CLA-2 OT:RR:CTF:TCM H218797 RES
Mr. Robert Leo
Meeks, Sheppard, Leo & Pillsbury
44th Floor
570 Lexington Avenue
New York, NY 10022
RE: Country of Origin Marking of Bengay® Ultra Pain Relieving Patch imported from Taiwan.
Dear Mr. Leo:
This is in response to your letter dated May 7, 2012, on behalf of your client Johnson & Johnson Consumer Products Company, Inc. for a binding ruling on the country of origin marking of Bengay® Ultra Pain Relieving Patch (“the Patch”) imported from Taiwan.
FACTS:
The subject merchandise that Johnson & Johnson intends to import from Taiwan is a topical analgesic patch. The Patch, called a hydrogel patch, is described as a self-adhesive rectangular non-woven polyester patch that contains Menthol 5% and is intended to adhere to the skin of a consumer to provide temporary pain relief from minor aches and pains associated with bruises, arthritis, strains and sprains. The active ingredient in the Patch is L-Menthol. The Patch comes in two sizes, 10 x 14 cm and 10 x 20 cm.
There are two primary components of the Patch: the L-Menthol and the non-woven fabric material. L-Menthol is manufactured in bulk in China and imported into Taiwan as a solid. The non-woven fabric for the patch is manufactured in Japan. These components are shipped to Taiwan where they undergo further manufacturing to create the Patch. The bulk L-Menthol is melted and mixed with purified water, Sorbitol, a preservative premix, an ingredient called Nikasol TS-620, and an ingredient called an Acrylate premix, to create a medical plaster mix. This manufacturing process decreases the concentration of the L-Menthol and makes it usable as a coating. Next, the medical plaster mixture is coated onto the non-woven fabric in a gel transcriber and then the resulting coated fabric is cut into the specified shapes. The finished product is inspected, tested, and packed in retail packaging, then boxed for shipping.
ISSUE:
What is the country of origin marking requirement of the Bengay® Ultra Pain Relieving Patch imported from Taiwan?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304 (2011)), provides that unless excepted, every article of foreign origin imported into the United States 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 United States, 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940) (emphases added).
Part 134, U.S. Customs and Border Protection (CBP) Regulations (19 C.F.R. § 134 (2011)) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b) defines “country of origin” as:
[T]he country of manufacture, production, or growth of any article of foreign origin entering the United States. 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 regulations]…
A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. M.B.I. Merchandise Industries, Inc. v. United States, 16 C.I.T. 495, 502 (1992) (citing United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267, 270 (C.A.D. 98) (1940)). The question of whether a substantial transformation occurs for marking purposes is a question of fact; to be determined on a case-by-case basis. National Hand Tool Corp. v. United States, 16 C.I.T. 308, 311 (1992) (quoting Uniroyal Inc. United States, 3 C.I.T. 220 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983)).
There are two components imported into Taiwan that are further processed: bulk L-Menthol and the non-woven fabric. In regard to the non-woven fabric, it undergoes a substantial transformation during manufacture into the final pain-relieving patch product because cutting it into smaller sizes and embedding it with a medicinal plaster mixture changes the name, character, and use of the fabric from simply a fabric material with no medicinal properties to one with an analgesic function as a topical pain-reliever.
In regard to the bulk L-Menthol component, CBP has considered a number of factors in considering whether articles imported in as a bulk ingredient underwent a substantial transformation.
In HQ 562316, dated April 1, 2002, which involved the manufacture of trans-dermal nicotine patches (also inhalers and nasal sprays), CBP determined that the bulk-nicotine was changed in character and use. There was a change in character because the nicotine went from a bulk-ingredient to a patch adhesive dressing formulated for timed release. There was a change in use because the bulk-nicotine went from being unsuitable for human use to a form usable as an aid in treating a person’s nicotine addiction. Similarly, in HQ 563301, dated August 26, 2005, CBP determined that a bulk chemical called “parathormone” underwent a substantial transformation when subjected to a process to produce single-dose vials because the process transformed the raw bulk-parathormone from an “unstable, non-sterile, frozen material unsuitable for human use into a pharmaceutical agent ready for human use.”
However, in HQ 561975, dated April 3, 2002, bulk sevoflurane was filtered to remove impurities, tested, and packaged into smaller doses. CBP determined that there was no substantial transformation because there was no change in the character of the imported sevoflurane as the chemical and physical properties remained the same, there was no change in name as the name “sevoflurane” was identified on the label, and the sevoflurane’s use as an inhalable anesthetic was predetermined at the time of importation. In HQ 561544, dated May 1, 2000, CBP determined that an imported bulk chemical substance used to make an antibiotic was not substantially transformed by testing the substance for potency, filtering to remove impurities, and packaging into smaller sizes.
Considering prior rulings involving bulk substances, relevant factors include: whether an article is fit for human use (consumption or medicinal uses); whether there is a change in use and/or is the use predetermined at time of import; whether there is a change in name; and the extent the chemical or physical properties are changed.
In this case, the bulk L-Menthol’s use and function are not predetermined at importation because it has many consumer and industrial uses, for example, as an ingredient in pharmaceuticals, pesticides, and as a flavoring in foods, beverages, toothpaste, cigarettes, etc. As with the articles in HQ 562316 and HQ 563301 the bulk L-Menthol as imported is unfit for human use, because its high concentration is irritating to the skin and eyes which makes it unusable as an analgesic. The manufacturing process alters the L-Menthol concentration to make it fit for human use as an analgesic and at this point, the L-Menthol’s use is fixed. Also, there is also a change in name in the L-Menthol (as well as the non-woven fabric). After the manufacturing process, the L-Menthol, after being processed to create the medical plaster mix and then combined with the non-woven fabric, becomes an “analgesic patch” (or in common terms a “pain relieving patch”). Finally, the character of the L-Menthol is changed because unlike the articles in HQ 561975 and HQ 561544, the L-Menthol is not simply purified and put into smaller doses, but rather its concentration is diluted through a process of mixing with other chemical substances to create a mixture that is embedded onto a fabric material.
In summary, after examining all the factors based upon the information provided, CBP finds that the bulk L-Menthol and non-woven fabric when made into a pain-relieving patch, are substantially transformed by manufacture in Taiwan and that the finished Patch should be marked “Made in Taiwan” for purposes of 19 U.S.C. § 1304.
HOLDING:
Pursuant to 19 U.S.C. § 1304, the bulk L-Menthol and non-woven fabric imported from China and Japan, respectively, and processed in Taiwan into pain-relieving patches are substantially transformed in Taiwan.
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 CBP officer handling the transactions.
Sincerely,
Monika Brenner, Chief
Valuation and Special Programs Branch