MAR-2-05 RR:CR:SM 561189 MLR
Robert J. Leo, Esq.
Meeks & Sheppard
330 Madison Avenue
39th Floor
New York, NY 10017
RE: Country of origin of surgical instruments; forging;
forceps; surgical scissors; clamps; substantial
transformation
Dear Mr. Leo:
This is in reference to your letter of October 15, 1998,
requesting a ruling on behalf of Miltex, Inc., concerning the
country of origin of certain surgical instruments. Samples
were submitted with your request.
FACTS:
It is stated that the surgical instruments are forged in
Germany from stainless steel made in Germany. The forgings
are for various surgical instruments, including forceps,
surgical scissors, and clamps. It is stated that the forged
articles are shaped to the required, specified shape for the
particular instrument. The following forgings and their
respective finished products of various surgical instruments
were submitted with this request:
(1) a forging which is made into serrated adson forceps;
(2) a forging which is made into adson forceps with 1x2
teeth;
(3) a forging which is made into 5 1/2" straight Kelly
forceps or 5 1/2" curved forceps;
(4) a forging which is made into straight mosquito
forceps or curved mosquito forceps;
(5) a forging which is made into 4 1/2" straight iris
scissors or 4 1/2" curved iris scissors; and
(6) a forging which is made into 5 1/4" backhaus towel
clamps.
It is stated that the forgings are inspected in Germany
and shipped to Pakistan for further working and finishing.
In Pakistan, the processing will include milling, assembling
(by welding for forceps), bending of jaws or blades (if
curved patterns are made), grinding and filing, hardening and
annealing, polishing and buffing, electro-polishing, etching,
and cleaning. Each instrument will also be stamped
"Stainless" and "Germany." It is also stated that there are
instances where one forging can be used to produce
instruments with different lengths through the addition of
tungsten carbide inserts at the working ends. It is claimed
that the inserts do not change the instrument other than its
length, and give it more durable working ends.
ISSUE:
Whether the surgical instruments are products of Germany
or Pakistan.
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 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).
It is claimed that the surgical instruments are products
of Germany based on National Hand Tool Corp. v. United
States, 3 CIT 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir.
1993), and Headquarters Ruling Letter (HRL) 561002 dated May
21, 1998; HRL 560441 dated November 18, 1997; HRL 560239
dated June 17, 1997; and HRL 559847 dated January 2, 1997.
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 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. In HRL
560441 dated November 18, 1997, it was held that German rough
forgings sent to Hungary where they were machined, assembled,
and finished by removing a layer of impurities from the
forgings did not undergo a substantial transformation in
Hungary.
We find the processes in this case to be similar to the
ones considered in HRL 559847 and HRL 560441. Accordingly,
pursuant to those rulings and National Hand Tool, we find
that there is no substantial transformation of the forgings
in Pakistan, and the country of origin of the finished
instruments will be Germany. We note that each forging is
shaped in the final shape of the finished surgical
instrument. For example, the forging for the iris scissors
contains a flatter tip on one side. The tip of the forging
for the kelly forcep is straighter than the forging for the
mosquito forceps, and the tip of the backhaus towel clamp is
more curved. While we also note that some forgings may be
used to produce instruments with different lengths and some
will be made into either a curved or straight surgical
instrument, in National Hand Tool, the reshaping of the
speeder handle was found not to be extensive enough to result
in a substantial transformation. Therefore, we do not find
that minor lengthening or bending is extensive enough to hold
that the forging undergoes a substantial transformation. As
in HRL 560441 and HRL 559847, the surgical instrument forging
is not changed in shape to such a degree to result in a
substantial transformation. Accordingly, we find that the
country of origin of the finished surgical instruments will
be Germany -- where the forgings are made.
HOLDING:
Based on the facts and samples presented, we find that
the processing in Pakistan does not result in a substantial
transformation of the German forgings. Therefore, the
country of origin of the finished surgical instruments is
Germany and they may be marked "Product of Germany," "Made in
Germany," or "Stainless Germany."
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