OT:RR:CTF:FTM H318838 TJS
Mr. David Lawrence Greene
6042 E Brianna Road
Cave Creek, AZ 85331
RE: Country of Origin Marking; Suture in a Cannula
Dear Mr. Greene:
This is in response to your request for a binding ruling, dated April 26, 2021, regarding the country of origin marking of a suture in a cannula. Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division ("NCSD") for review. Our ruling is set forth below.
The product under consideration is a medical device consisting of two items: a polydioxanone ("PDO") absorbable suture and a hollow cannula made of medical grade plastic. According to your submission, the product is used for "soft tissue approximation." Medical professionals use the cannula to subcutaneously place the suture thread. Once placed, the cannula is removed, and the suture thread stays in place to "lift" soft tissue. The cannula is manufactured in the United States in various sizes. The suture is made and pre-cut in the Republic of Korea ("South Korea") and may be smooth or barbed. Once imported into the United States, the suture is loaded inside the cannula. The cannula/suture combo will be packaged in a clear plastic slip-on piece, then surrounded with a peel pack and sterilized. Licensed medical professionals purchase the packages individually or in a bulk container.
What is the country of origin marking of the suture in a cannula?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), 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 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).
Part 134, Customs and Border Protection ("CBP") Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b) defines "country of origin" as "the 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 to render such other country the "country of origin" within the meaning of this part." A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use, which differs from the original material subjected to the process. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982).
In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 C.I.T. 204, 573 F. Supp. 1149 (1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or combining process is a minor one that leaves the identity of the imported article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item's components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, or use are primary considerations in such cases. No one factor is determinative.
In National Hand Tool v. United States, 16 C.I.T. 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993), the court determined that certain hand tool components used to make flex sockets, speeder handles, and flex handles were not substantially transformed within the United States. The components were cold-formed or hot-forged into their final shape prior to importation, except for speeder handlebars, which were reshaped by a power press after importation, and the grips of the flex handles which were knurled in the United States. The imported items were heat treated to strengthen the components, sand-blasted to clean the components, and electroplated to better enable the components to resist rust and corrosion. In making this determination, the court noted that the processing which occurred within the United States did not alter the name of the imported components, the character of the parts remained substantially unchanged upon the completion of such processing, and the intended use of the articles was predetermined at the time of importation. Although the court recognized that a predetermined use for imported articles does not preclude a finding of substantial transformation, the court noted that each component was intended to be incorporated in a particular finished mechanic's hand tool.
In determining the country of origin marking for the suture in a cannula, the question to be resolved is whether inserting the South Korean suture into the U.S.-origin cannula substantially transforms the suture into a product of the United States. We find that the processing in the United States does not change the name, character, or use of the imported sutures. First, we find that the imported pre-cut sutures do not undergo a change in name when they are inserted into the cannula and sterilized. The name of the suture, as imported, remains the same as that article in completed medical device.
We further find that there is no change in character as a result of the assembly process in the United States. For courts to find a change in character, there often needs to be a substantial alteration in the characteristics of the articles or components. See, e.g., National Hand Tool, 16 C.I.T. at 311. Courts have not found a change in character when the "form of the components remained the same." Id. In other cases, courts have looked to the "essence" of a completed article to determine whether an imported article has undergone a change in character as a result of post importation processing. Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1318 (2016) (citing Uniden America Corp. v. United States, 120 F. Supp. 2d 1091, 1095-1098 (2000) and Uniroyal, Inc. v. United States, 3 C.I.T. 220). In Uniroyal, Inc. v. United States, 3 C.I.T. at 225, the court held that imported shoe uppers added to an outer sole in the United States were the "very essence of the finished shoe" and thus the character of the product remained unchanged and did not undergo substantial transformation in the United States. Here, the suture maintains its form and material composition after the processing in the United States, which simply involves inserting the pre-cut suture into the cannula tube. We also find that the suture imparts the "essence" of the finished medical devices. The cannula is merely the mechanism by which the suture is placed in the skin. Once placed, the medical provider removes the cannula while the suture thread remains in place to "lift" soft tissue. Hence, we find that there is no change in character due to the processing in the United States.
In addition, we find that the U.S. processing does not change the sutures' use. In looking at whether there is a change in use, courts have found that a change in use has occurred when the end use of the imported product was no longer interchangeable with the end use of the product after post importation processing; in contrast, when the end use was predetermined at the time of importation, courts have generally not found a change in use. Energizer Battery, 190 F. Supp. 3d at 1319 (citing Ferrostaal Metals Corp. v. United States, 664 F. Supp. 535, 540-41 (1987); National Hand Tool, 16 C.I.T. at 311-12; Ran-Paige Co., Inc. v. United States, 35 Fed. Cl. 117, 121-22 (1996); and Uniroyal, 3 C.I.T. at 226). "When articles are imported in prefabricated form with a pre-determined use, the assembly of those articles into the final product, without more, may not rise to the level of substantial transformation." Id. (citing Uniroyal, 3 C.I.T. at 226). At the time of importation, the sutures are designed to stitch or hold together skin. After their insertion into the cannula, the suture maintains this function. Here, the sutures are used to draw the patient's skin taut to emulate a cosmetic face lift. Thus, their predetermined end use does not undergo a change due to the processing in the United States. We also note that sterilization in the United States does not substantially transform the imported suture thread. See Headquarters Ruling Letter ("HQ") 561167 (Dec. 14, 1998).
Accordingly, based on facts that you have presented, we find that combining the suture thread with a cannula and sterilizing the package does not substantially transform the imported suture into a product of the United States. Moreover, since the suture imparts the "essence" of the finished medical devices for the country of origin purposes, the final product must be marked to indicate that the country of origin of the suture in a cannula is South Korea.
The country of origin marking of the suture in a cannula is South Korea.
Please note that 19 C.F.R. 177.9(b)(1) provides that "[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based."
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 transaction.
Yuliya A. Gulis, Chief
Food, Textiles, and Marking Branch