The country of origin of Disposable Fingertip SpO2 Sensors

N336168 November 16, 2023 OT:RR:NC:N3:135 CATEGORY:  Country of Origin Lawrence Pilon Rock Trade Law LLC 134 N LaSalle Street, Suite 1800Chicago, IL 60602 RE:  The country of origin of Disposable Fingertip SpO2 Sensors Dear Mr. Pilon: In your letter dated October 26, 2023, you requested a country of origin ruling on behalf of your client, Medline Industries, LP. The subject goods are finished disposable fingertip SPO2 sensors used in medical settings.  Each SpO2 sensor consists of two light-emitting diodes (LED), a photodetector (PD), white polyethylene film, double-sided adhesive tape, single-sided adhesive tape, woven fabric, a cord, and a connector.  The SpO2 sensor works on the principle that oxygenated blood absorbs more infrared light, whereas deoxygenated blood absorbs more red light.  It works by temporarily positioning two LEDs to one side of the patient’s finger, with one LED emitting infrared light and one LED emitting red light.  A photodetector is positioned on the other side of the patient’s finger which then senses the relative amounts of infrared and red light passing through the patient’s finger.  The photodetector’s output is used to calculate the relative absorption amounts of the two different light frequencies, thereby enabling the blood oxygen percentage to be calculated. You state that the following components were manufactured in the countries indicated: LED/PD photodetector array - Japan White polyethylene film and clear double-sided adhesive tape - USA Single-sided adhesive tape - USA Woven fabric - Switzerland Cord and connector - China The design research, product development, and materials selection for these SpO2 sensors take place in Japan.  The LEDs and photodetectors are manufactured and assembled into an array in Japan.  The array is then sent to China for final assembly into the finished SpO2 sensor.  In China, the wire ends of the cord in the cord and connector assembly are tinned and then soldered to contacts on the LED/PD sensor array.  The woven fabric cover (i.e. the exterior surface that is not in contact with the patient’s finger) is then adhered to the backside of the LED/PD sensor array using adhesive tape which you state are simple manual assembly operations.  The finished SpO2 sensor is then coiled and placed in a plastic bag which is then sealed using a heat sealing machine.  The finished and packaged SpO2 sensors will then be shipped in bulk to Medline from China. The "country of origin" is defined in 19 CFR 134.1(b) as "the 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 this part." A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing.  United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993).  However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred.  Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).  Substantial transformation determinations are based on the totality of the evidence.  See Headquarters Ruling (HQ) W968434, date January 17, 2007, 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.  In Uniroyal case, the court held that an upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was “very essence of the finished shoe.” In this case, the Disposable Optical SpO2 Sensor is assembled in China using both Chinese and non-Chinese components. However, tinning and soldering of the cord and connector assembly to the LED/PD sensor array, adhering of the woven fabric to the backside of the LED/PD sensor array to form the finished product, coiling, and packing in China do not constitute a complex and meaningful operation, and therefore, do not result in a substantial transformation.  We find that the LED and PD sensor array manufactured in Japan, which constitutes the very essence of the sensor, is not substantially transformed by the processing performed in China.  Its name, character, and use remain unchanged.  Hence, the country of origin of the Disposable Optical SpO2 Sensor will be Japan for the purposes of marking and the assessment of both the normal trade relations duty rate and Section 301 duties. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request.  This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1).  This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect.  In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2.  Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, please contact National Import Specialist Fei Chen at fei.chen@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division