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HQ 225150




February 2, 1994

CON-9-09 CO:R:C:E 225150 TLS

CATEGORY: ENTRY

Mr. Gary J. Conte
Aceto Corporation
One Hollow Lane
Lake Success, New York 11042-1215

RE: Request for information concerning the requirements for duty-free entry of merchandise under Harmonized Tariff Schedule of the United States Annotated (HTSUSA) subheading 9813.00.30; 19 CFR 10.37; Customs ruling HQ 224496 (January 11, 1994).

Dear Mr. Conte:

This office has received the above-referenced request for a information as provided for under Customs regulations. We have considered the request and have the following comments in response.

FACTS:

Your company plans to import 5-Mesylamino Indole-2-carboxylic acid (MACA) for exclusive sale to another company. MACA is to used to produce a drug which is currently under clinical trial investigation. You would like to know what the requirements are if this article is to be imported under HTSUSA subheading 9813.00.30.

ISSUE:

Whether the product to be imported in this case qualifies for admission under HTSUSA subheading 9813.00.30.

LAW AND ANALYSIS:

Subheading 9813.00.30 provides for the following:

Articles intended solely for testing, experimental or review purposes, including specifications, photographs and similar articles for use in connection with experiments or for study...

The rate of duty for articles entered under subheading 9813.00.30 is "[f]ree, under bond, as prescribed in U.S. Note 1 to this subchapter." The relevant part of U.S. Note 1(a) of the subchapter this subheading is found under (Subchapter XIII) reads as follows:

The articles described in the provisions of this subchapter, when not imported for sale or for sale on approval, may be admitted into the United States without the payment of duty, under bond for their exportation within 1 year from the date of importation... (Emphasis added.)

The length of time the imported product may remain in the United States under bond may be extended for two additional years, one year at a time, for a maximum period of three years. 19 CFR 10.37. U.S. Note 3 provides that "[u]pon satisfactory proof that any article admitted under heading 9813.00.30 has been destroyed because of its use for any purpose provided therein, the obligation under the bond to export such article shall be treated as satisfied."

To summarize what is required for an article to be admitted under 9813.00.30, the article must 1) be intended solely for testing, experimental, or review purposes; 2) not be imported for sale or for sale on approval; 3) and exported (or destroyed) under bond within one year from the date of importation, unless the period under which the article may remain in this country under bond is extended.

From the information you have furnished us, we find that your proposed transaction would not meet the requirements for articles admitted under subheading 9813.00.30. The first requirement, intention to test or experiment with the article, seems not to be met here. The use of MACA in the production of another drug that is to be experimented with is not a testing or review of the imported article contemplated under 9813.00.30. See, e.g., Customs ruling HQ 224496 (January 11, 1994). The third requirement, exportation or destruction under bond within the authorized bond period, remains to be fulfilled after the article has been admitted for testing.

The second requirement, not imported for sale, is also not being met in the present proposed transaction. Your company plans to sell the imported article to another company. You have noted that the sale is exclusive to the other company and your company will not profit from the sale. These facts are irrelevant to the basic requirement of not importing for sale. Whether or not the importer makes a profit on the sale is of no consequence here and neither is the exclusivity of the sale. Therefore, we are compelled to find that the proposed importation of MACA for sale to another company would not be eligible for admission under subheading 9813.00.30.

HOLDING:

The article to be imported in this case will not be eligible for admission under HTSUSA subheading 9813.00.30 because it is to be imported for sale in violation of U.S. Note 1(a) of Subchapter XIII, HTSUSA, and because the imported article itself will not be tested.

Sincerely,

John Durant, Director

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