HQ 561785 - Country of Origin Marking for Certain Surgical Needles with Attached Surgical Thread or Suture - United States International Trade Commision Rulings

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HQ 561785

January 22, 2002

MAR-2-05 RR:IA 561785 RFC

CATEGORY: MARKING

Mr. Jonathan Green
Attorney at Law
4740 Connecticut Avenue, N.W., Suite 708
Washington, D.C. 20008

RE: Country of Origin Marking for Certain Surgical Needles with Attached Surgical Thread or Suture

Dear Mr. Green:

This is in reference to your June 12, 2000, letter relating to a ruling request on behalf of SutraTec, Inc., 6489 Parkland Drive, Sarasota, Florida 34243, concerning country of origin marking for certain surgical needles with attached surgical thread or suture.

FACTS:

The materials and processes used to manufacture the surgical needles with attached thread or suture under consideration are described as follows in the ruling request: U.S.-origin steel wire is shipped on spools to India where it is cut to length and pressed into raw needle shoats using cold form pressing. A channel is then formed through a heating and cold-forming process to impart a "groove" into the tail end of the needle to later accommodate the suture thread. The needles are then ground to impart a point and/or cutting edges and deburred to remove burrs acquired during grinding. The suture threads are then attached to the suture needles. The threads used in SutraTec sutures are of U.S.-origin. The sutures will then be exported from India to SutraTec, Inc., located in the United States.

As imported, the sutures will have only straight needles. Some suture with straight needles will be sold in their imported form for surgical applications appropriate to straight needles. Some straight sutures will be curved in the United States. The curvature may be 1/4, 3/8, 1/2 or 5/8 of the arc of a circle, that is, a curvature of 90, 135, 180 and 225 degrees, respectively. The degree of curvature imparted will depend on the specific surgical application for which the suture is intended. It is SutraTec's position that curving operations performed in the United States result in a substantial transformation of the straight sutures, and that these are new articles, curved sutures, which have a name, character and use different from the articles from which they were created.

ISSUE:

Whether an operation involving the bending of straight surgical needles into curved needles results in a substantial transformation of the needles.

LAW AND ANALYSIS:

The U.S. law relating to country of origin marking for imported merchandise ("the marking statute") is found in section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304). This law 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. See 19 U.S.C. § 1304(a). Products made in the United States do not have to be marked with their country of origin under this statute. The purpose of the marking statute is to allow the ultimate purchaser of the goods to know, by simple inspection, specifically where they were made in case such knowledge might influence his or her decision to purchase the goods (i.e., to permit the ultimate purchaser in the United States to choose between domestic and foreign-made products, or between the products of different foreign countries). See generally, United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, at 302 (1940).

The "ultimate purchaser" is defined in Part 134 of the Customs Regulations as:

[G] enerally the last person in the United States who will receive the article in the form in which it was imported; however, for a good of a NAFTA country, the ``ultimate purchaser'' is the last person in the United States who purchases the good in the form in which it was imported.

19 CFR § 134.1(d).

An article of foreign origin that is substantially transformed in the United States is excepted from being marked. See 19 CFR 134.35. A substantial transformation occurs when an imported article is used in a manufacturing process or operation that results in a new article having a new name, character or use different from that of the original imported article. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); National Hand Tool Corp. v. United States, 989 F.2d 1201 (Fed. Cir. 1992).

In the instant case, when the steel wire of U.S. origin is made into surgical needles in India, the steel has been substantially transformed into surgical needles with India as the country of origin. See generally, Torrington Co. v. United States, 764 F.2d 1563 (Fed. Cir. 1985); see also HQ 554957 (March 7, 1990); HQ 561167 (December 14, 1998). Moreover, the Customs Service has held in prior HQ rulings that when wire of U.S. origin is made into surgical needles in a foreign country, and surgical thread of U.S. origin is then attached to the needles in the foreign country, each product has been substantially transformed with the resulting combined surgical needle with attached surgical thread or suture being a new article having a new name, character and use different from that of the original wire and thread. See HQ 554957 (March 7, 1990); HQ 561167 (December 14, 1998). Accordingly, in the instant case, the wire and surgical thread or suture have been substantially transformed so that the combined articles become a product of India.

Whether the curving of the surgical needles in the United States results in the product becoming a product of the United States will depend on whether the curving operation constitutes a substantial transformation of the surgical needles with attached suture. Upon a review of the operation involved, the act of taking straight surgical needles and bending or curving them does not constitute a substantial transformation. That is, one begins with a surgical needle and the process results in or ends with a surgical needle. There has been no significant change in name, character or use different from that of the original imported needle. Although straight and curved needles may have different surgical applications, the underlying purpose of both types is the same. Therefore, the country of origin of the surgical needles does not change as a result of being curved in the United States; the combined surgical needle and surgical thread or suture remains a product of India for country of origin marking purposes.

The Customs Service has ruled in the past that the ultimate purchaser of imported surgical needles with attached surgical thread or suture that is imported for sale to or use by medical facilities is the medical facilities themselves. See HQ 554957 (March 7, 1990); HQ 561167 (December 14, 1998). Accordingly, in the instant case, the ultimate purchasers of the product are the medical facilities to whom the surgical needles with attached thread or suture are sold or provided to and not the company that performs the curving operations in the United States.

There exist certain exceptions to the marking requirements in the marking statute. One of those exceptions can be found in section 1304 (a)(3)(D). It deals with those situations where the marking of the container that holds the imported merchandise will reasonably indicate the origin of the merchandise. Under section 1304 (a)(3)(D) to the marking statute, an imported article is not required to be marked with its country of origin if:

The marking of a container of such article will reasonably indicate the origin of such article.

Part 134, Customs Regulations (19 CFR §134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Subpart D to part 134 implements the exceptions in the marking statute. Section 134.32 (d) to subpart D lists the following exception:

Articles for which the marking of the containers will reasonably indicate the origin of the articles.

19 CFR § 134.32 (d).

The Customs Service has ruled in the past that products that are imported for sale to or use by medical facilities need not be individually marked as to their country of origin but rather could be marked on the packages or on the outside of the containers in which the products were packed provided the medical facility receives the products in such properly marked packages or containers. See generally, HQ 560266 (January 17, 1997). In the instant case, if the imported surgical needles with attached thread or suture are sold to or provided for use by medical facilities in properly marked containers, they may be excepted from the country of origin marking requirements under section 304 of the Tariff Act of 1930 (19 U.S.C. § 1304 (a)(3)(D) and 19 CFR § 134.32 (d)).

HOLDING:

The country of origin of the above-described curved surgical needles with attached surgical thread or suture for country of origin marking purposes is India.

The above-mentioned products may be excepted from the country of origin marking requirements set forth in the marking statute (see 19 U.S.C. § 1304) provided the boxes or containers in which the products are packed and shipped to the medical facilities who might buy or use them are marked with the country of origin of the products.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs Service officer handling the transaction.

Sincerely,

John A. Durant, Director
Commercial Rulings Division

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