OT:RR:CTF:VS H310136 EGJ
Peter Quinter
Gray Robinson
333 S.E. 2nd Ave., Suite 3200
Miami, FL 33131
RE: Disposable Blood Oxygen Sensors with Cables; USMCA
Dear Mr. Quinter:
This is in response to your correspondence, dated April 1, 2020, in which you request a ruling concerning the eligibility of a disposable blood oxygen sensor and cable for duty-free treatment under the United States-Mexico-Canada Agreement.
FACTS:
The merchandise consists of disposable blood oxygen sensors with attached cables. Constructed using a small adhesive bandage, the healthcare provider wraps the sensor strip around the patient’s finger to measure the patient’s blood oxygen level. The sensor sends the blood oxygen reading through the cable to the healthcare provider’s pulse oximeter device; the blood oxygen level displays on the device’s screen. After each reading, the provider disposes of the sensor and cable, which are permanently joined through soldering. The sensors with cables come in four different sizes, including sizes for both infants and adults.
All of the products’ components are sourced from China, South Korea, and the United States. They are shipped to a facility in Mexico for assembly into the finished blood oxygen sensors with cables. Three of the four major parts are from China and South Korea: the cable assembly, the sensor light-emitting diode (“LED”), and the sensor detector. The fourth major part, the sensor tape, is from the United States. In Mexico, the four major parts and the minor components such as white adhesive backing paper, packing materials, glue, etc. are combined to form the finished products. Then they are packaged and shipped to the United States.
You have proposed the following tariff classifications under the Harmonized Tariff Schedule of the United States (“HTSUS”) for the blood oxygen sensors with cables and three major components sourced from China and South Korea:
the blood oxygen sensors with cables under subheading 9018.19, HTSUS, which provides, in pertinent part, for “Electro-diagnostic apparatus (including apparatus for functional exploratory examination or for checking physiological parameters);
the cable assemblies under subheading 8544.42, HTSUS, which provides, in pertinent part, for “Insulated wire … fitted with connectors”; and
the sensor LEDs and the sensor detectors under subheading 8541.40, HTSUS, which provides, in pertinent part, for “light-emitting diode[s] (LED[s])”.
We note that all of the other components either originate in the United States, or make up less than 10% of the total cost of the finished sensors with cables.
ISSUE:
Whether the blood oxygen sensors with cables are eligible for duty-free treatment under the United States-Mexico-Canada Agreement.
LAW AND ANALYSIS:
The United States-Mexico-Canada Agreement (“USMCA”) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (GN) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a "good originating in the territory of a USMCA country" only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or
…
Since the blood oxygen sensors with cables contain non-originating materials, they are not considered goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and GN 11(b)(ii). We must next determine whether the sensors with cables qualify under GN 11(b)(iii). It is undisputed that the finished sensors with cables are classified under subheading 9018.19, HTSUS. See New York Ruling Letter (NY) 881670, dated January 19, 1993, and NY N144735, dated February 11, 2011 (blood oxygen sensors classified in subheading 9018.19, HTSUS).
The applicable rule of origin for blood oxygen sensors with cables classified under subheading 9018.19, HTSUS, is in GN 11(o)/90.39, HTSUS, which provides “[a] change to subheadings 9018.19 from any other heading. The three major non-originating components, which are the cable assemblies classified under subheading 8544.42, and the sensors and sensor detectors classified under subheading 8541.40, HTSUS, are classified in headings other than heading 9018, HTSUS. Therefore the non-originating materials meet the requisite tariff shift rule.
We do not need to consider the other non-originating materials, as each one of them falls well below the 10 percent de minimis rule. Under GN 11(e), a good is still eligible for preferential tariff treatment under the USMCA even if non-originating materials used in the production of the good do not undergo the applicable change in tariff classification as long as those materials do not exceed 10 percent of the total cost of the good. Indeed, the four major components make up 96 percent of the total cost of the finished product. Accordingly, the blood oxygen sensors with cables classified under subheading 9018.19, HTSUS, qualify as USMCA originating goods. As a result of the assembly process in Mexico, we find that the country of origin is Mexico.
HOLDING:
Based on the information provided, the blood oxygen sensors with cables are eligible for preferential tariff treatment under the USMCA.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
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,
Monika R. Brenner, Chief
Valuation and Special Programs Branch