CLA-2 OT:RR:CTF:TCM H016800 KSH
Donald S. Stein, Esq.
Greenberg Traurig, LLP
800 Connecticut Avenue N.W.
Suite 500
Washington, DC 20006
RE: NAFTA country of origin and marking of a MIC Percutaneous Placement Kit Dear Mr. Stein:
This letter is in response to your request of August 2, 2007, on behalf of your client, Avent Inc., in which you requested a binding ruling pertaining to the country of origin and marking of a MIC Pecutaneous Placement Kit (PPK). Your request has been forwarded by the National Commodity Specialist Division in New York to this office for a response.
FACTS:
The merchandise at issue is identified as the “MIC Pecutaneous Placement Kit.” The PPK is a medical device to initially place balloon-retained enteral feeding catheters for gastrostomy feeding. The PPK will be marketed to and used in hospitals and clinics by healthcare professionals. The PPK consists of a stoma measuring device, two syringes, 24fr dilator, a gastroplexy assembly (package containing four devices), scalpel, introducer needle, hemostat, guidewire and catheter. The stoma measuring device, 24fr dilator and catheter are from Mexico. The guidewire is from Ireland. The hemostat is from Pakistan. The syringes, gatroplexy assembly, scalpel and introducer needle are from the United States. The PPK is assembled in Mexico. The individual components of the PPK are not marked. The kit will be placed in a sealed package and sterilized. The sealed kit is then placed in individual shipping boxes.
ISSUES:
Whether the PPK must be marked upon importation into the United States.
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).
Part 134, CBP Regulations (19 C.F.R. 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP 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; however, for a good of a NAFTA country, the NAFTA Marking Rules determine the country of origin.
Section 134.1(j), CBP Regulations (19 C.F.R. 134.1(j)), provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g), CBP Regulations (19 C.F.R. 134.1(g)), defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules, set forth at 19 C.F.R. Part 102.
Section 102.11(a), CBP Regulations (19 C.F.R. 102.11(a)), sets forth the required hierarchy under the NAFTA Marking Rules for determining country of origin for marking purposes. This section states that the country of origin of a good is the country in which:
The good is wholly obtained or produced;
The good is produced exclusively from domestic materials; or
Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in [section] 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Section 102.1(g), CBP Regulations (19 C.F.R. 102.1(g)), defines a good wholly obtained or produced as including “A good produced in that country exclusively from goods referred to in paragraphs (g)(1) through (g)(10) of this section or from their derivatives, at any stage of production.” Because the components of the PPK are manufactured in the United States, Pakistan, Ireland and Mexico, the PPK would not qualify as “a good wholly obtained or produced” in a country. Therefore, the country of origin of the oral care kits may not be determined under section 102.11(a)(1).
The next step under the hierarchy is to consider whether the country of origin may be determined according to section 102.11(a)(2). Under this section, the origin of the good may be based on the origin of the materials used to produce the good, provided the good is produced exclusively from domestic materials. Section 102.1(d), CBP Regulations (19 C.F.R. 102.1(d)), defines domestic material as “a material whose country of origin as determined under these rules is the same country as the country in which the good is produced.”
Because the PPK is not produced exclusively from domestic materials (i.e., Mexican), the country of origin cannot be determined under section 102.11(a)(2). Analysis must continue to 19 C.F.R. 102.11(a)(3) to determine the country of origin of the PPK under the NAFTA Marking Rules.
The catheter, introducer needle and guidewire are classified in subheading 9018.39, HTSUS, which provides for “Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scintigraphic apparatus, other electro-medical apparatus and sight-testing instruments; parts and accessories thereof: Syringes, needles, catheters, cannulae and the like; parts and accessories thereof: Other.” The stoma measuring device, 24fr dilator, gastroplexy devices, scalpel and hemostat are classified in subheading 9018.90, HTSUS, which provides for “… Other instruments and appliances and parts and accessories thereof.” The syringes are classified in subheading 9018.31, HTSUS, which provides for “… Syringes, needles, catheters, cannulae and the like; parts and accessories thereof: Syringes, with or without needles; parts and accessories thereof.”
Pursuant to 19 C.F.R. 102.11(a)(3), the country of origin of a good is the country in which “each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in §102.20 and satisfies any other applicable requirements of that section.” Section 102.1(e), CBP Regulations (19 C.F.R. 102.1(e)) defines “Foreign material” as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” At the time the PPK is exported from Mexico, it is classified in 9018.90.8000. See NY N012151. The applicable rule under 19 C.F.R. 102.20(q), CBP Regulations (19 C.F.R. 102.20(q)), states, in relevant part:
9018.90 A change to subheading 9018.90 from any other subheading, except from subheading 9001.90 or synthetic rubber classified in heading 4002 when resulting from a simple assembly; ….
19 C.F.R. 102.20 further states in relevant part, “Where a rule under this section permits a change to a subheading from another subheading of the same heading, the rule shall be satisfied only if the change is from a subheading of the same level specified in the rule. The introducer needle and guidewire are classified in subheading 9018.39, HTSUS. The hemostat, scalpel and gastroplexy assembly are classified in subheading 9018.90, HTSUS. The syringes are classified in heading 9018.31, HTSUS. Thus, in the case before us, only the guidewire, syringes and introducer needle will undergo the required tariff shift. Thus, as each foreign component does not undergo an applicable change in tariff classification within the requirements of section 102.20, the country of origin of the good may not be determined in accordance with this provision. Moreover, 19 C.F.R. 102.17 provides in relevant part:
A foreign material shall not be considered to have undergone an applicable change in tariff classification specified in [section] 102.20 or [section] 102.21 or to have met any other applicable requirements of those sections merely by reason of one or more of the following:
* * * *
(c) Simple packing, repacking or retail packaging without more than minor processing;
* * * *
Because the country of origin cannot be determined under 19 C.F.R. 102.11(a) (incorporating section 102.20), the next step is section 102.11(b), CBP Regulations (19 C.F.R. 102.11(b)), which states, in part:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country origin cannot be determined under paragraph (a), of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good[.]”
