MAR-2-05 CO:R:C:V 734904 RC
Mr. B. J. Kalman
Fine Surgical Instrument Corp.
741 Peninsula Blvd.
Hempstead, NY 11550
RE: Country of Origin Marking of Surgical Instruments;
Substantial Transformation, HQ 732615; 19 CFR 134.46, Mfg. not
acceptable.
Dear Mr. Kalman:
This is in response to your letter of October 6, 1992,
requesting a ruling on the country of origin marking requirements
for foreign-manufactured surgical instruments. Your letter
submitted to the Area Director, New York Seaport was forwarded to
us for reply.
FACTS:
B.J. Kalman of Fine Surgical Equipment Corp. imports sponge
forceps and Rochester Ochsners, clamp-like surgical instruments.
Samples of the forged products and the finished products have
been submitted. In Germany, strip stainless steel is forged.
Then the forged parts are exported to Pakistan for the second
stage. In Pakistan, the raw forged products are milled,
machined, or forged. The parts are assembled, riveted, adjusted,
heat treated, annealed, polished, passivated, stamped or marked,
ultrasonically cleansed, and packaged.
ISSUE:
Whether marking the surgical instruments on one leg (the
clamping portion) "GERMAN STAINLESS" and on the opposite side of
the same leg "Mfg PAKISTAN" would be acceptable.
LAW AND ANALYSIS:
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 for marking
purposes is defined by section 134.1(b), Customs Regulations (19
CFR 134.1(b)), to mean the country of manufacture, production, or
growth. 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" for marking
purposes. An article used in manufacture resulting in a new
article having a different name, character, or use will be
considered substantially transformed.
In determining whether processed forged blanks underwent a
substantial transformation, Customs has looked at the specific
processing operations. In HRL 055703 (September 24, 1979), a
German forging was sent to Malaysia for milling and machining,
including widening the holes for joining matching pieces,
machining small ridges for locking or gripping and machining to
define the edges and surfaces. There, Customs ruled the German
forging was substantially transformed into a surgical instrument
and Malaysia was the country of origin. In HRL 553197 (February
11, 1985), Customs determined that the machining of forged blanks
in the U.S., consisting of deburring, milling, assembly and
riveting constituted a substantial transformation. In that same
ruling, the subsequent rough polishing, hand shaping and curving,
heat treatment and final polishing of the instruments in Pakistan
was not a substantial transformation.
In HQ 732844 (February 12, 1990), Customs ruled that even
though U.S.-made forgings resembled the size and shape of the
finished surgical instruments, they were not yet machined to
their actual dimensions and lacked essential characteristics of
finished products, such as the capacities to grip, close, lock in
place and be adjusted. Without the machining, bending, cutting,
riveting, assembly and polishing operations performed in
Pakistan, the articles could not be used as surgical instruments.
Thus, Customs concluded that for purposes of 19 U.S.C. 1304, the
country of origin of the surgical instruments was Pakistan.
In HQ 732615 (June 6, 1990), Customs found raw forgings
produced in West Germany did not possess the essential
characteristics of surgical instruments until further extensive
processing in Pakistan such as milling, cutting, machining, more
milling, heat treating, polishing, and other significant amounts
of processing. There, Customs found the extensive processing
done in Pakistan, refining crude raw forgings into finished
surgical instruments capable of being used by hospitals,
constituted a substantial transformation. Therefore, for
purposes of 19 U.S.C. 1304, the country of origin of the surgical
instruments is Pakistan.
Under section 134.46, Customs Regulations (19 CFR 134.46),
any case in which ... the name of any foreign country or locality
other than the country or locality in which the article was
manufactured or produced, appear on an imported article or its
container, 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. The
"close proximity" requirement has been interpreted in many
rulings to mean on the same side or surface in which the name of
the locality other than the country of origin appears. See HQ
708994 (April 24, 1978). The purpose of 19 CFR 134.46 is to
prevent the possibility of misleading or deceiving the ultimate
purchaser as to the origin of the imported article.
In HQ 732615, Customs addressed inter alia the specific
wording acceptable as a marking on similar surgical instruments.
The words "German Stainless" on one leg and "Made in Pakistan" on
the other were acceptable as long as the requirements of 19 CFR
134.46 were met. There, the marking satisfied the close
proximity requirement because "Made in Pakistan" on one leg
appeared on the same side as "German Stainless" on the other leg
and both markings could be seen at the same time. Moreover, the
"Pakistan" was preceded by the words "Made in". Finally,
"Pakistan" was legible and in lettering in at least comparable
size to "German Stainless". Thus, the proposed marking satisfied
19 CFR 134.46.
The facts in HQ 732615 are directly on point with the facts
of the instant case. Likewise, we find that the country of
origin of the surgical instruments to be Pakistan. However, with
respect to the proposed marking of the surgical instruments on
one leg "GERMAN STAINLESS" and on the opposite side of the same
leg "Mfg PAKISTAN", the requirements of 19 CFR 134.46 are not
met. Here, the marking does not satisfy the close proximity
requirement because "Mfg PAKISTAN" does not appear on the same
side as "GERMAN STAINLESS" and both markings cannot be seen at
the same time. Secondly, "PAKISTAN" is not preceded by the words
"Product of", "Made in", or words of similar meaning. We are of
the opinion the letters "Mfg" do not form an acceptable
abbreviation constituting "words of similar meaning" under
19 CFR 134.46.
HOLDING:
The German forged blanks processed as described above in
Pakistan undergo a substantial transformation in the latter.
Thus, the country of origin is Pakistan. The proposed method of
marking, "GERMAN STAINLESS" on one leg of the surgical instrument
and "Mfg PAKISTAN" on the opposite side, does not satisfy the
requirements of 19 CFR 134.46. In order to be acceptable the
marking "GERMAN STAINLESS" and "PAKISTAN" must be preceded by the
words "Product of", "Made in", or words of similar meaning.
Additionally, the country references must appear on the same side
or surface of the instruments so both may be viewed at the same
time.
Sincerely,
John Durant, Director
Commercial Rulings Division
cc: Chief, NIS Division, Branch 1
New York Seaport