Country of origin marking of Disposable Insulin device and Filling Accessory

HQ H226196 August 22, 2012 CLA-2 OT:RR:CTF:TCM H226196 MG CATEGORY: Marking TARIFF NO.: N/A Mark N. Bravin Winston & Strawn LLP 1700 K Street, N.W. Washington, D.C. 20006 RE: Country of origin marking of Disposable Insulin device and Filling Accessory Dear Mr. Bravin: This is in response to your request, dated December 15, 2011, on behalf of Valeritas, Inc. (Valeritas), requesting a binding ruling letter on the country of origin marking requirements for packaging of certain disposable insulin delivery devices. These devices are identified as the V-Go™ disposable insulin delivery device (V-Go™) and the EZ Fill filling accessory for the V-Go™ disposable insulin delivery device (EZ Fill), which will be imported by your client Valeritas. Samples were provided with your submission. In preparation for this ruling, consideration was also given to your supplemental submissions, dated April 27, 2012, and July 13, 2012. FACTS: Products: The instant merchandise consists of the V-Go™ and the EZ Fill. According to your submissions, Valeritas intends to import this merchandise from the People’s Republic of China for eventual sale in the United States. You further submit that, under Valeritas’ business plan, manufacture of the two articles will transition over time, with certain component manufacture and assembly shifting from the United States to China. The V-GO™ is described as a mechanical, self-contained, sterile, patient-fillable, 24-hour, single use disposable insulin infusion device with an integrated stainless steel subcutaneous needle. The V-Go™ is small, lightweight, and worn under the patients clothing. It measures just 2.4 x 1.3 x 0.5 inches and weighs approximately 1 ounce when filled with insulin. The V-Go™ will not be imported pre-filled with insulin or packaged with insulin. The V-GO™ device is used for the subcutaneous infusion of insulin for the management of diabetes mellitus. The user fills each V-Go™ device with their separately prescribed insulin using the EZ Fill filling accessory. In this regard, the user activates the V-GO™ device by pushing a needle button that protrudes from the top of the device until the button is flush with the device cover and locks into place. This action simultaneously opens the fluid path and inserts subcutaneously a small gauge stainless steel needle into the user at a 90 degree angle from the surface of the skin. Once activated, the V-GO™ device delivers a continuous infusion of insulin at a fixed basal rate. The V-GO™ device also allows the users to initiate bolus dosages to supplement their basal daily insulin requirements. At the end of 24 hours, the patient engages a needle release button that retracts the needle back into the V-GO™ device base and locks the needle button so it cannot be redeployed. The EZ Fill is designed specifically to fill a month’s worth of V-Go™ devices before being discarded. The EZ Fill will not be imported pre-filled with insulin or packaged with insulin. The EZ Fill filling accessory aids the user in transferring insulin from a vial into the V-Go™. The EZ FILL and V-Go™ will be imported separately. Per your message of June 15, 2012, Valeritas is expecting to receive approval form the Food and Drug Administration (FDA) “in a matter of days to sell entirely Chinese made products in the U.S. for human use.” At that point, the EZ-Fill will be imported as a product of China. In this regard, you state that the imported EZ-Fill is a product of China and you request clarification as to what the outermost carton of bulk shipments from China should say to indicate that it is a product of China. Description of Article Manufacture / Assembly of the V-Go™ device: You submit that Valeritas intends to import V-Go™ devices from China. The V-Go™ is an assembly of 33 distinct fabricated and material components, including: 15 plastic injection molded components; 9 metal parts, including 5 wire forms, 1 drawn sleeve, 1 hypo tube, and two dowel pins; 5 rubber molded parts; and 4 miscellaneous parts, including a small diameter tube, silicon oil, adhesive/foam pad, and UV bonding adhesive. The main sub-assemblies are: (1) the Cartridge sub-assembly; (2) the Needle Button sub-assembly; and (3) the Base/Buttons sub-assembly. The Cartridge sub-assembly performs the containment/dispensing function for the drug. It is molded, assembled, and pre-sterilized before combining with other sub-assemblies and components. A rubber piston is inserted into the plastic vial; a rubber stopper is assembled to the open end of the vial. The Cartridge is sterilized by ethylene oxide (EtO). As other component production and assembly shifts to China, the cartridge sub-assembly assembly operations and sterilization will remain in the United States and final assembled and sterilized sub-assemblies will be exported to China for final incorporation. At some point in the future, however, Valeritas will have the cartridge sub-assembly manually assembled in China.
