CLA-2-90:OT:RR:NC:N3:135
Mr. Lawrence R. Pilon
Rock Trade Law LLC
134 North LaSalle Street Suite 1800
Chicago, IL 60602
RE: The country of origin of electrocardiogram (ECG) electrodes
Dear Mr. Pilon:
In your letter dated March 26, 2021, on behalf of Medline Industries, Inc., you requested a ruling on the country of origin of five models of ECG cutaneous electrodes.
The five models of the ECG cutaneous electrodes are identified as: MDSM611050 (MedGel Pediatric Foam Electrode), MDSM611505 (MedGel General Monitoring Foam Electrodes), MDSM611550 (MedGel General Monitoring Foam Electrodes), MDSM611905 (MedGel Stress/Diaphoretic Foam Electrode), and MDSM611950 (MedGel Stress/Diaphoretic Foam Electrode). They differ slightly in size and shape. The ECG cutaneous electrodes are composed of electrically conductive hydrogel (electrogel), a PE foam, a top label (gives strength to the electrode and displays Medline logos), a top button (attachment point for a wire lead), a bottom button, and a PET plastic backing sheet (the electrode is removed from the backing sheet to expose the hydrogel in use).
All the materials are produced in China except for the electrogel, which is made in France. You state that the electrogel material is shipped to China in bulk for use in the manufacture of these electrodes. When shipped to China, the electrogel is already a finished product and no further manufacturing processes are performed on it in China other than layering it onto the electrode sheets as described below. In China the following manufacturing steps are performed by machine:
The top (printed label) layer (in sheets) is laminated to thin sheets of PE foam.
The top and bottom button pieces are then affixed to the PE foam/label sheets through holes punched at spacings on the sheet to properly position the buttons when the finished sheets are later stamped to cut the individual electrodes.
The electrically conductive hydrogel material is reconstituted to the required consistency and layered onto the PE foam sheets.
The hydrogel-laminated sheet is then punched (die stamped) to cut out the individual finished electrodes to the desired shape (circular, rectangular, or teardrop) particular to the model being made.
The unused cut-away portion of the hydrogel laminate sheet is removed, leaving a sheet of finished cut individual electrodes.
The finished individual electrodes are rolled onto PET plastic backing sheets, then packaged in groups of 1, 5, 50, 100, 1000, or 6,000 electrodes, depending on the model.
You explain that the ECG cutaneous electrodes are used by medical professionals in conjunction with an electrocardiogram machine to sense and record electrical signals from the patient’s heart for monitoring and diagnostic purposes. On these particular models, at the time of use a separate conductive wire lead is attached to the button in the center of the top (outer) surface of each electrode and then multiple electrodes are adhered to the patient’s skin at various points on the body. Faint electrical signals generated by the patient’s heart activity are picked up by the hydrogel (electrogel) layer of the electrode and transmitted through the button on the electrode to the conductive wire lead and on to the ECG machine for analysis and/or display.
The "country of origin" is defined in in section 134.1(b), Customs and Border Protection (CBP) Regulations (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.”
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). 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 issue of whether a substantial transformation occurs is determined on a case-by-case basis. See HQ 561353, dated September 19, 2002.
In this case, the assembly process in China consists of the mechanized lamination of the printed label, foam backing, hydrogel layering, the mechanical stamping to attach the electrode buttons, followed by the die cutting of the sheets into individual electrodes and the rolling of the finished electrodes onto the PET backing sheets. The assembly operations are relatively simple and minor, involving highly repetitive low-skill functions. In HQ ruling H300743, dated January 29, 2019, CBP held that a substantial transformation did not occur when components of a self-adhesive cutaneous electrode used for electrocardiogram and electromyogram (EMG) monitoring applications underwent “relatively simple and minor [assembly] operations involving highly repetitive, low-skill functions” in China. CBP noted that hydrogel “provide[d] the means whereby electrical activity in the body is recorded by the input circuits of an EEG/EMG machine, or electrical impulses are generated when used with stimulating equipment” and that “[t]he hydrogel’s adhesive properties are essential to allowing the product to function as a self-adhesive cutaneous electrode.” Accordingly, CBP held that the hydrogel imparted the essential character to the self-adhesive cutaneous electrode. Likewise, the hydrogel in this case is not substantially transformed in China by the layering process and imparts the essential character of the ECG cutaneous electrodes. Consequently, we find that the country of origin of the ECG cutaneous electrodes is France for the purposes of marking and the assessment of duties.
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 Fei Chen at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division