CBP Rules on Country of Origin for Biomedix Selec-3 Multiple Drop Intravenous Product
CBP recently ruled which country would be the country of origin for Biomedix Selec-3 Multiple Drop Intravenous Product under five different scenarios, according to a notice released by the agency May 22
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The agency ruled that the country of origin of the IV products is the country where the selectable drop chamber (SDC) originates. That could include the U.S. in certain scenarios, provided that the last substantial transformation occurs in the U.S., CBP said.
According to the ruling, HQ H339462, which has yet to be filed in the customs rulings database, Wai Medical Technologies and its affiliate MedSource International asked CBP on May 16, 2024, what should be the country of origin for the Biomedix Selec-3 Multiple Drop Intravenous Product, an intravenous set made with components from a variety of U.S. and non-U.S. components. The applicants said the product has a patented SDC that offers three drop settings. These settings allow the user to adjust the drip rate for the fluids administered via the Selec-3 IV Product.
The applicant gave CBP five possible production scenarios: (1) Scenario 1: the Selec-3 IV Product components originate from and are sterilized in the U.S., and then are assembled in India prior to being re-imported and fully assembled in the U.S.; (2) Scenario 2: The SDC originates from the U.S. and is assembled into the SDC sub assembly (including the roller clamp and spike) in the U.S., and then the remaining components originate, are sterilized and assembled in India, with India serving as the country of final assembly; (3) Scenario 3: The SDC originates from the U.S., and then the SDC sub-assembly takes place in India, while the remaining components originate, are sterilized and assembled in India, with the final occurring in India; (4) Scenario 4: The SDC originates from Mexico and all components (including SDC) are sterilized and assembled in India. All of the Selec-3 IV Product components, except the SDC, originate and are sterilized in non-TAA eligible countries. The final assembly takes place in India; and (5) Scenario 5: The SDC components originate and are assembled into the SDC sub-assembly in Mexico. All other parts of the Selec-3 IV Product originate from China. Sterilization of the entire product occurs in China. The final assembly takes place in India.
CBP reviewed similar cases and determined that, for this situation, the SDC is patent-protected and performs the most critical function of the Selec-3 IV product, i.e., regulating the drip rate of the fluid being administered to the patient. The SDC imparts the essential character of the Selec-3 IV product because it serves the product’s most important function, CBP said. Also, sterilization only represents a small portion of the total cost of production of the subject merchandise, and the sterilization process should not result in substantial transformation.
As a result, the last substantial transformation of the Biomedix Selec-3 Multiple Drop Intravenous Product occurs in the U.S. for scenarios 1, 2 and 3, while the country of origin in scenarios 4 and 5 is Mexico, CBP ruled.