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HQ 955266


September 6, 1994

CLA-2 CO:R:C:F 955266 EAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 3006.30.5000

Matthew T. McGrath, Esquire
Barnes, Richardson & Colburn, Attorneys at Law 1225 Eye Street, N.W.
Washington, D.C. 20005

RE: "Hexabrix"; diagnostic imaging contrast medium; ioxaglic acid; 2924.29.4400; NAFTA; Article 509

Dear Mr. McGrath:

This is in reply to your letters dated October 19, 1993, January 7, 1994 and June 24, 1994, on behalf of Mallinckrodt Medical, Inc., in which you request a written ruling on the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of a diagnostic imaging contrast medium patented under the name "Hexabrix", and preferential duty treatment under the North American Free Trade Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (December 8, 1993), hereinafter "NAFTA".

FACTS:

Ioxaglic acid, made in France, is used in Canada to manufacture "Hexabrix". "Hexabrix" is a composite opacifying preparation and diagnostic reagent, not containing antisera or antigens, designed to be administered parenterally. In the manufacturing process, ioxaglic acid, the preferred chemical name of which is 3-[[[[3-(Acetylmethylamino)-2,4,6-triiodo-5-[(methyl- amino)carbonyl]benzoyl]amino]acetyl]-amino]-5-[[(2-hydroxyethyl) amino]carbonyl]-2,4,6-triiodo-benzoic acid, undergoes a chemical reaction in the presence of other compounds variously originating in Germany and Sweden, none of which is classifiable under any heading of chapter 30, HTSUSA, nor present in the final formulation. Subsequent to formulation, the "Hexabrix" is bottled at dosage level, sterilized, labelled and packaged in Canada for consumption entry in the United States. The packaging materials and containers for retail sale and the packing materials and containers for shipment, delimited as glassware, stoppers, seals, foam boxes, labels and bails, variously originate in Canada, the U.S. and Germany.

ISSUE:

Whether "Hexabrix" formulated in Canada from non-originating ioxaglic acid is a product of Canada for purposes of country of origin marking and preferential duty treatment under NAFTA.

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.

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order.

Heading 2916 in part describes unsaturated acyclic monocarboxylic acids and certain derivatives thereof.

Heading 2924 describes, among other substances, carboxyamide- function compounds.

Pursuant to legal note 3, Chapter 29, we are of the opinion that ioxaglic acid is classifiable under heading 2924 and, more particularly, classifiable under subheading 2924.29.4400, a provision for carboxyamide-function compounds, cyclic amides, other, aromatic, other, other, other, products described in additional U.S. note 3 to section VI.

Heading 3006 describes pharmaceutical products specified in note 3 to chapter 30. Legal Note 3 provides in part that heading 3006 "applies only to the following, which are to be classified in that heading and in no other heading of the tariff schedule: . . . (d) Opacifying preparations for X-ray examinations and diagnostic reagents designed to be administered to the patient, . . . consisting of two or more ingredients which have been mixed together for such uses."

We find that "Hexabrix" is described by the terms of heading 3006 and legal note 3(d) to chapter 30. We are of the opinion that "Hexabrix" is classifiable under subheading 3006.30.5000, HTSUSA, a provision for certain pharmaceutical products used in X-ray examinations and not containing antigens or antisera.

Goods originating in the territory of a NAFTA country are subject to duty as provided in General note 12 to the HTSUSA; with respect to such "Canadian" goods, see General note 12(a)(i), HTSUSA.

"Hexabrix" qualifies for preferential duty treatment as goods originating in Canada only if the goods sourced foreign to Canada "have been transformed in the territory of Canada . . . so that . . . except as provided in subdivision (f) [de minimis] of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein . . . ." General note 12(b)(ii)(A), HTSUSA.

Pursuant to General notes 12(j) and (k), we disregard packaging materials and containers for retail sale and packing materials and containers for shipment in determining whether all the non-originating materials used in the production of "Hexabrix" undergo the applicable change in tariff classification set out in subdivision (t) of General note 12.

Pursuant to General note 12(r)(i), the specific rules that apply to heading 3006 set out in General note 12(t)/30 at 6. are:

(A) A change to subheadings 3006.10 through 3006.60 from any other heading; or

(B) A change to subheadings 3006.10 through 3006.60 from any other subheading within heading 3006, whether or not there is also a change from any other heading, provided there is a regional value content . . . .

We find that the non-originating ioxaglic acid used in the production of "Hexabrix" undergoes a change in tariff classification described General note 12(t)/30, subpart 6.(A). We are of the opinion that "Hexabrix" made in Canada as set forth hereinabove is a good of Canada and may be marked with the name of Canada in English, French or Spanish and is entitled to preferential duty treatment at the column 1 special rate of 2.7 percent ad valorem.

HOLDING:

"Hexabrix" is classifiable under subheading 3006.30.5000, HTSUSA, a provision for pharmaceutical products specified in note 3 to chapter 30: opacifying preparations for X-ray examinations; diagnostic reagents designed to be administered to the patient: other.

"Hexabrix" manufactured in Canada from non-originating ioxaglic acid and other compounds may be marked with the name of Canada and is eligible for preferential duty treatment under NAFTA, at the column 1 special rate of 2.7 percent ad valorem.

Sincerely,

John Durant, Director

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