As the various items contained in the PPK are classified in different subheadings of 9018, HTSUS, NY N012151 classified the PPK as a set under GRI 3. Therefore, as the PPK was classified as a set pursuant to GRI 3, section 102.11(b) does not apply.
Under 19 C.F.R. 102.11(c), the country of origin is the country or countries of origin of all materials that merit equal consideration for determining the essential character of the good. All of the materials of the set, foreign and domestic, which merit equal consideration, must be considered.
De minimis goods are discussed in 19 C.F.R. 102.13(a) which states:
(a) Except as otherwise provided in paragraphs (b) and (c) of this section, foreign materials that do not undergo the applicable change in tariff classification set out in [section] 102.20 or satisfy the other applicable requirements of that section when incorporated into a good shall be disregarded in determining the country of origin of the good if the value of those materials is no more than 7 percent of the value of the good or 10 percent of the value of a good of Chapter 22, Harmonized System.
Pursuant to 19 C.F.R. 102.13(a), the syringes, scalpel, introducer needle and hemostat may not be considered for the purposes of section 102.20 as each is valued at 7% or less of the value of the good. For the purposes of section 102.11(c), they remain de minimis in relation to the other components in terms of value. The remaining components which merit equal consideration are the stoma measuring device, 24fr dilator, gastroplexy assembly, guidewire and catheter. As such, the countries of origin for marking purposes are the United States, Ireland and Mexico.
You request confirmation that it would be appropriate for the port director to exempt the PPK from being marked with the country of origin. You suggest that the PPK need not be marked with its country of origin as the ultimate purchaser of the kit will receive the kit in its shipping case.
There exist certain exceptions to the marking requirements in the marking
statute. One of those exceptions can be found in section 1304(a)(3)(D). Under
section 1304(a)(3)(D) to the marking statute, an imported article is not required
to be marked with its country of origin if: The marking of a container of such article will reasonably indicate the origin of such article. 19 U.S.C. § 1304(a)(3)(D). Subpart D to part 134 implements the exceptions in the marking statute.
Section 134.32(d) to subpart D lists the following exception: Articles for which the marking of the containers will reasonably indicate the origin of the articles.
19 C.F.R. § 134.32(d).
CBP has ruled in the past that products that are imported for sale to or for
use by medical facilities need not be individually marked as to their country of
origin but rather could be marked on the packages or on the outside of the
containers in which the products were packed provided the medical facility
receives the products in such properly marked packages or containers. See
generally, HQ 560266 (dated January 17, 1997). In the instant case, if the PPK is sold to or provided for use by medical facilities in properly marked
packages, they may be excepted from the country of origin marking
requirements under section 304 of the Tariff Act of 1930 (19 U.S.C. § 1304
(a)(3)(D) and 19 C.F.R. § 134.32(d)).
You need not list all components and their country of origin. Rather, you may mark the PPK package “Product of USA, Ireland and Mexico,” “Components (or parts) produced in U.S., Ireland and Mexico” or other words of similar meaning as you have requested. We note, however, that inasmuch as the marking requirements of 19 U.S.C. 1304 are applicable only to articles of "foreign origin," the PPK is not required to be marked with a reference to the United States origin upon importation into the United States. Claims of domestic origin is a matter under the jurisdiction of the Federal Trade Commission (FTC). Therefore, should you wish to identify any of the articles as "Made in the USA”, we recommend that you contact that agency at the following address: Federal Trade Commission Division of Enforcement, 600 Pennsylvania Avenue, N.W. Washington, D.C. 20580.
Further, we note the special marking requirements of 19 C.F.R. 134.46. Section 134.46, CBP Regulations (19 C.F.R. 134.46), as revised by T.D. 97-72, dated August 20, 1997, provides:
In any case 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 location 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 appear 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 of the article, 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.
Section 134.46 provides that its special marking requirements are triggered when CBP determines that the non-origin marking may mislead or deceive the ultimate purchaser as to the actual country of origin of the article. CBP has ruled that in order to satisfy the "close proximity" requirement, the country of origin marking must appear on the same sides(s) or surface(s) in which the name of the locality other than the country of origin appears. See HQ 708994, dated April 24, 1978. Therefore, if the PPK or the packaging in which the medical facility receives it contains a reference to a location, such as of a distributor, other than the countries of origin, then the requirements of section 134.46 are applicable.
HOLDING:
Pursuant to section 102.11(c) of the CBP Regulations, the countries of
origin of the PPK are the United States, Ireland and Mexico for country of origin marking purposes. The components and package may be excepted from the country of origin marking requirements under section 304 of the Tariff Act of 1930 (19 U.S.C. § 1304(a)(3)(D) and 19 C.F.R. § 134.32(d)) provided the PPK reaches the hospitals and clinics in properly marked individual shipping boxes. The PPK shipping box must be individually marked. Marking of the shipping container cases is insufficient.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed
without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch