CLA-2-56:RR:NC:N3:351 H80134
Mr. Michael J. Hertz
Surgical Specialties Corp.
100 Dennis Drive
Reading, PA 19608
RE: Classification and country of origin determination for unsterilized surgical sutures from Mexico, China, and the Dominican Republic; 19 CFR 102.21(c)(2); 19 CFR 12.130(c); tariff shift
Dear Mr. Hertz:
This is in reply to your letter dated April 11, 2001, requesting a classification and country of origin determination for surgical sutures which will be imported unsterilized into the United States and sterilized subsequent to importation.
FACTS:
The subject merchandise consists of the following components and packaging materials
which will be exported from the United States to three assembly operations, one each in
Mexico, China, and the Dominican Republic:
surgical needles (channeled);
surgical needles (drilled end);
black braided silk suture;
black mono nylon suture;
catgut suture (plain and chromatic);
polypropylene suture;
wrapping cards composed of various packaging materials.
From your letter, we assume the following: the silk yarn is extruded in China; the nylon yarn is extruded in the United Kingdom; the catgut yarn is produced in Brazil; and the polypropylene yarn is extruded in the United States.
We assume that by “sutures,” you mean the yarns used to make the completed items, as described below. We shall use the term “completed sutures” to mean the assembled yarn-and-needle combination.
The manufacturing operations for the completed sutures are stated as follows: one piece of suture (that is, yarn or catgut) is attached to a needle and the completed item is enclosed in a wrapping card.
ISSUE:
What are the classification and country of origin of the subject merchandise?
CLASSIFICATION:
You propose classification in subheading 9018.90, Harmonized Tariff Schedule of the United States (HTS) which provides for instruments and appliances used in medical, surgical, dental or veterinary sciences. However, Customs Headquarters has previously ruled that lengths of surgical suture, whether or not sterile, inserted into needles, are classified depending on to the suture material, not in subheading 9018.
The applicable subheading for the completed sutures of polypropylene or nylon will be 5609.00.3000, HTS, which provides for articles of yarn . . . not elsewhere specified or included: of man-made fibers. The general rate of duty will be 5.8 percent ad valorem.
The applicable subheading for the completed sutures of silk will be 5609.00.4000, HTS, which provides for articles of yarn . . . not elsewhere specified or included: other. The general rate of duty will be 5.1 percent ad valorem.
The applicable subheading for the completed sutures of catgut will be 4206.10.3000, HTS, which provides for articles of gut (other than silkworm gut),…: Of catgut: If imported for use in the manufacture of sterile surgical sutures. The rate of general rate of duty will be 3.5 percent ad valorem.
There are currently no quota restrictions or visa requirements for any of these products.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.
Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:"
Paragraph (e) in pertinent part states that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section":
HTSUS Tariff shift and/or other requirements
5609 (1) If of continuous filaments, including strips, the country of origin of a good classifiable under heading 5609 is the country, territory, or insular possession in which those filaments, including strips, were extruded.
(2) If of staple fibers, the country of origin of a good classifiable under heading 5609 is the country, territory, or insular possession in which those fibers were spun into yarns.
As the yarns are stated to be either extruded or spun in a single country, that is, the United States (polypropylene), China (silk), or the United Kingdom (nylon), as per the terms of the tariff shift requirement, country of origin of the completed sutures is conferred in the respective country in which the yarn is produced.
However, there is an exception for textile products from the United States that are sent abroad for processing. Section 12.130(c), Customs Regulations, provides that any product of the United States that is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article.
Section 12.130, which remains in effect, was originally intended to be used to determine the country of origin of textiles and textile products for quota/visa requirements. In T.D. 90-17, issued February 23, 1990, Customs announced a change in practice and position. This change resulted in Customs using Section 12.130 for quota, duty, and marking purposes when making country of origin determinations for textile goods. In accordance with T.D. 90-17 and Section 12.130(c), the country of origin of the completed sutures made from U.S.-extruded polypropylene, for quota, marking, and duty purposes, is the country in which the final assembly process occurs, Mexico, China, or the Dominican Republic.
