Notice2025-09320
Notice of Issuance of Final Determination Concerning Biomedix Selec-3 Multiple Drop Intravenous Product
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Published
May 23, 2025
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border Protection
Abstract
This document provides notice that U.S. Customs and Border Protection (CBP) has issued a final determination concerning the country of origin of the Biomedix Selec-3 Multiple Drop Intravenous Product. Based upon the facts presented, CBP has concluded that the subject IV products, under two of five scenarios, would be the product of a foreign country or instrumentality designated pursuant to title III of the Trade Agreements Act of 1979, as amended; in three of the scenarios, the last substantial transformation occurs in the United States.
Full Text
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<title>Federal Register, Volume 90 Issue 99 (Friday, May 23, 2025)</title>
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[Federal Register Volume 90, Number 99 (Friday, May 23, 2025)]
[Notices]
[Pages 22102-22105]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-09320]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning Biomedix
Selec-3 Multiple Drop Intravenous Product
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 the Biomedix Selec-3 Multiple Drop Intravenous
Product. Based upon the facts presented, CBP has concluded that the
subject IV products, under two of five scenarios, would be the product
of a foreign country or instrumentality designated pursuant to title
III of the Trade Agreements Act of 1979, as amended; in three of the
scenarios, the last substantial transformation occurs in the United
States.
DATES: The final determination was issued on May 13, 2025. 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 no later than June 23, 2025.
FOR FURTHER INFORMATION CONTACT: Ani Mard, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at (202)
325-0727.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on May 13, 2025,
U.S. Customs and Border Protection (CBP) issued a final determination
concerning the country of origin of the Biomedix Selec-3 Multiple Drop
Intravenous Product, for purposes of title III of the Trade Agreements
Act of 1979. This final determination, HQ H339462, was issued at the
request of Wai Medical Technologies LLC, under procedures set
[[Page 22103]]
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 has concluded that, based upon the facts
presented, the country of origin of the IV products is the country in
which the selectable drop chamber (``SDC'') originates.
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.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H339462
May 13, 2025
OT:RR:CTF:VS H339462 AM
Category: Origin
Dave Townsend, Dorsey & Whitney LLP, 50 South Sixth Street Suit
1500, Minneapolis, Minnesota 55402
Re: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country
of Origin of IV Drips
Dear Mr. Townsend:
This is in response to your request, dated May 16, 2024, on
behalf of your client, Wai Medical Technologies (``Wai Medical'')
and its affiliate MedSource International LLC (``MedSource''), for a
final determination concerning the country of origin of the Biomedix
Selec-3 Multiple Drop Intravenous Product (``Selec-3 IV Product''),
pursuant to Title III of the Trade Agreements Act of 1979 (``TAA''),
as amended (19 U.S.C. 2511 et seq.), and subpart B of Part 177, U.S.
Customs and Border Protection (``CBP'') Regulations (19 CFR 177.21,
et seq.). Your request, submitted as an electronic ruling request,
was forwarded to this office from the National Commodity Specialist
Division (``NCSD''). Wai Medical is a party-at-interest within the
meaning of 19 CFR 177.22(d)(1) and 177.23(a) and is therefore
entitled to request this final determination.
Facts
The merchandise at issue is the Selec-3 IV Product. The Selec-3
IV Product is an intravenous set made with components from a variety
of U.S. and non-U.S. components. The Selec-3 IV Product has a
patented selectable drop chamber (``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. By allowing the
user to quickly and easily change the drip rate, the Selec-3 IV
Product saves time, reduces inventory costs, and minimizes the risk
of contamination of fluids administered to patients.
The Selec-3 IV Product has the following components:
<bullet> Check valve and connector: allows opening and closing
the polyvinyl chloride (``PVC'') tube for purposes of helping
regulate flow of the fluid and allows control of fluid from either
the Drop Chamber or one of the Y-sites.
<bullet> Dust cap: placed on the end of the Selec-3 IV Product
to ensure the end remains uncontaminated prior to use.
<bullet> Pinch Clamp (x2): The pinch clamps can be used to stop
and start the flow of liquid through the tubing and to the patient.
<bullet> PVC Tube (73 Inches): The PVC tube allows the fluid to
flow from the bag containing the fluid, through the SDC, and
ultimately to the patient.
<bullet> Roller Clamp: The clamp is a binary control allowing or
disallowing flow of fluid into the SDC, and thus to the patient.
<bullet> SDC: The SDC is a clear plastic tube with a mechanism
allowing the user to select one of three drop rates. The SDC is
patented and allows unwanted gas to bubble out of the fluid,
allowing medical staff to see that fluid is flowing through the IV,
and allowing regulation of the flow rate through the patented
adjustable SDC.
<bullet> Spike and Cap: The spike is used to connect the Selec-3
IV Product to the fluid being administered to the patient. The spike
is inserted into the bag holding the fluid. The cap is used to
ensure the spike is not contaminated prior to use.
<bullet> Spin Lock: The spin lock allows connection between a
device allowing the direct infusion of the fluids into the patient
to the Selec-3 IV Product.
<bullet> Y-Sites (x3): The Y-sites allow the injection of
additional treatments or medicines to be administered to the
patient, in addition to the fluid connected to the Selec-3 IV
Product that runs through the SDC and tubing to the patient.
Assembly of the Selec-3 IV Product involves three steps: (1)
assembly of the SDC subassembly with the roller clamp and spike, (2)
the assembly of the other tubing sub-assemblies, and (3) the final
assembly.
(1) Assembly of the SDC
Assembly of the SDC involves connecting, gluing, and sealing the
parts of the SDC,
including the tubing and the roller clamp and spike. The plastic
tubing is inspected and the tube to the drip-rate selector is
aligned and glued. Then, the drop chamber is inspected and cured
with ultraviolet light to bind them together. The assembler must
apply silicone to the selector, sealing the selector, and adding the
selector top. Lastly, the chamber is connected to a short piece of
tubing that ends with a roller clamp and spike. The total cost of
the SDC sub-assembly components is roughly less than half of the
total cost of the Selec-3 IV Product.
(2) Assembly of the Other Tubing Sub-Assemblies
The premanufactured parts are inspected for defects. