CLA-2-30:OT:RR:NC:N2:238
Mr. Herbert J. Lynch
Sullivan & Lynch, P.C.
800 Turnpike Street, Suite 300
North Andover, MA 01845
RE: The tariff classification, country of origin and country of origin marking of the AUGMENT® Bone Graft Kit from the United Kingdom and the applicability of subheading 9801.00.10, HTSUS
Dear Mr. Lynch:
In your letter dated June 22, 2016, on behalf of BioMimetic Therapeutics LLC, you requested a tariff classification, country of origin, country of origin marking ruling as well as the applicability of subheading 9801.00.10, HTSUS, regarding American Goods Returned. Although you submitted a sample to this office, we did not receive it.
The AUGMENT® Bone Graft Kit is an alternative to autograft in surgical procedures of the ankle and/or hindfoot or joint anthropathy in patients with the need for supplemental graft material. The AUGMENT® Bone Graft Kit consists of two components: medical grade beta-tricalcium phosphate (B-TCP) in granular form and platelet derived growth factor BB (rhPDGF-BB) septically filled into vials in liquid form. At the point of use, the two components are combined, mixed and subsequently applied to the surgical site. The B-CPT matrix component provides a porous, osteoconductive scaffold to support cell attachment and delivery of the biologic rhPDGF-BB component. The principal actions of the rhPDGF-BB are chemotaxis (cell attraction and migration), mitogenesis (stimulation of cell division) and angiogenesis production of new blood cells. The rhPDGF-BB ensures that an adequate number of cell types will be available to promote all phases of the bone healing process.
In your letter, you stated that the AUGMENT® Bone Graft Kit will be packaged and imported from the United Kingdom. The rhPDGF-BB component is of United States origin and will be delivered to the packager in the United Kingdom in vials ready for packaging. In a follow-up email to this office, you stated that the rhPDGF-BB in vials is received by the United Kingdom packager sterile and ready for its intended use. In the United Kingdom, the US origin rhPDGF-BB vials will be placed and packed into plastic trays, and the EtO sterilization will be performed on the plastic vial trays and not the rhPDGF-BB vials. The sterilization process involves the introduction of ethylene oxide (EtO) gas onto the vial tray which will result in the destruction of any micro-organisms that may be present on or in the vial tray.
The medical grade beta-calcium phosphate (B-TCP) component is manufactured in the Netherlands and shipped in bulk granular form to the packager in the United Kingdom. The B-TCP is packed in specific portions into plastic cups that are sealed with Tyvek lids. The plastic cups are placed into plastic cup trays. Then the plastic cup tray is subjected to gamma sterilization so as to destroy any micro-organisms that might be present on or in the cup tray. Finally, the B-TCP cups in plastic cup trays will subsequently be packaged with the corresponding vial size of the rhPDGF-BB into the AUGMENT® Bone Graft Kit for export to the United States.
The applicable subheading for the AUGMENT® Bone Graft Kit will be 3004.90.9190, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Medicaments … consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses … or in forms or packings for retail sale: Other: Other: Other: Other." The rate of duty will be free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current.
This merchandise may be subject to the Federal Food, Drug, and Cosmetic Act and/or The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (The Bioterrorism Act), which are administered by the U.S. Food and Drug Administration (FDA). Information on the Federal Food, Drug, and Cosmetic Act, as well as The Bioterrorism Act, can be obtained by calling the FDA at 1-888-463-6332, or by visiting their website at www.fda.gov.
You have also inquired about the country of origin of the rhPDGF-BB and B-TCP components, the country of origin marking for the AUGMENT® Bone-Graft Kit and the applicability of the duty free treatment of the rhPDGF-BB under subheading 9801.00.1028, HTSUS, as American Goods Returned.
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 United States the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country or 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 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 this part;….
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and National Juice Products Association v. United States, 628 F. Supp. 978 (Ct. Int’l Trade 1986).
Based upon the information provided, we find the packaging operation performed in the United Kingdom does not result in a substantial transformation. Therefore, the country of origin of the B-TCP remains the Netherlands and the country of origin of the rhPDGF-BB remains the United States.
Regarding the country of origin marking requirements, you have provided pictures of the labels that will be used to mark the AUGMENT® Bone Graft Kit with the country of origin. These labels indicate that the rhPDGF-BB is made in the USA and that the B-TCP is made in the Netherlands, and that they are packaged together in the United Kingdom.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser.
An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. Accordingly, if Customs is satisfied that the article will remain in its container until it reaches the ultimate purchaser and if the ultimate purchaser can tell the country of origin of the article by viewing the container in which it is packaged, the individual articles would be excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d).
Section 134.46, Customs Regulations (19 CFR 134.46), deals with cases in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or locality in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appears on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin. In such a case, there shall appear, legibly and permanently, in close proximity to such words, letters, or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning.
In order to satisfy the close proximity requirement, the country of origin marking must generally appear on the same side(s) or surface(s) in which the name or locality other than the actual country of origin appears.
Based upon the pictures of the labels provided, we find that the countries of origin are shown in close proximity and in approximately the same size lettering as the American locale shown on the label. These labels, provided they are permanent and placed so that the country of origin is shown conspicuously on the product, are sufficient to meet the country of origin marking regulations.
Additionally, you request confirmation that the rhPDGF-BB component would be eligible for classification in Subheading 9801.00.10, HTSUS, which provides for the free entry of products of the U.S. that are exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. In United States v. John V. Carr & Sons. Inc., 69 Cust. Ct. 78, C.D. 4377, 347 F.Supp. 1390 (1972, 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974), the court stated that, absent some alteration or change in the item itself, the mere repackaging of the item, even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified in subheading 9801.00.10 HTSUS. Thus, the U.S. origin rhPDGF-BB component in vials, which is placed in vial trays and packaged for retail sale in the United Kingdom, and returned to the United States, is not considered to have been advanced in value or improved in condition for the purposes of subheading 9801.00.10, HTSUS. As a result, the rhPDGF-BB component, a product of the United States, may be eligible for entry as American Goods Returned.
If the documentary requirements of 19 C.F.R. §10.1 are satisfied, the applicable subheading for the rhPDGF-BB component will be 9801.00.1028, HTSUS, which provides for “Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. Other: Articles provided for in chapter 30.” Products classified in subheading 9801.00.1028 are free of duty.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Judy Lee at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division