January 4, 2006 CBP Bulletin Notices on Microwave Popcorn and Everolimus
In the January 4, 2006 issue of the U.S. Customs and Border Protection Bulletin (CBP Bulletin) (Vol. 40, No. 2), CBP issued notices: (a) proposing to revoke one classification ruling on microwave popcorn, and (b) proposing to revoke one classification ruling on Everolimus. CBP states that it is also proposing to revoke any treatment it has previously accorded to substantially identical transactions that are contrary to its position in these notices of proposed revocation.
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CBP states that any party who has received a contrary ruling or decision on the merchandise that is subject to the proposed rulings, or any party involved with a substantially identical transaction, should advise CBP by February 3, 2006, the date that written comments on the proposed rulings are due. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in these notices.
CBP also states that these notices cover any rulings on the subject merchandise that may exist but have not been specifically identified.
Proposed Revocation of Two Classification Rulings
Microwave popcorn. At issue is the "Act II" brand microwave buttered popcorn available in three flavors. The three flavors contain some or all of the following ingredients: popcorn (maize), partially hydrogenated vegetable oil, salt, natural/artificial flavoring, and achiote (coloring). The flavorings and seasonings are packaged together with the popcorn in individual 99 gram packages that are designed to be heated in a microwave. The individual packages will be sold in boxes containing 28 packages.
CBP is proposing to issue HQ 967900 in order to revoke NY H83710 and reclassify subject merchandise under HTS 2008.19.9090, which provides for preparations of nuts, peanuts (ground-nuts) and other seeds, etc., other, including mixtures: other; rather than under HTS 1005.90.4040, which provides for popcorn.
CBP explains that since the issuance of NY H83710, it has had a chance to review the classification of this merchandise and has decided that because of the addition of other ingredients to the microwave corn, the product now constitutes a preparation of corn kernels for popping. Thus, the classification in ruling NY H83710 is in error.
It is now CBP's opinion that the specific ingredient composition of subject merchandise has advanced them from being mixtures of popcorn kernels and other ingredients to products that are preparations consisting of popcorn kernels with specific additional ingredients which are designed to facilitate the popping of the kernels and which have been included to impart a specific taste or flavor to the finished product.
Based on CBP's analysis, it finds that microwave popcorn packages are preparations that are more specifically provided for in HTS heading 2008, than under HTS subheading 2008.19.9090.
proposed: HTS 2008.19.9090, 17.9%; current: 1005.90.4040, 0.25/kg.
Everolimus. CBP states that Everolimus is a macrocycylic lactone immunosuppressive drug being investigated for use in reducing graft vasculopathy, and is a semisynthetic derivative of Rapamycin, currently known as Sirolimus. Everolimus is also an organic compound that is stabilized with a second antioxidant organic compound; as such, it is a mixture of two organic compounds.
CBP also states that the manufacturer of Everolimus submitted information in its request for reconsideration which was not included in the original request, that evidences that Everolimus is an antibiotic that has bacteriostatic properties that kill or inhibit the growth of microorganisms.
CBP is proposing to issue HQ 967895 in order to revoke NY R00794 and reclassify subject merchandise under HTS 2941.90.5000, which provides for antibiotics: other: other: other; rather than under HTS 2934.99.4700, which provides for "Nucleic acids and their salts, whether or not chemically defined; other heterocyclic compounds: other: other: other: drugs."
According to CBP, subject merchandise is prima facie classifiable in Heading 2941 as an antibiotic and Heading 2934 as a heterocyclic compound.
CBP also notes that the Explanatory Notes state that Heading 2941 provides for antibiotics that are "substances secreted by living microorganisms which have the effect of killing other microorganisms or inhibiting their growth".
Additionally, Note 3 to HTS Chapter 29 states that "goods which could be included in two or more headings of this chapter are to be classified in that one of those headings which occurs last in numerical order."
Thus, in accordance with Note 3 to HTS Chapter 29, the Explanatory Note to HTS heading 2941, and a referenced court case, CBP finds that Everolimus is classified in subheading HTS 2941.90.5000.
proposed: HTS 2941.90.5000, duty-free; current: 2934.99.4700, 3.7%.
January 4, 2006 CBP Bulletin (Vol. 40, No. 2) available athttp://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2006/vol40_01042006_no2/