Over 1,200 Pharmaceuticals/Chemical Intermediates Became Duty-Free Effective January 1, 2007
On December 29, 2006, President Bush signed Proclamation 8095 to implement a multilateral agreement under the auspices of the World Trade Organization (WTO) to further revise the list of pharmaceuticals and chemical intermediates by modifying the Harmonized Tariff Schedule (HTS) Pharmaceutical Appendix.
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(The Pharmaceutical Appendix lists pharmaceutical products and chemical intermediates that are eligible for duty-free treatment when imported from countries eligible for column 1 general duty rates. It is also referred to as the "K" list because the letter "K" must precede the HTS number on entry documentation to indicate the product's eligibility for duty-free treatment. Products identified with a "K" must also be listed in the Appendix to be eligible for duty-free entry.)
Proclamation Adds Over 1,200 New Products to Pharmaceutical Appendix
In order to implement the multilateral agreement and to make technical corrections to the tariff treatment accorded to such products, the Pharmaceutical Appendix is modified as follows effective with respect to articles entered or withdrawn from warehouse for consumption on or after January 1, 2007:
Adding approximately 824 pharmaceutical products to Table 1. Adding approximately 824 pharmaceutical products (as described by their International Non-Proprietary Names (INNs)) and their Chemical Abstract Service (CAS) registry numbers to Table 1. Table 1 lists products, as described by their INNs, that are duty-free under HTS General Note (GN) 13.
Adding 90 chemical or INN derivative names to Table 2. Adding approximately 90 chemical or INN derivative names to the list of products in Table 2. Salts, esters, and hydrates (i.e., derivatives) of the products listed in Table 1 that contain in their names any of the prefixes or suffixes listed in Table 2 are also duty-free under GN 13, provided that any such salt, ester, or hydrate is classifiable in the same 6-digit HTS provision as the relevant Table 1 product.
Adding 470 intermediates to Table 3. Adding approximately 470 intermediates to Table 3. Table 3 lists additional products and their CAS registry numbers which are duty-free under GN 13.
BP Note
During the Uruguay Round in 1995, the U.S. and 21 other trading countries agreed to the reciprocal elimination of duties on pharmaceutical products, their derivatives, and certain chemical intermediates used to manufacture pharmaceuticals. This agreement is known as the Pharmaceutical Zero-for-Zero Initiative. For the U.S., products covered by this agreement to date are found in the HTS Pharmaceutical Appendix, which allows for duty-free treatment of the listed products. The agreement has previously been updated twice, in 1997 and 1999. (See ITT's Online Archives or 07/08/99 news, 99070745, for BP summary of 1999 update.)
According to the ITC, the changes to the Pharmaceutical Appendix are reflected in both the Preliminary 2007 HTS (effective January 1, 2007) and the draft HTS chapters (effective on or about February 3, 2007).
Presidential Proclamation 8095, including appendix (FR Pub 01/04/07) available at http://a257.g.akamaitech.net/7/257/2422/05jan20071800/edocket.access.gpo.gov/2007/pdf/07-00002.pdf.