MAR-2-05 RR:CR:SM 561002 MLR

Robert J. Leo, Esq.
Meeks & Sheppard
330 Madison Avenue
39th Floor
New York, NY 10017

RE: Country of Origin Marking on surgical instruments; machined Hungary; Pakistan; Germany forgings; 19 CFR 134.32(c) and (o); 19 CFR 134.43(a)

Dear Mr. Leo:

This is in reference to your letter of May 15, 1998, requesting a ruling on behalf of Johnson & Johnson Professional Inc. ("J & J"), concerning the country of origin marking on certain surgical instruments. Samples were submitted with your request.

FACTS:

It is stated that J & J plans to manufacture various surgical instruments, including forceps and surgical scissors, in Germany using German stainless steel which are forged to the shape of the particular instrument required. Samples of three forgings and their respective finished instruments (straight 5 inch long halsted mosquito forceps, straight 6 3/4 inch long mayo scissors, and straight 8 inch long rochester-ochsner forceps) were submitted. The German forgings are then shipped to either Hungary or Pakistan. In Hungary or Pakistan, the forgings will be milled and boxlock pins in the hinge joint will be inserted. They will also be ground, beveled, and if necessary heat treated, tested for hardness, polished, and cleaned. The instrument will be stamped with the word "Stainless" followed by the word, "Germany".

It is stated that the instruments will then be returned to Germany for final, intensive inspection and adjustment if necessary. The instruments that pass inspection will then be shipped to Switzerland where they will each be packaged in a clear PVC bag attached to a card. The card is labeled with the name "Johnson & Johnson Orthopaedics", the brand name "Codman", and "Johnson & Johnson Professional Inc., Raynham, MA 02767-0350" and phone number. On the same side of the card, below the phone number, the card is marked "Made in Germany".

ISSUE:

Whether the proposed marking consisting of "Stainless" and "Germany" on the finished instruments and the marking on the card attached to the PVC bag satisfies the marking requirements of 19 U.S.C. 1304.

LAW AND ANALYSIS:

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations {19 CFR 134.1(b)}, defines "country of origin" as the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of the marking laws and regulations.

For country of origin marking purposes, a substantial transformation of an imported article occurs when it is used in the manufacture, which results in an article having a name, character, or use differing from that of the imported article. On the other hand, if the manufacturing or combining process is merely a minor one which leaves the identity of the imported article intact, a substantial transformation has not occurred and an appropriate marking must appear on the imported article so that the consumer can know the country of origin. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983).

In National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993), the court considered sockets and flex handles which were either cold formed or hot forged into their final shape prior to importation, speeder handles which were reshaped by a power press after importation, and the grip of flex handles which were knurled in the U.S. The imported articles were then heat treated which strengthened the surface of the steel, and cleaned by sandblasting, tumbling, and/or chemical vibration before being electroplated. In certain instances, various components were assembled together which the court stated required some skill and dexterity. The court determined that the imported articles were not substantially transformed and that they remained products of Taiwan. In making its determination, the court focused on the fact that the components had been cold-formed or hot-forged "into their final shape before importation", and that "the form of the components remained the same" after the assembly and heat-treatment processes performed in the U.S. Although the court stated that a predetermined use would not necessarily preclude a finding of a substantial transformation, it noted that such determination must be based on the totality of the evidence. The court then concluded that no substantial change in name, character or use occurred as a result of the processing performed in the U.S.

In Headquarters Ruling Letter (HRL) 559847 January 2, 1997, Customs considered U.S.-origin stainless steel sheets cut into strips of suitable width, which were further cut into blanks. The blanks were then heated and hammer forged. The forgings were annealed and trimmed, and cold stamped to straighten the trimmed forgings. The forgings were then shipped to Pakistan where they underwent milling operations to cut the box, rachet, and jaw serrations into the forceps; assembled; ground; filed; heat treated, including tempering and testing for hardness; acid pickled; polished; chemical cleaned; and buffed. It was held that inasmuch as the forgings resembled the shape and size of the completed instruments upon importation into Pakistan, the operations performed in Pakistan did not substantially transform the forgings into a new and different article of Pakistani origin. Accordingly, the origin of the finished instruments was the U.S. See also HRL 560441 dated November 18, 1997 (no substantial transformation when German rough forgings were machined, assembled, rough polished, heat treated, and cleaned in Hungary); and HRL 558747 dated January 20, 1995.

We find the processes in this case to be similar to the ones considered in HRL 560441 and HRL 559847. Accordingly, pursuant to those rulings and National Hand Tool, we find that there is no substantial transformation of the forgings in Hungary (or Pakistan), and the country of origin of the finished instruments for marking purposes will be Germany. Therefore, the finished surgical instruments may be marked "Stainless Germany", "Product of Germany", or "Made in Germany". We also find that the U.S. address on the card attached to the PVC bag which holds the surgical instrument triggers the requirements of 19 CFR 134.46. However, the marking on the card, "Made in Germany", below the telephone and U.S. address satisfies the requirements of 19 CFR 134.46.

HOLDING:

Based upon the information provided, we find that the country of origin of the finished surgical instruments is Germany. Therefore, the finished surgical instruments may be marked "Stainless Germany", "Product of Germany", or "Made in Germany". Furthermore, the U.S. address on the card attached to the PVC bag which holds the surgical instrument triggers the requirements of 19 CFR 134.46, but the marking, "Made in Germany", below the telephone and U.S. address satisfies its requirements.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,


John Durant, Director
Commercial Rulings Division