The Needle Button sub-assembly connects the drug infusion needle to the needle button. It is created by mandrel bending two 90 degree angles on a straight 28 gauge hypo tube needle with sharpened ends to form the J shaped needle. The J-needle is then placed into the needle button and then held in place using a manual heat staking process.
The Base/Button sub-assembly is the mechanical assembly that holds together the base, manifold and plastic buttons. It is made by bonding the small diameter tube to plastic manifold and sealing the port by bonding a small plastic plug into place. The manifold is then filled with silicone oil. Two rubber pistons, the bolus piston, and hydraulic piston are placed into the manifold. Two compression springs, along with a drawn spring sleeve, and plastic plunger are compressed, mated to the base and a plastic locking pin is inserted to hold the spring in place under compression. The previously assembled manifold is then mounted to the base and secured with two metal dowel pins. Several components are then added to the manifold/base subassembly using manual assembly methods. These components include the plastic bolus release button, the bolus spring, the position rack, and the bolus button. Additional components are then added to the assembly using the same manual assembly methods. The components include: the needle release button, button lock spring, compression spring and needle button. The outer plastic cover is then positioned over the entire subassembly and then bonded in place using UV adhesive bonding method.


Per your April 27, 2012 submission, virtually all fabricated components of the articles in question are currently being procured in the United States, except for a hypo tube produced in France. With regard to the above sub-assemblies, you further state that the “cartridge sub-assembly” is currently being assembled in the United States and will eventually be assembled in China. The “needle button sub-assembly” and the “base/button sub-assembly” are manually put together in China. All three of the main sub-assemblies are assembled into the final V-Go™ article in China, where initial quality control and packaging also take place. With regard to the additional manual assembly taking place in China to complete V-Go™ device, you further submit that the plastic spacer and a plastic (vial) carrier are assembled and inserted into the device. The needle button cover is snapped onto the top of the device and the adhesive backed foam pad applied to the base of the device to complete the V-Go™. Following quality control inspection, three completed V-Go™ assemblies are loaded into a 3 compartment tray, a printed Tyvek lid is placed over the tray, and the lid is heat sealed to the tray. Time, temperature, and pressure are controlled to assure the quality of the resulting seal. The trays are then bulk packed for shipment to the United States. In addition to the country of origin marking requirements for the V-GO™ and EZ-Fill devices imported separately, you further request guidance with regard to the marking on the customer-ready packaging when the EZ-Fill and V-Go are packaged together in the same box. ISSUE: What are the country of origin marking requirements with respect to the V-GO™ and EZ-Fill devices, both imported separately and together? LAW AND ANALYSIS: 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 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 marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940). Part 134, CBP Regulations (19 C.F.R. §134) implements the country of origin marking requirements of 19 U.S.C. §1304. 19 C.F.R. §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 which differs from the original material subjected to the process. U.S. v. Gibson Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). The country of origin for marking purposes is defined in 19 C.F.R. §134.1(b), as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 Part 134. A substantial transformation occurs when articles lose their identity and become new articles having a new name, character, or use. In determining whether the particular processing operations constitute a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. See Uniroyal Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (CIT 1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983) (Uniroyal). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, dated…, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). The issue of whether a substantial transformation occurs is determined on a case by case basis. See HQ 561353, dated September 19, 2002. Country of origin of the V-Go™: You submit that the origin of the V-Go™ is the United States as virtually all components are produced in the United States and retain their form through assembly and that the level of processing and assembly contemplated in China is significantly less than the milling, grinding, filing, heat treatment and acid pickling processes at issue in HQ 559847, dated January 2, 1992. Moreover, you are of the opinion that (a) the “cartridge sub-assembly” imparts the finished V-Go™ product with its essential character, and (b) because it is currently assembled in the United States, the entire V-Go™ product should thus be considered a product of the United States regardless of the location of the remaining production operations. In HQ 559847, CBP considered forceps and scissors which were hot forged into their final shape in the U.S. and exported to Pakistan. In Pakistan, the