CLA-2 R:C:S 559136 BLS
Robert S. Kirschenbaum, Esq.
Alpha Theurapeutic Corporation
5555 Valley Boulevard
Los Angeles, California 90032
RE: Country of origin marking of blood products for the treatment of hemophilia; syringe; substantial transformation; National Juice; HRL 733248
Dear Mr. Kirschenbaum:
This is in reference to your letters (two) dated March 2, 1995, concerning the country of origin marking requirements of an "Anti-Hemophilic Factor" and "Coagulation Factor IX" sent to Germany for introduction into a syringe. Since these products have similar therapeutic effects, and are identically processed abroad, hereinafter we will refer to both products in the singular, i.e., "AHF."
FACTS:
Alpha Therapeutic Corporation ("ATC") produces AHF, which is therapeutically indicated for the prevention and control of bleeding, primarily for patients with a clotting deficiency due to hemophilia. The administration of AHF temporarily increases the level of this clotting factor in the blood, thereby greatly reducing the risk of uncontrolled hemorrhage.
A German phamaceutical firm, Vetter Pharma-Fertigung GmbH ("Vetter"), has patented a dual chamber-syringe which is useful in the administration of AHF by the patient. ATC intends to ship the products in frozen liquid form to Vetter's processing facility in Germany. The AHF will then be thawed and filled into one chamber of the Vetter syringe, then freeze-dried and placed in one chamber. The other chamber is filled with sterile water which serves as a diluent. The filled syringes are then packaged (in a blister pack) and shipped back to ATC in the U.S. Either Vetter or ATC will be responsible for the final packaging and labeling operation. In either case, ATC will market and distribute the finished product, under its registered trademark.
You propose to mark each individual carton (i.e., the unit received by the consuming patient) to indicate the following: "Made by Alpha Therapeutic Corporation in the United States", and "Filled by Vetter Pharma-Fertigung GmbH in Germany." You also point out that the syringes will be discarded by the patient/consumer once the product is expended.
- 2 -
ISSUE:
What are the country of origin marking requirements for the imported product?
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 U. S. 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 the ultimate purchaser in the U.S. the English name of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines the country of origin as "the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 articles lose their identity and become articles having a new name, character or use. United States v. Gibson-Thomsen Co., 27 CCPA 267 at 270 (1940), National Juice Products v. United States, 10 CIT 48, 628 F. Supp. 978 (CIT 1986).
In National Juice, the court held that manufacturing concentrate imported into the U.S. used to make frozen concentrated orange juice and reconstituted orange juice was not substantially transformed. The court stated that the imported concentrate was the very essence of the retail product and that the addition of water, orange essences and oils to the concentrate, while making it suitable for retail sale, did not change the fundamental character of the product.
In Headquarters Ruling Letter (HRL) 733248 dated August 22, 1990, "Immune Globulin (Human) Fraction II paste", derived from blood plasma, was produced in the U.S. In this form, with the addition of a diluent, the product could and was used for muscular injection in patients. The product was sent to Belgium, where it underwent additional processing including sterile filtering and buffering. The product was then filled into vials and freeze-dried. Both products were known by the same name, and the imported product was used for the same treatment as the exported paste, but was administered intravenously rather than through a muscular injection. Under these facts, we found that the exported paste imparted the fundamental character to the finished product even though the foreign processing was necessary to make the product useable in
an intravenous form . Accordingly, we held that the exported paste was not substantially transformed in Belguim, and that the country of origin of the imported product was the U.S.
- 3 -
(See also HRL 729519, where a liquid "flavor base" of U.S.-origin was sent to Canada to be mixed with carbonated water, bottled and returned to the U.S. as a wine cooler. In that case, Customs found that the processing performed in Canada did not substantially transform the liquid flavor base into a product of Canada. This opinion was based on the determination that the
flavor base imparted the fundamental character of the wine cooler although the Canadian processing was necessary to make the product saleable and changed the character of the final product to a certain degree.)
Similarly, we find that the processing of the AHF in Germany, which consists of thawing the product, pouring it into one chamber of the syringe, and freeze-drying, does not result in a substantial transformation. The fundamental character of the AHF remains unchanged by this processing, which serves to make the product saleable, since it can now be administered with the sterile water by use of the patented dual chamber syringe. Further, the name of the product in its finished condition is also unchanged after its return from Germany. Therefore, we find that the country of origin of the returned AHF is the U.S.
Since the imported AHF is considered a product of the U.S., it is not subject to the marking requirements of 19 U.S.C. 1304. However, the syringe is required to be marked to indicate its country of origin unless it is a disposable container. Section 134.24(a), Customs Regulations (19 CFR 134.24(a)), defines disposable containers as "the usual ordinary types of containers or holders or containers, including cans, bottles, paper or polyethelyne bags, paperboard boxes, and similar containers or holders which are ordinarily discarded after the contents have been consumed." We have held that disposable containers include plastic bottles imported filled with U.S. spring water (HRL 731425 dated June 28, 1988); plastic compacts imported empty to be filled with U.S. cosmetics; and videocassette containers imported empty to be filled with videcassettes in the U.S. (HRL 732575 dated July 12, 1990). These containers are used to store the product during its life and are ordinarily discarded thereafter.
These cases are in point. Accordingly, we find that the subject syringes which are discarded after the AHF is expended are the "usual ordinary types of containers..." for its contents, and therefore are "disposable containers" within the meaning of 19 CFR 134.24(a).
When disposable containers are imported full and the contents are excepted from marking, the containers are not required to be marked to show the country of their own origin, but ordinarily the containers must be marked to indicate the origin of their contents regardless of the fact that the contents are excepted from the marking requirements. (19 CFR 134.24(d)). However, in this case, since the contents are a U.S. product, no country of origin marking would be required on the containers.
- 4 -
Since you intend to mark the cartons indicating the U.S.-origin of the imported product, the next issue is whether this reference triggers the requirements of 19 CFR 134.46, which provides that in any case in which the name of a 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 words of similar meaning.
We find that the reference to the fact that the AHF is a product of the U.S. does not trigger the requirements of 19 CFR 134.46, since the "article" referred to in 19 CFR 134.46 is the article itself and not the disposable German syringe. Therefore, the U.S. reference on the carton is not the name of a locality other than the country or locality in which the article was manufactured or produced.
HOLDING:
U.S.-origin blood products, "Anti-Hemophilic Factor" and "Coagulation Factor IX", freeze-dried and placed in a a dual chamber syringe in Germany, do not undergo a substantial transformation . Therefore, as the country of origin of the imported products is the U.S., the country of origin marking requirements under 19 U.S.C. 1304 do not apply to the imported product. The syringe in which the imported products are housed is a "disposable container" as defined in 19 CFR 134.24(d), and therefore does not have to be marked with its own country of origin. Furthermore, since the contents of the container are a U.S. product, the container need not be marked with the origin of its contents.
The Federal Trade Commission ("FTC") has jurisdiction concerning the use of the phrase "Made in the U.S.A.", or similar words denoting U.S. origin. Consequently, any inquiries regarding the use of such phrases reflecting U.S. origin should be directed to the FTC, at the following address: Federal Trade Commission, Division of Enforcement, 6th & Pennsylvania Avenue, N.W., Washington, D.C. 20508.
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 Customs officer handling the transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division