as the finished product has been addressed and resolved in the negative in a prior administrative classification ruling. See Headquarters Ruling Letter 083790 ("Under the TSUS, the definition of drugs included not only the finished product but also the active ingredients. However, under the HTSUS there is no indication that intermediates are to be classified as the finished products. [Therefore, chemicals that may be used as pharmaceutical intermediates are to be classified according to their chemical structure and not according to a pharmaceutical drug for which they may be used as an intermediate]"). In view of the above, there can be no doubt that PMPA is not properly classified as a "drug" under subheading 2918.90.30.

The remaining subheading, as indicated above, under which PMPA may be classified is subheading 2918.90.45. In light of the above analysis and in accordance with GRIs 1 and 6, PMPA is properly classified under this subheading.

HOLDING:

The above-described product is properly classified under the statistical-reporting number 2918.90.4500, HTSUSA, which provides for, among other things, carboxylic acids with additional oxygen function and their anhydrides, halides, peroxides and peroxyacids, other, aromatic, other, other, other. The general rate of duty for the year 1989 is 3.7 cents/kg plus 17.9 percent ad valorem.

The protest should be denied in full. A copy of this decision should be furnished to the protestant with the Customs' Form 19 notice of action.

Sincerely,

John Durant, Director
Commercial Rulings Division

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