CHALLENGE

A Marken customer is bringing an Active Pharmaceutical Ingredient (API) into the US for testing and further manufacturing. Marken was selected as their supply chain logistics solution provider because they needed to ensure that their product was handled in an expeditious manner, particularly through the regulatory agencies as the product entered the United States from Europe.
Our client had been told that their product would incur an ad valorem duty of 6.5% of the entered value based on the original HTS classification, or could possibly use a harmonized tariff prototype classification for a duty-free status. Although the USHTS Chapter 98 (special classification provision) for prototypes would be duty-free, this type of classification commonly results in cargo release delays and further document review by agencies.

SOLUTION

Marken initiated a full review of their product documentation and validation for CBP, FDA, and USDA, prior to export. Upon reviewing the client’s documentation, Marken noticed that the Chemical Abstract System number (CAS) indicated in the Material Safety Data Sheet (MSDS) that the API being brought to the United States actually was eligible for special tariff treatment. Marken was able to confirm that the product was indeed listed in the duty free special provision in the pharmaceutical index of the US Tariff.

Working closely with United States Customs, a licensed Customs broker, and using our knowledge of import and trade compliance regulations, Marken was able to provide the client with all of the details necessary to achieve duty-free status and to avoid delays each time a product was being shipped. The FDA did suggest that the client submit an IFE (Import for Export) as the affirmation code of compliance (AOC). This AOC, which associated with the appropriate FDA product code, will notify FDA that this shipment is for further manufacturing.

OUTCOME

As a result of Marken’s attention to detail and knowledge of regulatory and Customs requirements for pharmaceutical products, Marken’s client will save around $13,000 on this shipment of the API and any subsequent shipments entering the US under the same provisions and designation.

 

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