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HQ 562121




July 27, 2001

MAR-05 RR:CR:SM 562121 TJM

CATEGORY: MARKING

Mr. Brad Elliott
Cobe Cardiovascular, Inc.
14401 W. 65th Way
Arvada CO 80004-3599

RE: Country of origin marking for cardioplegia device assembled in Mexico of U.S. components; NAFTA marking rules; 19 USC § 1304; 19 CFR § 134.43; 19 CFR § 102.11(b).

Dear Mr. Elliott:

This is a response to your letter dated May 8, 2001, requesting a ruling on country of origin marking of cardioplegia devices assembled in Mexico with U.S. components. Our response follows.

FACTS:

Cobe Cardiovascular, Inc., (“Cobe”) manufactures the cardioplegia device (“device”) used in heart surgery. Cobe supplies these devices to hospitals or perfusion groups. The device is intended to mix oxygenated blood with cardioplegia solution, containing potassium and other additives, in a specific ratio and deliver this mixture at a selected temperature to the coronary arteries of the heart. The device consists of a housing and various tubing configurations, which are connected to the housing. The housing contains a hydrophobic membrane, a one-way valve, a pressure relief valve, a 105 micron filter screen, a temperature monitoring port and a pressure monitoring port. The housing is designed so that air entering with the blood cardioplegia mixture rises to the membrane, and is vented to the atmosphere. The one-way valve keeps air from coming into the system. The pressure relief valve is designed to relieve excess pressure in the event of outlet line clamping and has tubing attached to it to vent the solution to the cariodtomy reservoir. The temperature monitoring port is used to measure the temperature of the blood cardioplegia mixture. The pressure monitoring line is connected to either a pressure manometer or a transducer to measure pressure.

The various tubing is made up of lines to bring blood and cardioplegia solution into the housing and to deliver this blood cardioplegia to the coronary arteries. There are two spikes on the crystalloid line to allow the physician to administer a high concentration of potassium to maintain the arrest of the heart. Tubing clamps are provided to allow for switching.

The housing will be fully assembled in the United States. Tubing components are also made in the United States. After these components are shipped to Mexico, the spike lines and one of the tubing components will be assembled to the inlet line by hand in Mexico. Then, the inlet assembly, outlet line, and the pressure lines are manually attached to the cardioplegia device. The assembled device along with four other items will be coiled into a tray. The tray is then sealed. After the assembly process in Mexico, the device will be shipped to the United States, where the device will be inspected, sterilized, and distributed.

ISSUE:

What is the proper country of origin marking for the cardioplegia device assembled in Mexico with U.S. components?

LAW AND ANALYSIS:

General Marking Requirements

As you are aware, 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 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 U.S. the English name of the country of origin of the article. 19 CFR part 134 implements the country of origin marking requirements of 19 U.S.C. § 1304.

Section 134.1(d), Customs Regulations (19 CFR § 134.1(d)), provides that the “ultimate purchaser” is generally the last person in the United States who will receive the article in the form in which it was imported. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of origin of which the goods is the product. The evident purpose is to mark the goods so that at the time of the 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.” United States v. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940). Country of Origin

The country of origin of a "good of a NAFTA country" is determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by 19 C.F.R. § 102.11. Section 102.11, Customs Regulations (19 CFR § 102.11), sets forth the required hierarchy for determining the country of origin for marking purposes. Specifically, section 102.11(a), Customs Regulations (19 CFR § 102.11(a)) states, in pertinent part, that:

[t]he country of origin of a good is the country in which:

(1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied.

Because the product at issue is not wholly obtained or produced in Mexico and because the product is not produced exclusively from “domestic” (Mexican) material, we proceed to a consideration of section 102.11(a)(3). Pursuant to section 102.11(a)(3), the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20. Section 102.20, Customs Regulations (19 CFR § 102.20), sets forth the specific tariff classification changes and/or other operations, which are specifically required in order for country of origin to be determined on the basis of operations performed on the foreign materials contained in a good.

