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HQ 554957

March 7, 1990

MAR-2-05 CO:R:C:V 554957 KG

CATEGORY: MARKING

Daniel McClary
16303 Larch Way North
Lynwood, Washington 98037

RE: Country of origin marking of imported ophthalmic sutures

Dear Mr. McClary:

This is in response to your letter of December 7,1987, requesting a country of origin ruling regarding imported ophthalmic sutures. You have already received a ruling letter dated March 8, 1988 (NY 827131), addressing the item 807, Tariff Schedules of the United States issue. We regret the delay in responding to your inquiry.

FACTS:

The imported article consists of two curved needles attached on either end to a 12" piece of black monofilament nylon thread mounted on a shaped piece of styrofoam. You submitted two samples for examination.

The stainless steel wire from which the needle is made is a product of the U.S. The wire is sent to West Germany in spools where it is cut to length, curved, flattened and the tip is cut and sharpened to a 6-point tip in West Germany. The nylon thread is made and dyed in the U.S. and sent to West Germany in spools where it is cut to length and attached to the needles. The completed suture is then mounted on styrofoam in West Germany. The styrofoam will be of either U.S. or West German origin.

The mounted sutures are then shipped to the U.S. in bulk where they are sterilized and repackaged. Each suture is individually packaged in a sealed sterile packaging. A dozen sutures in individual packages are then inserted into an unsealed paper sleeved tray. You state that the sutures are sold only in lots of a dozen in a sleeved tray. You propose to mark the sleeve tray with the phrase "Needles made in W. Germany-Sutures made in U.S.A." below the U.S. address and phone number of the company selling the product.

ISSUE:

Whether marking the imported ophthalmic sutures, as described above, satisfies section 304 of the Tariff Act of 1930, as amended.

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. The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, 12 CIT (CIT 1988), that: "In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297 at 302, C.A.D. 104 (1940), where the court stated that: "Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that 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."

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)), states that the country of origin means 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 Part 134.

A substantial transformation occurs when articles lose their identity and become new articles having a new name, character or use. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270 (1940), National Juice Products Association v. United States, 10 CIT 48, 628 F.Supp. 978 (CIT 1986), Koru North America v. United States, 12 CIT ___, 701 F.Supp. 229 (CIT 1988). In The Torrington Company v. United States, 764 F.2d 1563 (Fed. Cir. 1985), a case arising under the generalized system of preference statute, the court found that sewing machine needles made in a beneficiary developing country ("BDC") from wire manufactured in a non-BDC were substantially transformed in the BDC. Customs ruled in HQ 730999 (December 12, 1988), that imported surgical needles attached to thread in the U.S. and thereby made into sutures suitable for use in cardiovascular surgery were substantially transformed in the U.S. Customs stated in that ruling that "the surgical needles alone, prior to processing, have no apparent use; it is only after the addition of surgical thread that the article becomes known as a suture and is suitable for use in surgery to bind body tissue." In this case, the spools of wire and thread are made into an ophthalmic suture, a new article having a new name, character or use in West Germany. In accordance with HQ 730999 and consistent with Torrington, the West German processing is considered a substantial transformation. Therefore, the country of origin of the imported article for marking purposes is West Germany.

The term "ultimate purchaser is defined in section 134.1(d), Customs Regulations (19 CFR 134.1(d)), as generally the last person in the U.S. who will receive the article in the form in which it was imported. If the article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. In this case, medical offices and hospitals would purchase the finished imported articles. Therefore, the ultimate purchaser would be the hospital or medical office which ordered and paid for the imported ophthalmic sutures.

Pursuant to 19 U.S.C. 1304(a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), imported articles for which the marking of the containers will reasonably indicate the origin of the articles are not required to be individually marked. The exception set forth in 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d) applies in cases where the article is imported in a properly marked container and Customs officials at the port of entry are satisfied that the ultimate purchaser will receive it in its unopened marked container.

Because the imported article in this case will be packaged in the U.S. after importation, section 134.34, Customs Regulations (19 CFR 134.34), would apply. This section states that an exception may be authorized under section 134.32(d) in the discretion of the district director for imported articles which are to be repacked after release from Customs custody under the following conditions: (1) The containers in which the articles are repacked will indicate the origin of the articles to an ultimate purchaser in the U.S. (2) The importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense or secures such verification, as may be necessary, by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry.

The individual packages, which contain one suture each, are sealed sterile containers. Clearly, it would be acceptable to mark the country of origin on each individual container. However, you propose to only mark the country of origin on the unsealed paper sleeves. If the district director is satisfied that the ophthalmic sutures are only sold in bulk and packaged in these sleeves and that the ophthalmic sutures only reach the medical offices in these sleeves, then the imported article and the individual packaging may be excepted from marking, in the discretion of the district director, in accordance with 19 CFR 134.34.

The container must be marked to indicate that the country of origin of the ophthalmic sutures is West Germany. The package may also indicate the country of origin of the various components, but the phrase "sutures made in U.S.A." would be considered misleading. The word "sutures" refers to the completed product and could mislead the ultimate purchaser as to its country of origin.

We also note that section 134.46, Customs Regulations (19 CFR 134.46), would apply to any U.S. addresses appearing on the packaging. Section 134.46, Customs Regulations (19 CFR 134.46), requires that when the name of any city or locality in the U.S., other than the name of the country or locality in which the article was manufactured or produced, appears 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 purpose of this section is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the actual origin of the imported article. If, as proposed, the only U.S. address appearing on the packaging is just above the country of origin marking and in comparable size, the marking would satisfy the requirements of 19 CFR 134.46.

HOLDING:

The spools of wire and thread are substantially transformed in West Germany into ophthalmic sutures. If the district director is satisfied that the ophthalmic sutures are only sold in bulk and packaged in these sleeves and that the ophthalmic sutures only reach the medical offices in these sleeves, then the imported article and the individual packaging may be excepted from marking, in the discretion of the district director, in accordance with 19 CFR 134.34.

Sincerely,

Marvin M. Amernick
Chief, Value, Special Programs

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