H322967

HQ H322967 March 30, 2023 OT:RR:CTF:FTM H322967 TJS CATEGORY: Origin Ms. Chandri Navarro Hogan Lovells U.S., LLP 555 13th Street Northwest Washington, District of Columbia 20004 Re: Affirmation of NY N319278; Country of Origin of Hypodermic Safety Needles; Substantial Transformation Dear Ms. Navarro, This is in response to your request, dated January 10, 2022, on behalf of your client Cardinal Health, Inc. (“Cardinal Health”), for reconsideration of New York Ruling Letter (“NY”) N319278, issued on May 21, 2021. In that ruling, U.S. Customs and Border Protection (“CBP”) determined the country of origin of hypodermic safety needles constructed from component parts of various origins. While CBP also opined on the proper method of marking for the hypodermic safety needles at issue, you specifically request reconsideration of CBP’s country of origin determination. Specifically, CBP found that the country of origin of the hypodermic safety needles was “China, Japan, France or South Korea depending on the country of origin of the stainless steel needles/cannulae.” We have reviewed NY N319278 and determined that it is correct, and for the reasons set forth below we are affirming that ruling. Within your request for reconsideration, you asked that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), your request for confidentiality is approved. The information contained within the brackets of your request for reconsideration, which was not already publicly disclosed in NY N319278, that was submitted to our office will not be released to the public and will be withheld from published versions of this ruling. NY N319278 described the hypodermic safety needles as follows: The products under consideration are hypodermic safety needles individually packaged in a preformed sterile barrel film pocket, sealed closed with a sterile barrier paper lidding. Each hypodermic safety needle consists of four parts: (1) a stainless steel needle (also referred as cannula) – a thin hollow tube with a sharp tip, (2) a plastic hub adapter, (3) a plastic needle safety shield, and (4) a plastic needle sheath (cap). The stainless steel needles/cannulae are purchased and imported into the United States. They are already cut to length and sharpened when imported and can be of Chinese, Japanese, French or South Korean origin. The plastic hub adapters, plastic needle safety shields and plastic needle sheaths are all manufactured through a molding process in the United States where the plastic pieces are then assembled with the purchased stainless steel needles, packaged, and sterilized. Furthermore, NY N319278 provides comprehensive descriptions of the various processing the hypodermic safety needles are subject to, such as the assembly process, the sterile packaging process, and the sterilization process. These processing descriptions state: Assembly Process: The plastic molded components (hub, shield, sheath) are assembled with the stainless steel needle/cannula using UV epoxy in an automated sequential assembly process. Each component/raw material is added into the indexing sequence at the proper process step. As the machine indexes and builds the assembly, several stations within the process perform product alignment for quality/design, perform automated dimensional visual inspections utilizing high technology vision systems, and track the quality of individual parts all through the process until they are completed. This creates the needle assembly. The needle assemblies are then staged to await packaging. Sterile Packaging Process: The needle assembly is placed in a preformed sterile barrel film pocket, sealed closed with a sterile barrier paper lidding in a continuous automated packaging machine. The individual needles are cut/perforated into groups for placement into unit cartons of a specific count. The cartons containing the packaged assemblies receive an “Instruction For Use,” and the cartons are closed and lot coded. The cartons are then forwarded into an automated corrugated loading system, sealed closed, labelled, lot coded and then palletized for transport to sterilization. Sterilization Process: The corrugated cases are placed in metal carriers to transport through the irradiation process on a timed indexing sequence. The metal carriers progress through the irradiator maze, allowing products inside the carrier to be exposed to the appropriate dose of gamma irradiation. The metal carriers then exit the irradiator and are repalletized, shrink wrapped and staged, awaiting quality release, and distribution for fulfillment of customer orders. In your request for reconsideration, you contend that the country of origin of the hypodermic safety needles for marking purposes is the United States. Specifically, you assert that NY N319278 “misapplied CBP precedent to find that the cannula used in the manufacture of the hypodermic safety needles imparts the essential character, and consequently the origin, to the hypodermic safety needles.” Instead, you contend that the “extensive and complex manufacturing and assembly operations substantially transform [the] imported cannulae of various origins into a new and different article of commerce.” As a result, you conclude that the “finished hypodermic safety needles [are] of U.S. origin.” 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 container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so 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.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Part 134, U.S. Customs and Border Protection Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b) defines “country of origin” as: [T]he country of manufacture, production, or growth of any article of foreign origin entering the United States. 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 [the marking regulations]… A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. M.B.I. Merchandise Industries, Inc. v. United States, 16 C.I.T. 495, 502 (1992) (citing United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267, 270 (C.A.D. 98) (1940)). The question of whether a substantial transformation occurs for marking purposes is a question of fact, to be determined on a case-by-case basis. National Hand Tool Corp. v. United States, 16 C.I.T. 308, 311 (1992) (quoting Uniroyal Inc. v. United States, 3 C.I.T. 220 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983)). Courts have held that when the properties and uses of a product are predetermined by the material from which it was made, no substantial transformation occurs. Superior Wire v. United States, 669 F. Supp. 472 (Ct. Int’l Trade 1987), aff’d, 867 F.2d 1409 (Fed. Cir. 1989). For courts to find a change in character, there often needs to be a substantial alteration in the characteristics of the articles or components. See,

together surgical incisions. Thus, they are more akin to sewing needles as opposed to injection needles. Suture needles are generally hook-shaped, with distinct “eyes” or channels on the dull end where suture thread is attached for medical use. These needles are then utilized in a manner virtually identical to a sewing needle, in that they act as a guide for the surgical thread. In contrast, here, we are dealing with pre-cut, stainless steel injection needles whose purpose is to subdermally inject or withdraw liquids. Put simply, these “needles” are homonyms – both understood as “needles” but with completely different lexical definitions and purposes. As such, while we agree with our earlier determinations, we do not find them informative to our current analysis.As the name, character, and use of the pre-cut, stainless steel needles/cannulae remain unchanged after the attachment of the plastic components to form the completed hypodermic safety needle, we find that the pre-cut, stainless steel needles/cannulae are not substantially transformed as a result of assembly and processing operations in the United States. Therefore, based on the facts provided, the country of origin of the hypodermic safety needles is China, Japan, France, or South Korea depending on where the pre-cut, stainless steel needles/cannulae are manufactured. Accordingly, we affirm NY N319278.Sincerely,Yuliya A. Gulis, DirectorCommercial and Trade Facilitation Division