forgings underwent milling operations in which the box, rachet and jaw serrations were cut into the forceps. The milled forgings were assembled and the assembled instruments underwent grinding, filing, inspection and heat treatment, including tempering and testing for hardness. The instruments were also subjected to an acid pickling process, polishing, and chemical cleaning, final setting and adjustment operations, buffing and ultrasonic cleaning. CBP held that the operations performed in Pakistan did not substantially transform the forgings into a new and different article of Pakistani origin. In this instance, the country of origin of the finished forceps and scissors was the United States. HQ 559847 followed National Hand Tools Corp. v. United States, 16 CIT 308 (1992) (National Hand Tools), wherein the Court of International Trade determined the country of origin marking requirements for imported individual tools which were used to produce flex sockets, speeder handles and flex handles. The court found that the character of the tools remained unchanged after heat-treatment, electroplating and assembly and the form of the components remained the same since each component was either hot-forged or cold-forged into its final shape in Taiwan. This case is more akin to Uniroyal, where the Federal Circuit considered whether the addition and assembling of an outsole in the U.S. to imported uppers lasted in Indonesia effected a substantial transformation of the uppers. The court determined that the imported upper was the very essence of the completed shoe and found that it was not substantially transformed by the assembly operation in the United States because the attachment of the outsole to the upper was a minor manufacturing or combining process which left the identity of the upper intact. The upper was described as a substantially complete shoe and the manufacturing process taking place in the U.S. required only a small fraction of the time and cost involved in producing the upper. We note that the subject V-Go™ product and its assembly operations differ from that subject to Uniroyal in a number of respects. Initially, with respect to your suggestion that the “cartridge sub-assembly” imparts the overall merchandise with its essential character due to its role in dispensing the insulin to the patient, we find that the purpose of the V-Go™ goes beyond such a function. Based on the above product description and marketing, the V-Go™ not only dispenses insulin to the patient, but does so at a fixed basal rate, which is provided by both the “needle button and the “base/button” sub-assemblies. Consequently, the V-Go™ must be affixed to the patient’s body for a period of 24 hours, which again implicates the “base/button” sub-assembly along with the adhesive pad, and is unrelated to the “cartridge sub-assembly”. As such, we find that the “cartridge sub-assembly” is distinguishable from the uppers subject to Uniroyal in that it in no way resembles the finished product in terms of form or function. Moreover, although the assembly operations taking place in China are accomplished manually, they are not “simple” given the number of components involved (as many as 30 if the “cartridge sub-assembly” is first constructed in the United States) and because the assembly operations result in a new and different article of commerce. Accordingly, we find that the component materials are substantially transformed by the assembly operations taking place in China, thus causing the V-Go™ to be a product thereof. Marking requirements for the V-Go™ and EZ-Fill devices: In terms of marking the V-Go™ and EZ-Fill devices, the country of origin marking should be located on the article or its container and is considered to be conspicuous if the ultimate purchaser in the United States is able to find the marking easily and read it without strain. See 19 CFR §134.41(b). As both products are of Chinese origin, this country of origin marking requirement applies whether they are imported together or separately. We note that the packaging for both the V-Go™ and the EZ-Fill samples features a U.S. address. Title 19 C.F.R. §134.46, provides the following: In any case in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or location in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced appear on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin of the article, there shall appear legibly and permanently in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning. To satisfy the close proximity requirement articulated in §134.46, the country of origin marking generally must appear on the same side(s) or surface(s) in which the name or locality other than the actual country of origin appears. See HQ 562832, dated October 10, 2003; HQ 73416, dated September 23, 1991 (holding that country of origin marking of a book must be on each side or surface containing a non-origin reference). HOLDING: In the instant case, we find that the country of origin of the final assembled V-Go™ device and the EZ-Fill, as imported, are products of China. The devices or their packaging should be marked as products of China in a manner that satisfies the close proximity requirement, so that the country of origin marking appears on the same side(s) or surface(s) in which the name or locality other than the actual country of origin appears. 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 CBP officer handling the transaction. Sincerely, Monika R. Brenner, Chief Valuation and Special Programs Branch