CLA-2-90:OT:RR:NC:N3:135
Ms. Frances T. Tallant
TE Connectivity - Sensors
1050 Westlakes Drive
Berwyn, PA 19312
RE: The country of origin of a Disposable Optical SpO2 Sensor
Dear Ms. Tallant:
In your letter dated June 25, 2021, you requested a country of origin ruling.
The item identified in your letter is a Disposable Optical SpO2 Sensor (Part No. 10104057-10). It consists of an emitter, a detector, a cable assembly, a few adhesive wrap tapes, and a release liner. The emitter will emit both red and infrared lights alternatively though a human tissue then the detector will receive this light signal and transfer it into a current signal. The cable assembly is used as interconnection between the sensor and customer monitor to supply power and transfer signals. The adhesive wrap tapes with a release liner are used to fix the emitter and detector, enabling them to adhere to the human body, and also provide an EMI and ambient light shielded environment.
The emitter, detector, and cable assembly are products of China. The minor components, such as adhesive tapes, packing materials, etc. are sourced from the United States and Mexico. In Mexico, the emitter and detector are soldered to the cable assembly. The soldered emitter and detector are fixed to adhesive tapes. A preliminary temperature cycling and leakage testing is performed. The tapes are wrapped and protected with a release liner. The finished product undergoes a final functional testing, cosmetic inspection, and packing.
Country of Origin Marking
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 United States 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 United States the English name of the country of origin of the article. Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304.
To provide a more seamless transition to the USMCA (the United States-Mexico-Canada Agreement) for Canadian and Mexican traders, at this time, CBP continues to utilize the marking rules in 19 C.F.R. Part 102, except for 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods of those countries.
Section 102.11 of the regulations sets forth the required hierarchy for determining country of origin for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. Applied in sequential order, the hierarchy establishes that the country of origin of a good is the country in which:
(a)(1) The good is wholly obtained or produced;
(a)(2) The good is produced exclusively from domestic materials; or
(a)(3) 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, and all other applicable requirements of these rules are satisfied.
Here, sections 102.11(a)(1) and 102.11(a)(2) do not apply because the Disposable Optical SpO2 Sensor will neither be wholly obtained or produced nor produced exclusively from “domestic” (Mexico, in this case) materials. Accordingly, each foreign material must meet the applicable change in tariff classification set out in Section 102.20 in order for the product to qualify to be marked as a product of Mexico. “Foreign material” is defined in 19 C.F.R. § 102.1(e) 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.”
The Disposable Optical SpO2 Sensor is classified under subheading 9018.19, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for other “[e]lectro-diagnostic apparatus (including apparatus for functional exploratory examination or for checking physiological parameters); parts and accessories thereof.” See Headquarters Ruling Letter (HQ) H310136, dated September 30, 2020. The tariff shift requirement in 19 C.F.R § 102.20 for a good of subheading 9018.19, HTSUS, requires “[a] change to subheading 9018.19 from any other subheading, except to patient monitoring systems from printed circuit assemblies when resulting from a simple assembly.” In this case, all the foreign materials are classified in a subheading other than 9018.19; therefore, each foreign material meets the requisite tariff shift rule. Accordingly, we find that the country of origin of the imported Disposable Optical SpO2 Sensor for marking purposes will be Mexico.
Country of Origin for the Purposes of Section 301
When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable.
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).
In reaching its country of origin determinations, the Court of International Trade has examined the essential character of an article to determine whether its identity has been substantially transformed through assembly or processing. For example, in Uniroyal, Inc. v. United States, 3 CIT 220, 225, 542 F. Supp. 1026, 1030 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983), the court held that imported shoe uppers added to an outer sole in the United States were the “very essence of the finished shoe” and thus the character of the product remained unchanged and did not undergo a substantial transformation. See also National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Similarly, in National Juice Products Association v. United States, 10 CIT 48, 61, 628 F. Supp. 978, 991 (1986), the court held that imported orange juice concentrate “imparts the essential character” to the completed orange juice and thus was not substantially transformed into a product of the United States.
For products used in medical-related applications, we have held that no substantial transformation occurs when the critical components which impart the essential character of the product subsequently undergo simple assembly and processing. See HQ H300744, dated February 20, 2019. In this case, assembling the emitter, detector, cable assembly, a few adhesive wrap tapes, and release liner to form the finished product by means of soldering, fixing, and wrapping in Mexico does not constitute a complex and meaningful operation, and therefore, does not result in a substantial transformation. We find that the essence of the Disposable Optical SpO2 Sensor is the emitter and detector and the name, character, and use of them remains unchanged after the process occurs in Mexico. Hence, the country of origin of the Disposable Optical SpO2 Sensor for purposes of Section 301 trade remedies will be China.
This ruling is being issued under the provisions of Part 177 of the CBP Regulations (19 C.F.R. 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