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HQ 555750


January 14, 1991
CLA-2 CO:R:C:V 555750 SER

CATEGORY: CLASSIFICATION

Jeremy R. Page, Esq.
Katten, Muchin & Zavis
525 West Monroe St.
Suite 1600
Chicago, Il 60606-3693

RE: CBERA eligibility of medical products from the Dominican Republic or Costa Rica

Dear Mr. Page:

This is in reference to your letter of September 28, 1990, on behalf of Baxter Healthcare Corporation, concerning duty-free treatment of medical products from the Dominican Republic or Costa Rica under the Caribbean Basin Economic Recovery Act (CBERA)(19 U.S.C. 2701-2706).

FACTS:

The merchandise at issue consists of a wide variety of medical devices and products, e.g., blood and plasma collection and transfusion products, solution administration sets, and suction catheters. On the whole, the components for these items are sourced from Puerto Rico, and, in some instances a small number of components are sourced from the U.S. They are assembled and tested, by divisions of Baxter, in the Dominican Republic or Costa Rica, and then imported directly to the customs territory of the U.S. You specifically ask whether these articles are entitled to duty-free treatment pursuant to section 215 of the recently-enacted Customs and Trade Act of 1990.

ISSUE:

Whether the merchandise at issue is entitled to duty-free treatment under the CBERA.

LAW AND ANALYSIS:

Section 215 of the Customs and Trade Act of 1990 (Public Law 101-382) amended section 213(a) of the CBERA (19 U.S.C. 2703(a)) to provide for the duty-free treatment of articles (other than those ineligible for CBERA treatment), which are the growth, product, or manufacture of Puerto Rico and which subsequently are processed in a CBERA beneficiary country (BC). The duty-free
treatment provided under 19 U.S.C. 2703(a)(5) applies to an article which is the growth, product, or manufacture of Puerto Rico, if:

(A) the article is imported directly from the beneficiary country into the customs territory of the United States,

(B) the article was by any means advanced in value or improved in condition in a beneficiary country, and

(C) if any materials are added to the article in a beneficiary country, such materials are a product of a beneficiary country or the United States.

This provision was effective for articles entered, or withdrawn from warehouse for consumption, on or after October 1, 1990.

The medical articles at issue satisfy the above requirements. Practically all of the components used in the assembly of the articles at issue are the product or manufacture of Puerto Rico. Any components not sourced in Puerto Rico are the product of the U.S. In addition, as stated in General Note 3(c)(v)(A), Harmonized Tariff Schedule of the United States Annotated (HTSUSA), Costa Rica and the Dominican Republic, the countries in which the articles are subsequently processed, are BCs for the purposes of CBERA.

Moreover, the various medical products are CBERA-eligible articles. All of the articles items are classifiable in subheading 9018.90.8000, HTSUSA, which provides for instruments and appliances used in medical, surgical, dental or veterinary sciences, other instruments and appliances and parts and accessories thereof, other, other. This provision is a CBERA eligible provision. It is also required that the articles be advanced in value or improved in condition by any means in a BC. Clearly, the operations that are performed in the Dominican Republic or Costa Rica fulfill this requirement of the legislation.

We are enclosing for your information copies of Headquarters telexes to Customs field offices dated September 28, 1990 (9264071)and December 20, 1990 (1354071), which set forth procedures for the entry of articles under 19 U.S.C. 2703(a)(5).

HOLDING:

The medical articles at issue are CBERA eligible articles, which are assembled from components which are the growth, product, or manufacture of Puerto Rico or the U.S., and are subsequently advanced in value or improved in condition in a BC. Therefore, assuming that the articles are imported directly into the customs territory of the United States, they are entitled to duty-free treatment under 19 U.S.C. 2703(b)(5), upon compliance with the documentation requirements set forth in Headquarters' telexes dated September 28, and December 20, 1990.

Sincerely,

John Durant, Director
Commercial Rulings Division

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