[Federal Register Volume 86, Number 173 (Friday, September 10, 2021)]
[Notices]
[Pages 50723-50724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19515]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Certain 
Calcitriol Soft-Shell Capsules

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (CBP) has issued a final determination concerning the 
country of origin of certain Calcitriol soft-shell capsules. Based upon 
the facts presented, CBP has concluded in the final determination that 
the Calcitriol capsules would be products of a foreign country or 
instrumentality designated pursuant to CBP regulations for purposes of 
U.S. Government procurement.

DATES: The final determination was issued on August 27, 2021. A copy of 
the final determination is attached. Any party-at-interest, as defined 
in 19 CFR 177.22(d), may seek judicial review of this final 
determination no later than October 12, 2021.

FOR FURTHER INFORMATION CONTACT: Albena Peters, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of Trade, at (202) 
325-0321.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on August 27, 
2021, CBP issued a final determination concerning the country of origin 
of Calcitriol capsules for purposes of Title III of the Trade 
Agreements Act of 1979. This final determination, HQ H319605, was 
issued at the request of the party-at-interest, under procedures set 
forth at 19 CFR part 177, subpart B, which implements Title III of the 
Trade Agreements Act of 1979, as amended (19 U.S.C. 2511-18). In the 
final determination, CBP has concluded that, based upon the facts 
presented, the Calcitriol soft-shell capsules would be products of a 
foreign country or instrumentality designated pursuant to 19 U.S.C. 
2511(b) for purposes of U.S. Government procurement. Section 177.29, 
CBP Regulations (19 CFR 177.29), provides that a notice of final 
determination shall be published in the Federal Register within 60 days 
of the date the final determination is issued. Section 177.30, CBP 
Regulations (19 CFR 177.30), provides that any party-at-interest, as 
defined in 19 CFR 177.22(d), may seek judicial review of a final 
determination within 30 days of publication of such determination in 
the Federal Register.

    Dated: September 3, 2021.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.

HQ H319605

August 27, 2021

OT:RR:CTF:VS H319605 AP

CATEGORY: Origin

Steven Lerner, Supply Chain Analyst, Sun Pharmaceutical Industries 
Ltd., 2 Independence Way, Princeton, NJ 08540

RE: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country of 
Origin of Calcitriol Capsules

Dear Mr. Lerner:

    This is in response to your July 13, 2021 request, on behalf of Sun 
Pharmaceutical Industries Ltd. (``Sun Pharma''), for a final 
determination concerning the country of origin of Calcitriol soft-shell 
capsules. This request is being sought because the company wants to 
confirm eligibility of the merchandise for U.S. government procurement 
purposes under Title III of the Trade Agreements Act of 1979 (``TAA''), 
as amended (19 U.S.C. 2511 et seq.). Sun Pharma is a party-at-interest 
within the meaning of 19 CFR 177.22(d)(1) and 177.23(a).

FACTS:

    Sun Pharma is among the largest specialty generic pharmaceutical 
companies in the world with more than 40 manufacturing facilities.\1\ 
The company manufactures and imports Calcitriol \2\ in the form of 
soft-shell capsules (0.25 mcg and 0.5 mcg). The

[[Page 50724]]

Calcitriol capsules are used for vitamin D3 deficiency.
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    \1\ See Sun Pharma, About Us, https://sunpharma.com/about-us/ 
(last visited Aug. 2, 2021).
    \2\ The Calcitriol's National Drug Code Directory numbers are: 
62756-967-83, 62756-967-88 and 62756-968-88.
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    The raw ingredients originate from Switzerland. The active 
ingredient is Calcitriol USP. The inactive ingredients, which serve as 
coloring agents, preservatives, and fillers, consist of medium-chain 
triglycerides, butylated hydroxyanisole, butylated hydroxytoluene, 
noncrystallizing liquid sorbitol, glycerin, gelatin, methyl paraben, 
propylparaben, ferric oxide (red and yellow), titanium dioxide, 
triethyl citrate, isopropyl alcohol, and opacode black.
    All of the Swiss ingredients are shipped to India where capsules 
are manufactured. During the manufacturing process, the Calcitriol is 
dissolved in medium chain triglycerides along with other inactive 
ingredients to form a clear drug solution. Gelatin is mixed along with 
purified water and other inactive ingredients under specific 
temperature and vacuumed with help of a gelatin melter. The resulting 
gelatin mass is fed into an encapsulation machine to form soft gelatin 
capsules with drug solution inside. The capsules pass into a tumble 
dryer to remove excess moisture. After the capsules are dried and 
polished, they are printed with food grade ink. Finally, the capsules 
are inspected, packed in containers, and labelled.

ISSUE:

    What is the country of origin of the subject Calcitriol capsules 
for purposes of U.S. Government procurement?