However, this position has recently been modified. On July 11, 2000, Customs published T.D. 00-44 in the Federal Register (65 FR 42634), stating that effective October 10, 2000, Customs will no longer apply 19 CFR 12.130(c) for purposes of country of origin marking. Therefore, in accordance with T.D. 00-44, Section 12.130(c) and Section 102.21(c)(4), the country of origin of the completed polypropylene sutures will be the United States. Section 12.130(c) remains in effect for duty and quota purposes and the completed polypropylene sutures are subject to the general rate of duty noted previously.
As the origin of the completed polypropylene sutures for the purposes of marking has been determined to be the United States, it is not required to be marked as a foreign article for purposes of 19 U.S.C. 1304 as previously required. However, separate Federal Trade Commission marking requirements exist regarding country of origin, fiber content, and other information that must appear on many textile items. For more information on the applicability of the requirements under the Textile Fiber Products Identification Act (TFPIA), you should contact the Federal Trade Commission, Textile Program, Division of Enforcement, Bureau of Consumer Protection, 600 Pennsylvania Avenue, N.W., Washington, D.C., 20580.
Regarding the completed sutures of catgut (plain and chromatic), Section 134.1(b), Customs Regulations (19 C.F.R. §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.”
The attaching of the catgut to the needle constitutes a substantial transformation of the catgut into a new and different article, that is the completed suture, having a new name, character and use. The country of origin of the completed sutures of catgut will be Mexico, China, or the Dominican Republic, depending on where the completed article is formed.
HOLDING:
The country of origin of the completed sutures of nylon is the United Kingdom. The country of origin of the completed sutures of silk is China. The country of origin of the completed sutures of catgut or polypropylene is Mexico, China, or the Dominican Republic, depending on where the completed suture is formed. However, for marking purposes, the country of origin of the completed polypropylene sutures is the United States.
Your letter states that your company “exports components and packaging materials” to the assembly plants. From the information you have sent, we assume that you are the supplier of these raw materials. Please note that the cost or value of the components and packaging materials will represent an assist under Section 402 of the Tariff Act (TA).
The term “assist” is defined as that which is supplied directly or indirectly by the buyer of imported merchandise, free of charge or at reduced cost, for use in connection with the sale of the merchandise for export to the U.S., under 19 U.S.C. 1401a(h)(1)(A). There are four categories of assists, but only the first, encompassing “materials, components, parts and similar items incorporated in the imported merchandise,” is potentially relevant to the instant situation. As an assist, the value of the yarns must be added to the processing costs before the ad valorem rate of duty is applied, pursuant to Section 402, TA. Additionally, please note that the value of any assist will include transportation costs to the place of production. See Section 152.103(d), Customs Regulations (19 C.F.R. §152.103(d)).
You have asked whether any of the finished sutures is subject to antidumping duties or countervailing duties. A list of AD/CVD proceedings at the Department of Commerce (DOC) and their product coverage can be obtained from the DOC website at: http://ia.ita.doc.gov, or you may write to them at the U.S. Department of Commerce, International Trade Administration, Office of Antidumping Compliance, 14th Street and Constitution Avenue, N.W. Washington, DC 20230. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs.
Your letter also asks if the left-over components may be returned to the United States duty-free as US goods returned, classifiable in Chapter 98, HTS, 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. Only those items that are of U.S. origin may qualify for return under subheading 9801, provided that the documentary requirements of 19 C.F.R. §10.1 are satisfied.
Lastly, you ask if the packaging materials need to be invoiced. Because we are not exactly clear on the meaning of your question, we refer you to Section 141.86 of the Customs regulations (19 C.F.R. 141.86) which discusses invoicing requirements.
The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.
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 Mitchel Bayer at 212-637-7086.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division