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HQ 558002




October 11, 1994

CLA-2 CO:R:C:S 558002 MLR

CATEGORY: CLASSIFICATION

TARIFF NO.: 9811.00.60

Mr. Desmond Flynn
SmithKline Beecham Pharmaceuticals
Imports & Domestic Traffic
One Franklin Plaza
Philadelphia, PA 19102

RE: Applicability of duty exemption under HTSUS subheading 9811.00.60 to pharmaceutical products; 19 CFR 134.46; patient starter package; not for sale; country of origin marking

Dear Mr. Flynn:

This is in response to your facsimile of July 13, 1994, requesting a ruling concerning the country of origin marking and free entry of pharmaceutical products. A photograph of the product's container is submitted with your request.

FACTS:

SmithKline Beecham intends to import the newly approved "FAMVIR", an anti-viral pharmaceutical, into the U.S. You state that the pharmaceuticals will not be for sale and will be used to solicit and generate new business. The back of the pharmaceutical's container contains the words "Patient Starter Package, NOT FOR SALE." The container also states: "Manufactured by SmithKline Beecham Pharmaceuticals, Crowley, UK for SmithKline Beecham Pharmaceuticals, Philadelphia, PA 19101." In a telephone conversation with a member of my staff, you indicated that each pharmaceutical is valued at less than $1.00. You will also be importing similar pharmaceuticals which will be sold.

ISSUES:

I. Whether the pharmaceutical products are entitled to duty-free treatment under subheading 9811.00.60, HTSUS.

II. What are the country of origin marking requirements for the pharmaceutical products at issue.

LAW AND ANALYSIS:

I. Subheading 9811.00.60, HTSUS

Subheading 9811.00.60, HTSUS, provides for the free entry of:

[a]ny sample ... valued not over $1 each, or marked, torn, perforated or otherwise treated so that it is unsuitable for sale or for use otherwise than as a sample, to be used in the United States only for soliciting orders for products of foreign countries.

The controlling factor is whether the importer uses the samples for the purpose of soliciting purchase orders for foreign merchandise and the creation of demand for future orders.

In Italian Drug Importing Co. v. United States, 46 Cust. Ct. 243, C.D. 2263 (1961), the court allowed the free entry of vitamins marked "Sample - not for sale" which were distributed to physicians without charge for their patients. In Headquarters Ruling Letter (HRL) 556174 dated December 4, 1991, Customs determined that tablets imported in vials or blister packages marked "Sample - not for sale" for the purpose of distributing them to physicians in order to create a market in the U.S., qualified as samples under subheading 9811.00.60, HTSUS.

In this case, although the pharmaceutical products will not be marked as samples, but instead will be marked "Patient Starter Package, NOT FOR SALE", they are valued at less than $1.00, and, therefore, are entitled to free entry under subheading 9811.00.60, HTSUS, if they are not for sale and are only used as samples for soliciting orders for products of foreign countries. II. Country of Origin Marking

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 imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article 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. Congressional intent in enacting 19 U.S.C. 1304 was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. In this case, the U.S. reference "Philadelphia, PA" on the back of the container triggers the requirements of 19 CFR 134.46, which requires that if the name of any city or locality in the U.S., or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of" or other words of similar meaning. The purpose of this section is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the actual origin of the imported good.

It is our opinion that the requirements of 19 CFR 134.46 are satisfied, in that, the country of origin is in the same size and in close proximity to the U.S. reference. However, for future importations, the phrase "Manufactured by SmithKline Beecham Pharmaceuticals, Crowley, UK for SmithKline Beecham Pharmaceuticals, Philadelphia, PA 19101," should be revised to read: "Manufactured in Crowley, UK by SmithKline Beecham Pharmaceuticals, for SmithKline Beecham Pharmaceuticals, Philadelphia, PA 19101." This will make it more clear that the pharmaceuticals are, in fact, made in the UK. Currently, it is only apparent that the manufacturer, SmithKline Beecham, is located in Crowley, UK.

HOLDING:

Based on the information submitted, the pharmaceutical products, marked "Patient Starter Package, NOT FOR SALE" and each valued at less than $1.00, are entitled to free entry under subheading 9811.00.60, HTSUS, if they are not for sale and are only used as samples for soliciting orders for products of foreign countries. Furthermore, the pharmaceutical product is marked to satisfy the requirements of 19 U.S.C. 1304; however, for future importations, the country of origin marking should read: "Manufactured in Crowley, UK by SmithKline Beecham Pharmaceuticals, for SmithKline Beecham Pharmaceuticals, Philadelphia, PA 19101."

Sincerely,

John Durant, Director

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