Newly Released CBP HQ Rulings March 12
The Customs Rulings Online Search System (CROSS) was updated March 12 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
H332371: Clinical Trial Stage Pharmaceutical Products and Materials; Fallback Method
| Ruling: The fallback methods of appraisement are appropriate for the comparators, clinical finished drug products, drug products, and active pharmaceutical ingredients that lack commercial prices and approval for commercial sale to treat any disease indication, and clinical finished drug products, drug products, and active pharmaceutical ingredients with approval for commercial sale to treat at least one disease indication and have a commercial value available. |
| Issue: (1) Whether the imports of clinical FDP, DP, and API lacking available commercial prices and any approval for commercial sale to treat any disease indication may be appraised pursuant to 19 U.S.C. § 1401a(f); (2) whether the imports of clinical FDP, DP, and API with available commercial prices and approval for commercial sale to treat at least one disease indication may be appraised pursuant to 19 U.S.C. § 1401a(f); (3) whether the comparators imported may be appraised pursuant to 19 U.S.C. § 1401a(f). |
| Item: Company A engages in clinical trials as part of its drug development process to test the therapeutic benefit of investigational drugs against specific disease indications in target patient groups. As part of this effort, Company A imports clinical stage active pharmaceutical ingredients, clinical drug products (i.e., combined with excipients but not in finished form) and comparator (finished drug products produced by other drug companies that are used as comparisons in trials) for use in manufacturing clinical drugs and trial kits to support clinical trials as well as clinical finished drug products in dosage form for use in ongoing active trials where it or a related pharmaceutical company is the sponsor. The APIs, drug products, comparator and finished drug products in question are produced at internal Company B-owned manufacturing sites globally and, increasingly, by external third-party manufacturers (also known as assemblers) contracted by company B. (1) Some of the imported drug products lack any intercompany price for a product because some drugs imported by the company may have not achieved regulatory approval for commercial sale to treat any disease indication. (2) Others already have regulatory approval for commercial sale to treat a different disease indication. For such products, Company A maintains pre-existing global sale price lists for both intercompany and customer sales for the commercial drug and imports those shipments based on commercial sale transactions. (3) The comparators are not sold either before or after importation. |
| Reason: (1) Acknowledging that Company A is not able to value key compound assists using their actual cost in certain situations based on their discretion under its proposed methodology, the proposed methodology for modified computed value is a reasonable modification under the valuation statues because it facilitates reaching a reliable and consistent value. (2) Assuming that the relationship between the buyer and the seller does not affect the price actually paid or payable for the identical or similar merchandise, the use of the modified transaction value of identical or similar merchandise methodology is an acceptable means of appraisal. (3) Transaction value is not applicable because there is no sale for exportation to the U.S. The comparators are purchased in foreign countries by the company's related entities and are shipped to a company-related entity in the U.S. without a sale. The transaction value of identical and similar merchandise are also not available because there are no available importations of identical or similar merchandise to appraise the imported materials that make up the comparators. Deductive value is not available because comparators are imported for clinical trial purposes and there is no sale after importation. Computed value is also unavailable because the company purchases comparators and the cost to produce the goods is unknown. The comparators must be appraised under the fallback method. |
| Ruling Date: Feb. 28, 2024 |
H333793: Tariff Classification and Country of Origin of Strawberry Mochi
| Ruling: (1) 1704.90.35, 5.6%, “Sugar confectionery (including white chocolate), not containing cocoa: Other: Confections or sweetmeats ready for consumption: Other: Other: Other.” (2) The country of origin of the strawberry mochi is Taiwan. |
| Issue: (1) What is the tariff classification of the strawberry mochi? (2) What is the country of origin of the strawberry mochi? |
| Item: Strawberry mochi, which is round in shape and strawberry pink in color. In Taiwan, the raw materials, i.e., maltose, sugar, glutinous rice, hydroxypropyl distarch phosphate (E1442), palm oil, wax gourd, and strawberry juice are stored at 35 degrees Celsius after undergoing quality control. Then they are weighed, steamed at 112 degrees Celsius, mixed, and stirred. Afterwards, the various additives, i.e., trehalose, gelatin, strawberry flavor, sorbitol, FD&C Red No. 40, monoglycerides and diglyceride, and potassium sorbate are prepared and added to the mixture. The mixture is shaped into round balls and becomes the final product. One individual bag contains 8 strawberry mochis. |
| Reason: (1) CBP has previously classified similar products to the strawberry mochi in heading 1704. The strawberry mochi is composed mostly of sugar. The strawberry mochi is ready for consumption as a confectionary, viewed by the importer as a confectionary, and sold in the market with other confectionaries and sweets similar to other items which were classified in heading 1704. (2) The strawberry mochi made from Taiwanese ingredients and other ingredients from various countries is substantially transformed in Taiwan where all of its ingredients are mixed together and shaped into round balls to become the final product. When all of the ingredients are mixed together in Taiwan, they lose their separate identities and become a new product, strawberry mochi. |
| Ruling Date: March 12, 2024 |