MAR-2 S:N:N6:351 810501

Mr. Bernard R. Nottling
Rudolph Miles and Sons
4950 Gateway East
P.O. Box 11057
El Paso, TX 79983

RE: COUNTRY OF ORIGIN MARKING OF IMPORTED NON-STERILE SUTURE BRAID AND NON-STERILE SUTURES WITH NEEDLES; ARTICLE 509

Dear Mr. Nottling:

This is in response to your letter dated April 21, 1995 requesting a ruling on the country of origin marking requirements for imported non-sterile suture braid and non-sterile sutures with needles. Marked samples were submitted with your letter for review.

FACTS:

You intend to import non-sterile suture braid and non- sterile sutures with needles from Mexico. The non-sterile suture braid consists of silk strands which are braided in the United States. These braids are sent to Mexico where they are wrapped in a paper carrier, sealed in an individual package, and packed into a retail carton containing twelve individual packages. The retail cartons are labelled on one end with the name and address "Lukens Medical Corporation, Rio Rancho, N.M. 87124 U.S.A." The suture braid (i.e., without needles) is claimed to be U.S. goods returned without having been advanced in value or improved in condition.

The non-sterile sutures with needles consist of the same U.S.-made silk braid described above, attached to suture needles, which are also said to be of U.S. origin. These sutures are assembled in Mexico from the silk braid and the needles. They are packaged and labelled in Mexico in a similar manner to that described above for the silk braid, with the same U.S. geographical reference. After importation into the United States, the sutures with needles are sterilized and further packaged. They are claimed to be goods of a NAFTA country, that are later to be further processed in the U.S. into finished articles.

ISSUE:

Must the imported non-sterile suture braid and non-sterile sutures with needles be marked to indicate their country of origin?

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 the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the interim amendments to the Customs Regulations published as T.D. 94-4 (59 Fed. Reg. 109, January 3, 1994) with corrections (59 Fed. Reg. 5082, February 3, 1994) and T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993). These interim amendments took effect on January 1, 1994 to coincide with the effective date of the NAFTA. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in T.D. 94-4 (adding a new Part 102, Customs Regulations). The marking requirements of these goods are set forth in T.D. 94-1 (interim amendments to various provisions of Part 134, Customs Regulations).

MARKING OF NON-STERILE SUTURES WITH NEEDLES:

Section 134.1(b) of the interim regulations, 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j) of the interim regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the interim regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the interim regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

In order to determine the country of origin marking requirements we must first apply the NAFTA Marking Rules in order to determine whether the imported non-sterile suture with needle "is a good of a NAFTA country", prior to being further processed in the U.S.

Part 102 of the interim regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the interim regulations, sets forth the required hierarchy for determining country of origin for marking purposes.

Applying the NAFTA rules of origin set forth in Part 102 of the interim regulations to the facts of this case, we find that, for marking purposes, the imported non-sterile sutures with needles are goods of a NAFTA country prior to being further processed in the U.S.

The only issue which remains is whether the U.S. processor is the ultimate purchaser within the meaning of section 134.35(b). Section 134.35(b) of the interim regulations, provides that

a good of a NAFTA country which is to be processed in the United States in a manner that would result in the good becoming a good of the United States under the NAFTA marking rules is excepted from marking. Unless the good is processed by the importer or on its behalf, the outermost container of the good shall be marked in accord with this part.

Based on the facts of this case, we find that the imported non-sterile sutures with needles, as a result of the further processing performed in the U.S., become articles of U.S. origin under Part 102 of the interim regulations.

Accordingly, the imported non-sterile sutures with needles, which are goods of a NAFTA country that become U.S. articles as a result of being further processed in the U.S., in the manner described above, are excepted from marking and only the outermost containers are required to be marked with the country of origin "Mexico" if the imported goods are not processed by the importer or on its behalf.

However, because a U.S. reference appears on the imported non-sterile sutures with needles when they are imported into the U.S., it is necessary to consider the necessity for additional marking. 19 CFR 134.36(b) provides that an exception from marking shall not apply to any article or retail container bearing any word letters, names, or symbols described in section 19 CFR 134.46 or 19 CFR 134.47 (e.g. geographic references which imply that article was made or produced in a country other than actual country of origin). The purpose of this requirement is to prevent the possibility of misleading or deceiving the ultimate purchaser of an article as to the actual origin of the imported good.

Customs has recently determined that the special requirements of 19 CFR 134.36(b) should not be applied automatically to all imported articles or their containers which bear a non-origin geographical reference. In instances where the imported article is substantially transformed in the U.S. by the ultimate purchaser (U.S. manufacturer), as with the imported non-sterile sutures in this case, Customs has held that the special requirements of 19 CFR 134.36(b) and 19 CFR 134.46 are not applicable since the ultimate purchaser would not be misled by the U.S. reference.

This same rationale applies to this case. The U.S. manufacturer which substantially transforms the imported non- sterile sutures with needles is the ultimate purchaser. Assuming, the ultimate purchaser receives the imported goods in containers properly marked with the country of origin, it would know their country of origin and would not be misled by the U.S. reference "Rio Rancho, N.M. 87124 U.S.A." Therefore, the special marking requirements of 19 CFR 134.36(b) are not applicable.

Accordingly, the imported non-sterile sutures with needles which are processed in the manner described above are not required to be individually marked with the country of origin and can be imported marked with a U.S. reference "Rio Rancho, N.M. 87124 U.S.A." provided they are imported in containers properly marked with the country of origin and that they will reach the ultimate purchaser (U.S. manufacturer) in the original marked containers and the U.S. manufacturer will only use the imported non-sterile sutures with needles as described above.

MARKING OF NON-STERILE SUTURE BRAID:

With regard to the non-sterile suture braid, products of the U.S. exported and returned are excepted from the general country of origin marking requirements. See 19 CFR 134.32 (m). This provision applies if the U.S. products are returned without having been substantially transformed abroad. In this case, nothing is done to the non-sterile suture braid except packaging. Therefore, they are excepted from marking under 19 CFR 132.32 (m).

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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,

Jean F. Maguire
Area Director
New York Seaport