We are regularly asked questions about the tariff classification for Canada customs duty purposes of health food products. Certain products that are classified in the United States under HS Code 2106 are classified under HS Codes 3003 (medicaments not in measured doses) or 3004 (medicaments in measured doses) for Canada customs purposes. This is an issue for US companies who import products from overseas and ship throughout the United States and into Canada from a US warehouse. This is also an issue for companies who ship to both the United States and Canada. The HS classification into Canada is not the necessarily the same number used for imports to the United States.
This is relevant because the MFN rate in Canada for H.S. Codes 3003 and 3004 is duty free. The duty rate for HS Code 2106 ranges up to 11% (and certain over access items are over 200%). Using the incorrect number can be costly.
D-Memorandum D-10-14-30 “Tariff Classification of Medicaments Including Natural Health Products” sets out the Canada Border Services Agency’s (“CBSA”) policy, which is based on Canadian case law.
Medicaments (excluding goods of heading 30.02, 30.05 or 30.06) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packings for retail sale.
Medicaments (excluding goods of heading 30.02, 30.05 or 30.06) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale.
A product can be classified as a medicament under heading 30.03 or 30.04 if it satisfies the following:
(a) meets the terms of the heading and any relative legal note; and
(b) evidence attests to the product’s therapeutic or prophylactic use; and
(c) the goods are presented as a therapeutic or prophylactic product.
In their decisions, the Canadian International Trade Tribunal and the Federal Court of Appeal made a number of observations and drew certain conclusions in order to classify medicaments in the Harmonized System (HS) as follows:
(a) There is no requirement in the Harmonized System’s legal notes, in the provisions of headings 30.03 and 30.04, or in the supporting Explanatory Notes, that a certain level of medicinal ingredients must be in a product in order for it to be classified as a medicament. Furthermore, there is no burden to scientifically prove that the product actually cures a disease, illness, or ailment. The terms of the heading do not require scientific proof of medical efficacy. However, the intent of headings 30.03 and 30.04 is to provide for goods that are in the nature of medicaments. In accordance with the terms of the headings, there must be some therapeutic or prophylactic (medicinal) use for the product. Simply declaring that a product is a medicament does not qualify it for classification under heading 30.03 or 30.04.
(b) Marketing, packaging, use, and other evidence (e.g. from a professional medical practitioner or a recognized text) that can attest to a product’s medicinal purpose (therapeutic or prophylactic) are important determining factors in classifying the product under heading 30.03 or 30.04. There must be some indication as to the use of the product in the preventing or treating of a disease, illness, or ailment.Examples
– St. John’s wort oil extract, mixed with olive oil, is used to treat such things as mild to moderate depression, tension headaches and insomnia. When imported in bulk it is classified under heading 30.03, or under heading 30.04 when put up in measured doses or in forms or packings for retail sale.
– Re-distilled water is classified under heading 28.51. However, when put up as a medicament in measured doses or in forms or packings for retail sale, for use in the treatment of a disease, it is classified in heading 30.04.
– Sulphur put up for retail sale for a therapeutic purpose (e.g. as a scabicide) is classified as a medicament under heading 30.04 and not under heading 25.03 or 28.02.
(c) Medicaments are generally not included in the common understanding of the term “food”. However, certain nutritional dietary supplements, sometimes considered food preparations, can be classified in heading 30.04 as a medicament. This is the case when the supplement is expressly for use in the prevention or treatment of a disease, illness or ailment and put up in a form specified in that heading. For example, garlic powder packaged for use in preparing food (i.e. for flavouring) is classified in heading 07.12. However, when garlic powder is prepared as tablets (measured doses), or in another form or packing for retail sale, and sold for its curative properties (e.g. in the treatment of cardiovascular disease), the garlic is classified as a medicament under heading 30.04.
(d) Food preparations contain mainly nutritional substances; the major ones being protein, carbohydrates and fats. Therefore, products consisting essentially of one or many nutritional substances and employed in nutritional therapy, utilizing ingredient avoidance in the attainment of a particular health-related outcome, remain considered as food preparations and should be classified under their own appropriate headings despite their acknowledged therapeutic or prophylactic effect. For example, ordinary foods and beverages, as well as products such as amino acid-based powdered formulas, containing single amino acids rather than complex proteins that facilitate digestion by infants (0 to 12 months) and children (1 to 10 years) who are unable to metabolize the long chains of amino acids that comprise the standard food proteins found in breast milk, infant formulas, soy or extensively hydrolyzed protein formulas are classified in heading 21.06.
Many products classified as a food supplement in the United States can be classified as a medicament in Canada. For example, throat pastilles or cough drops can be classified under heading 30.04 when put up in measured doses or in forms or packaging for retail sale provided they contain a medicinal ingredient(s) such that each pastille or cough drop has a therapeutic or prophylactic use.
In addition, vitamins and vitamin preparations are considered in Canada to have therapeutic and prophylactic uses. Vitamins have been proven effective in the treatment and prevention of certain diseases (e.g. vitamin C for scurvy and vitamin B12 for pernicious anaemia) and can thus be classified as a medicament. The vitamins considered as medicaments do not include the goods provided for in heading 29.36, unless they are put up in measured doses or in forms or packaging for retail sale for a therapeutic or prophylactic purpose. If a vitamin, or vitamin preparation, is ingested to reverse or prevent (therapeutic or prophylactic) a deficiency that may lead to a disease, illness, or ailment, it follows that the purpose of ingesting the product is to reverse or prevent that malady. It is suggestive though not conclusive in all cases that such vitamin products, intended for human or animal use, are medicaments.
Declaring that a product is a medicament does not make it so for tariff classification purposes. There must be some evidence to support such a claim. Trade or technical publications issued by the manufacturer or producer can help in making a determination. Similarly, technical papers published in professional journals and authored by health practitioners may also provide information about a product’s therapeutic or prophylactic uses. This includes an opinion of an expert or specialist in the particular disease, illness or ailment.
Goods such as certain traditional natural health products, which are considered by some to be medicaments, are excluded from headings 30.03 and 30.04. For example, diabetic or fortified foods, food supplements for general health and well-being and tonic beverages (tonic wine with herbs) etc., are specifically excluded (see legal Note 1 to Chapter 30) even though they may be considered a medicament by their use and reputation in traditional herbal medicine.
If the label of a product does not provide the necessary information to determine if a product has therapeutic or prophylactic properties, or if the product’s therapeutic or prophylactic benefits are not clear, the importer must provide the necessary information.
If you have any questions, please call Cyndee Todgham Cherniak at 416-307-4168 or contact at firstname.lastname@example.org.