[Federal Register Volume 83, Number 140 (Friday, July 20, 2018)]
[Notices]
[Pages 34603-34605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15536]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning Certain
Insufflation Tubing
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
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SUMMARY: This document provides notice that U.S. Customs and Border
Protection (``CBP'') has issued a final determination concerning the
country of origin of certain insufflation tubing. Based upon the facts
presented, CBP has concluded that the country of origin of the
insufflation tubing in question is China, for purposes of U.S.
Government procurement.
DATES: The final determination was issued on July 13, 2018. A copy of
the final determination is attached. Any party-at-interest, as defined
in 19 CFR 177.22(d), may seek judicial review of this final
determination within August 20, 2018.
FOR FURTHER INFORMATION CONTACT: Yuliya A. Gulis, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at (202)
325-0042.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on July 13,
2018, pursuant to subpart B of Part 177, U.S. Customs and Border
Protection Regulations (19 CFR part 177, subpart B), CBP issued a final
determination concerning the country of origin of certain insufflation
tubing imported by Global Resources International, Inc. from the
Dominican Republic, which may be offered to the U.S. Government under
an undesignated government procurement contract. This final
determination, HQ H298148, was issued under procedures set forth at 19
CFR part 177, subpart B, which implements Title III of the Trade
Agreements Act of 1979, as amended (19 U.S.C. 2511-18). In the final
determination, CBP concluded that the country of origin of the
insufflation tubing is China for purposes of U.S. Government
procurement.
Section 177.29, CBP Regulations (19 CFR 177.29), provides that a
notice of final determination shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial
review of a final determination within 30 days of publication of such
determination in the Federal Register.
Dated: July 13, 2018.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H298148
July 13, 2018
OT:RR:CTF:VS H298148 YAG
CATEGORY: Origin
Ms. Christi Roos, LCB
M-PACT Solutions
P.O. Box 30209
4294 Swinnea Road
Memphis, TN 38118
RE: U.S. Government Procurement; Country of Origin of Insufflation
Tubing; Title III, Trade Agreements Act of 1979 (19 U.S.C. Sec.
2511 et seq.); Subpart B, Part 177, CBP Regulations
Dear Ms. Roos:
This is in response to your correspondence dated March 26, 2018,
requesting a final determination, on behalf of Global Resources
International, Inc. (``Global Resources''), concerning the country
of origin of certain
[[Page 34604]]
insufflation tubing, pursuant to subpart B of Part 177 of the U.S.
Customs and Border Protection (``CBP'') Regulations (19 C.F.R. Sec.
177.21 et seq.).
We note that Global Resources is a party-at-interest within the
meaning of 19 C.F.R. Sec. 177.22(d)(1) and is entitled to request
this final determination.
FACTS:
Global Resources is the importer of insufflation tubing.
Insufflation tubing is used to interconnect and deliver carbon
dioxide gas (``CO2'') from the insufflator machine
(CO2 ``gas pump'' or insufflator) to the patient during
laparoscopic surgery. Insufflation tubing is typically 3 meters
(around 10 feet) in length, composed of a long clear plastic tubing
and a short blue plastic tubing, with a filter attached about 30
centimeters (12 inches) from one end. The purpose of the filter is
to prevent fluid backflow into the insufflator and to help prevent
contaminants from entering the patient's abdominal cavity. One end
of the tubing is comprised of a male Luer lock fitting, which always
connects to an instrument that is inserted into the patient's
abdomen. The other end connects to the insufflator, which may
contain any number of types of fittings.
The country of origin of the clear tubing, blue tubing, filter
assembly, and fittings is China. The insufflation tubing is
assembled, sterilized, packed, and labeled in the Dominican
Republic.
ISSUE:
What is the country of origin of the insufflation tubing for
purposes of U.S. Government procurement?
LAW AND ANALYSIS:
CBP issues country of origin advisory rulings and final
determinations as to whether an article is or would be a product of
a designated country or instrumentality for the purposes of granting
waivers of certain ``Buy American'' restrictions in U.S. law or
practice for products offered for sale to the U.S. Government,
pursuant to subpart B of Part 177, 19 C.F.R. Sec. 177.21 et seq.,
which implements Title III of the Trade Agreements Act of 1979
(``TAA''), as amended (19 U.S.C. Sec. 2511 et seq.).
Under the rule of origin set forth under 19 U.S.C. Sec.
2518(4)(B):
An article is a product of a country or instrumentality only if
(i) it is wholly the growth, product, or manufacture of that country
or instrumentality, or (ii) in the case of an article which consists
in whole or in part of materials from another country or
instrumentality, it has been substantially transformed into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.
See also 19 C.F.R. Sec. 177.22(a).
