MAR-2 OT:RR:NC:1:140
Mr. Peter W. Klestadt
GDLSK
599 Lexington Avenue, FL 36
New York, NY 10022-7648
RE: THE COUNTRY OF ORIGIN MARKING OF DIMETHICONE LOTION (DERMASIL®) FROM CHINA
Dear Mr. Klestadt:
This is in response to your letter dated October 16, 2018, requesting a ruling on whether the proposed marking “Made in Singapore” is an acceptable country of origin marking for imported Dimethicone Lotion (Dermasil®).
In your letter dated October 16, 2018, you requested a ruling regarding Country of Origin on behalf of your client, Fantasia Accessories Ltd (“Fantasia”).
You state that Fantasia is an importer of fragrance and over-the-counter (OTC) healthcare and beauty products. Under the proposed transaction, Fantasia will purchase Dimethicone Lotion from a vendor located in China. Dimethicone Lotion is an OTC skincare lotion for dry skin. You state that dimethicone is the only active ingredient in Dimethicone Lotion. You indicate that it is sold under the brand name Dermasil®. The product is indicated to be used for skincare. It is said to be a “powerful dry skin treatment and skin protectant.” In addition to the Dermasil® “original lotion,” which is the subject of this request, Fantasia will import three other variations of this product, namely, “Dry Skin,” “Sensitive” and “Advanced.”
Reference material that you provided shows that this lotion contains “four systems to control and provide long-lasting relief from severe dry skin: Occlusives to block moisture loss from the skin's surface Humectant to bind water in the skin's outermost layers Skin Lipids to enhance the skin's natural ability to retain moisture EFA's an important component of the skin's moisture barrier.” (Emphasis in original)
Labeling provided states: “Indications: Suitable for severe dry skin, and control of symptoms such as chapping, cracking, flaking, roughness, redness, soreness, and the itching associated with dry skin.”
This labeling, description, and marketing material starkly contradicts the claim that “dimethicone” is the only active ingredient.
You indicate that Fantasia’s vendor will purchase the active ingredient, dimethicone, which will be manufactured entirely in Singapore. The vendor will arrange for the shipping of the dimethicone from Singapore to China. In China, the vendor will process the dimethicone by diluting it with water and blending it with the other ingredients in a fixed percentage to make the final product. The finished product is then packaged for retail sale. You claim that this processing constitutes a simple mixing operation which would not confer origin. You suggest that origin should be based solely on this “active ingredient”. We disagree.
In addition to dimethicone, the lotion consists of water, which accounts for approximately 77% of the overall product (by weight), and various inactive ingredients, i.e., emulsifiers, preservatives, thickeners, additional moisturizing agents and fragrance.
The active ingredient in the skin care cream is called Polydimethylsiloxane (PDMS). It is also called dimethylpolysiloxane or dimethicone, and is one of several types of silicone oil (polymerized siloxane). Its applications range from contact lenses and medical devices to elastomers; it is also present in shampoos, food, caulking, lubricants and heat-resistant tiles.
The dimethicone is a chemical product. It only becomes a skin care product when mixed and formulated with the other listed ingredients. The label provided indicates the following ingredients which are formulated and mixed into the product in China.
Inactive Ingredients Water (Aqua), Petrolatum, Mineral Oil (Parraffinum Liquidum),Glycerin, Stearic Acid, Glycol Stearate, Glyceryl Stearate, Triethanolamine, PEG-40 Stearate, Cetyl Alcohol, DMDM Hydantoin, Magnesium Aluminum Silicate, Methylparaben, Helianthus Annuus (Sunflower) Seed Oil, Cetyl Acetate, Acetylated Lanolin Alcohol, Carbomer, Propylparaben, Disodium EDTA, Geranium Maculatum Oil, Lecithin, Borago Officinalis Seed Oil, Cholesterol, Ascorbyl Palmitate, Prunus Amygdalus Dulcis (Sweet Almond) Oil, Ethylene Brassylate, Santalum Album (Sandalwood) Oil, Rosa Damascena Extract, Vanilla Planifolia Fruit Extract
We note that several of the listed ingredients provide benefit in the products purpose (skincare). Various oils, extracts lanolin all provide beneficial skin care properties.
In HQ H289715, which you cite as supporting your claim that no processing conferring origin occurs in China, it is stated that: “Further, the processing performed in the United States does not affect the medicinal use of the API. Based on the information presented, the API does not undergo a change in name, character or use.”
However we find the manufacturing process, use, and the additives in the instant product are not similar to the product or manufacturing process in that ruling. No ingredient added in that instance provided additional benefit to the main use (anti-dementia). We find additional ingredients in the manufacturing of the instant product and the totality of processing in China create a new and different product and determine origin for tariff purposes.
The dimethicone base imported into China is a chemical substance which is used in a wide variety of products. Additives listed in the ingredients which are claimed to be inert, add distinctly to the skin care benefit of the overall product. For example you cite various “inactive” ingredients, i.e., emulsifiers, preservatives, thickeners, oils, additional moisturizing agents and fragrance. (Italic emphasis added).
The added moisturizing agents, and other purposeful additives would (in our opinion) add value to the product and provide additional benefit to the skin.
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 U.S. the English name of the country of origin of the article.
The “country of origin” is defined in 19 CFR 134.1(b) 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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.”
For tariff purposes, the courts have held that 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. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
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 U.S. the English name of the country of origin of the article.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
A marked sample was not received with this request, other than the image in your documentation of the prior label, which you now claim is in error. In your request letter you proposed that the retail container be marked as a “Product of Singapore.” We disagree. We note that the images of the product provided show the marking of past products indicate “Made in China”. We believe that label to be correct.
We find that the Country of Origin of the Dimethicone Lotion (Dermasil®) will be China for purposes of 19 U.S.C. 1304 and 19 CFR Part 134 and is an acceptable country of origin marking for the imported Dimethicone lotion (Dermasil®)as indicated above.
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.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Paul Hodgkiss at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division