LAW AND ANALYSIS:

    U.S. Customs and Border Protection (``CBP'') issues country of 
origin advisory rulings and final determinations as to whether an 
article is or would be a product of a designated country or 
instrumentality for the purposes of granting waivers of certain ``Buy 
American'' restrictions in U.S. law or practice for products offered 
for sale to the U.S. Government, pursuant to subpart B of Part 177, 19 
CFR 177.21-177.31, which implements Title III of the TAA, as amended 
(19 U.S.C. 2511-2518).
    CBP's authority to issue advisory rulings and final determinations 
is set forth in 19 U.S.C. 2515(b)(1), which states:

    For the purposes of this subchapter, the Secretary of the 
Treasury shall provide for the prompt issuance of advisory rulings 
and final determinations on whether, under section 2518(4)(B) of 
this title, an article is or would be a product of a foreign country 
or instrumentality designated pursuant to section 2511(b) of this 
title.

    The rule of origin set forth under 19 U.S.C. 2518(4)(B) states:

    An article is a product of a country or instrumentality only if 
(i) it is wholly the growth, product, or manufacture of that country 
or instrumentality, or (ii) in the case of an article which consists 
in whole or in part of materials from another country or 
instrumentality, it has been substantially transformed into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was so 
transformed.

    A product of a foreign country or instrumentality designated 
pursuant to 19 U.S.C. 2511(b)(1), in pertinent part, is a country or 
instrumentality which is a party to the Agreement on Government 
Procurement (``GPA''), referred to in 19 U.S.C. 3511(d)(17), and as 
annexed to the World Trade Organization (``WTO'') Agreement.\3\ 
Switzerland is a WTO GPA country.
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    \3\ See World Trade Organization, Agreement on Government 
Procurement, Parties, Observers and Accessions, https://www.wto.org/english/tratop_e/gproc_e/memobs_e.htm (last visited Aug. 2, 2021).
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    Title 48, CFR Section 25.003 defines ``WTO GPA country end 
product'' as an article that:

    (1) Is wholly the growth, product, or manufacture of a WTO GPA 
country; or
    (2) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in a WTO GPA country into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was transformed. The term refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to the article, 
provided that the value of those incidental services does not exceed 
that of the article itself.

    Sun Pharma asserts that no substantial transformation occurs in 
India because the identity of the raw materials originating from 
Switzerland remains intact. We concur. The processing of the Calcitriol 
into dosage form as soft gel capsules will not result in a substantial 
transformation. See Headquarters Ruling Letter (``HQ'') H284694, dated 
Aug. 22, 2017 (Dutch-origin bulk calcium acetate produced in the 
Netherlands and combined with inactive ingredients in India resulted in 
calcium acetate capsules originating from the Netherlands); HQ H233356, 
dated Dec. 26, 2012 (The blending of the mefenamic acid of Indian 
origin with inactive ingredients in the U.S. to form mefenamic acid 
capsules did not substantially transform the mefenamic acid from 
India). The Calcitriol is produced in Switzerland and is encapsulated 
in India. No change in name occurs in India because the product is 
referred to as ``Calcitriol'' both before and after encapsulation. The 
Calcitriol is the only active ingredient. After being mixed with the 
inactive ingredients serving as coloring agents, preservatives, and 
fillers, it retains its chemical and physical properties and is merely 
put into a dosage form in India. Finally, no change in use occurs in 
India because the Calcitriol retains the same predetermined medicinal 
use for vitamin D3 deficiency. As a result, no substantial 
transformation occurs during the encapsulation process in India and the 
country of origin of the final Calcitriol capsules remains Switzerland, 
a WTO GPA country, where the Calcitriol is produced.
    Accordingly, the instant Calcitriol capsules would be products of a 
foreign country or instrumentality designated pursuant to 19 U.S.C. 
2511(b)(1).

HOLDING:

    Based on the facts presented, the country of origin of the 
Calcitriol capsules is Switzerland, a WTO GPA country, for purposes of 
U.S. Government procurement. Therefore, the Calcitriol soft-shell 
capsules would be products of a foreign country or instrumentality 
designated pursuant to 19 U.S.C. 2511(b)(1).
    Notice of this final determination will be given in the Federal 
Register, as required by 19 CFR 177.29. Any party-at-interest other 
than the party which requested this final determination may request 
pursuant to 19 CFR 177.31 that CBP reexamine the matter anew and issue 
a new final determination. Pursuant to 19 CFR 177.30, any party-at-
interest may, within 30 days of publication of the Federal Register 
Notice referenced above, seek judicial review of this final 
determination before the Court of International Trade.

    Sincerely,

Alice A. Kipel,

Executive Director, Regulations and Rulings, Office of Trade.

[FR Doc. 2021-19515 Filed 9-9-21; 8:45 am]
BILLING CODE 9111-14-P