In the instant case, Customs has determined that for cardioplegia devices, subheading 9018.90, Harmonized Tariff Schedule of the United States (HTSUS) is applicable. See New York Ruling (NY) G85991, dated January 9, 2001, which was in response to your company’s request to the National Commodity Specialist Division. Subheading 9018.90, HTSUS, provides for “other” instruments and appliances, and parts and accessories thereof used in medical surgical, or veterinary sciences. Based on the assumption that the device in the instant case is comparable to the product in NY G85991 and assuming that this is the correct classification of the said product, the change in tariff classification must be made in accordance with section 102.20(q), Section XVIII: Chapters 90 through 92, subheading 9018.90, HTSUS, which states, in pertinent part, that: A change to subheading 9018.90 from any other subheading, except from subheading 9001.90 or synthetic rubber classified in heading 4002 when resulting from a simple assembly; or a change to defibrillators from printed circuit assemblies, except when resulting from a simple assembly.

This means that each foreign material (non-Mexican components in this case) incorporated in the cardioplegia device must undergo a change in classification. Moreover, if foreign materials classifiable in either 9001.90, 9018.90, or heading 4002 are used, they must either be classifiable elsewhere than in subheading 9018.90, 9001.90, or heading 4002 or, alternatively, if classifiable in one of those provisions, must have undergone the change in classification (or the change from printed circuit assemblies to defibrillators within subheading 9018.90) other than by means of a simple assembly. Note 2 to chapter 90 of the HTSUS states that:

Subject to note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:

Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85, or 91 (other than heading 8485, 8548 or 9033) are in all cases to be classified in their respective headings; Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instrument or apparatus of the same heading (including a machine, instrument or apparatus of heading 9010, 9013, 9031) are to be classified with the machines, instrument or apparatus of that kind.

In the instant case, based on the information provided, it appears that the housing of the cardioplegia device and the tubing are not classifiable in chapters 84, 85, or 91. Based on the fact that the housing and the tubing’s intended use is as part of the cardioplegia device, and has little or no value apart from that intended use, it is our opinion that those parts are classifiable as a part or accessory of the cardioplegia device within the same subheading, 9018.90.80, HTSUS. See 560297, dated March 28, 1997; HRL 088469, dated Feb. 26, 1991; HRL 953545, dated May 10, 1993. Therefore, the assembly process in Mexico does not satisfy the tariff shift requirement of section 102.20(q).

Consequently, the next level in the hierarchy of the NAFTA rules of origin is set forth in section 102.11(b), Customs Regulations (19 CFR § 102.11(b)), which states, in pertinent part, that:

. . . .where the country of origin cannot be determined under paragraph (a) of this section: (1) the country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good. . . .

19 C.F.R. § 102.1(l) defines material to include a “good that is incorporated into another good as a result of production with respect to that other good, and includes parts, ingredients, subassemblies, and components.”

As previously stated, the purpose of this device is to mix oxygenated blood with cardioplegia solution, containing potassium and other additives, in a specific ratio and deliver this mixture at a selected temperature to the coronary arteries of the heart. The housing contains a hydrophobic membrane, a one-way valve, a pressure relief valve, a micron filter screen, a temperature monitoring port and a pressure monitoring port. The tubing lines that are connected to the housing provide the conduit for the delivery of the blood and solution. However, the housing is the essential component which provides the primary functions of the device. The housing components, which are produced in the United States, are assembled in the United States to produce the housing. Pursuant to section 102.11(b)(1), Customs Regulations (19 CFR § 102.11(b)(1)), the housing provides the essential character to the cardioplegia device. Therefore, the country of origin of the device for Customs purposes is the United States. Country of origin marking requirements do not apply to U.S. origin goods.

However, the fact that a product is not required to be marked does not mean that it is permissible to label the product as “Made in the U.S.A.” The use of the term “Made in the U.S.A.” is subject to the jurisdiction of the Federal Trade Commission (FTC). Regarding FTC requirements, you should contact the FTC directly at:

Bureau of Consumer Protection
Division of Enforcement
Federal Trade Commission
600 Pennsylvania Ave, NW
Washington DC 20580

Telephone 877-382-4357
URL address: www.ftc.gov

HOLDING:

Based on the information provided and pursuant to the hierarchy of the NAFTA rules of origin (19 CFR 102.21(b)(1)), the country of origin of the product at issue is the United States because the housing, which is produced in the United States, imparts the essential character of the product.

For country of origin marking purposes, because the product at issue is not considered foreign in origin, country of origin marking requirements do not apply. Although no marking is required upon importation, this does not mean that it is permissible to mark the product as “Made in the U.S.A.” Such representation is regulated by the Federal Trade Commission.

A copy of this ruling letter should be attached to the entry documents filed at the time the 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

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