In rendering advisory rulings and final determinations for
purposes of U.S. Government procurement, CBP applies the provisions
of subpart B of Part 177 consistent with the Federal Procurement
Regulations. See 19 C.F.R. Sec. 177.21. In this regard, CBP
recognizes that the Federal Acquisition Regulations restrict the
U.S. Government's purchase of products to U.S.-made or designated
country end products for acquisitions subject to the TAA. The
regulations define a ``designated country end product'' as:
WTO GPA [World Trade Organization Government Procurement
Agreement] country end product, an FTA [Free Trade Agreement]
country end product, a least developed country end product, or a
Caribbean Basin country end product.
A ``WTO GPA country end product'' is defined as an article that:
(1) Is wholly the growth, product, or manufacture of a WTO GPA
country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in a WTO GPA country into a new and different article of
commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term refers
to a product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services (except transportation services) incidental to the article,
provided that the value of those incidental services does not exceed
that of the article itself.
See 48 C.F.R. Sec. 25.003.
The Dominican Republic is a WTO GPA country. China is not. You
assert that the insufflation tubing at issue is a product of the
Dominican Republic for U.S. Government procurement purposes because
all of the components of insufflation tubing, sourced from China,
meet the requisite tariff shift rules under the Dominican Republic-
Central America-United States Free Trade Agreement (``DR-CAFTA'').
Please note that this is an incorrect analysis to apply to determine
the country of origin for U.S. Government procurement purposes.
Rather, as set forth below, the relevant test is ``substantial
transformation.''
In the Court of International Trade's decision in Energizer
Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the
court interpreted the meaning of substantial transformation as used
in the Trade Agreements Act of 1979 for purposes of government
procurement. Energizer involved the determination of the country of
origin of a flashlight, referred to as the Generation II flashlight,
under the TAA. Other than a white LED and a hydrogen getter, all of
the components of the Generation II flashlight were of Chinese
origin. The components were imported into the United States where
they were assembled into the finished Generation II flashlight.
The court reviewed the ``name, character and use'' test in
determining whether a substantial transformation had occurred, and
reviewed various court decisions involving substantial
transformation determinations. The court noted, citing Uniroyal,
Inc. v. United States, 3 CIT 220, 226, 542 F. Supp. 1026, 1031,
aff'd, 702 F.2d 1022 (Fed. Cir. 1983), that when ``the post-
importation processing consists of assembly, courts have been
reluctant to find a change in character, particularly when the
imported articles do not undergo a physical change.'' Energizer at
1318. In addition, the court noted that ``when the end-use was pre-
determined at the time of importation, courts have generally not
found a change in use.'' Energizer at 1319, citing as an example,
National Hand Tool Corp. v. United States, 16 CIT 308, 310, aff'd
989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered
the nature of the assembly, i.e., whether it is a simple assembly or
more complex, such that individual parts lose their separate
identities and become integral parts of a new article.
In reaching its decision in Energizer, the court examined
whether the imported components retained their names after they were
assembled into the finished Generation II flashlights. The court
found ``[t]he constitutive components of the Generation II
flashlight do not lose their individual names as a result [of] the
post-importation assembly.'' The court also found that the
components had a pre-determined end-use as parts and components of a
Generation II flashlight at the time of importation and did not
undergo a change in use due to the post-importation assembly
process. Finally, the court did not find the assembly process to be
sufficiently complex as to constitute a substantial transformation.
Thus, the court found that Energizer's imported components did not
undergo a change in name, character, or use as a result of the post-
importation assembly of the components into a finished Generation II
flashlight. The court determined that China, the source of all but
two components, was the correct country of origin of the finished
Generation II flashlights under the government procurement
provisions of the TAA.
The assembly process of insufflation tubing is similar to that
of the Generation II flashlight in Energizer. All of the components
are sourced from China, and there is no evidence of a change in the
shape or material composition of the components. See also
Headquarters Ruling Letter (``HQ'') H035441, dated September 11,
2008; and HQ 734214, dated November 18, 1991. In other words, the
individual components do not lose their separate identities as a
result of the assembly process in the Dominican Republic and do not
undergo a change in their pre-determined uses. Considering the
totality of the information provided to CBP, and relying upon the
court's application of substantial transformation in Energizer, we
find that the country of origin of the assembled insufflation
tubing, produced as described herein, is China.
HOLDING:
Based on the facts provided, insufflation tubing will be
considered a product of China for purposes of U.S. Government
procurement.
Notice of this final determination will be given in the Federal
Register, as required by 19 C.F.R. Sec. 177.29. Any party-at-
interest other than the party which requested this final
determination may request, pursuant to 19 C.F.R. Sec. 177.31, that
CBP reexamine the matter anew and issue a new final determination.
Pursuant to 19 C.F.R. Sec. 177.30, any party-at-interest may,
within 30 days of publication of the Federal Register Notice
referenced above, seek judicial review of this final determination
before the Court of International Trade.
[[Page 34605]]
Sincerely,
Alice A. Kipel,
Executive Director Regulations and Rulings Office of Trade.
[FR Doc. 2018-15536 Filed 7-19-18; 8:45 am]
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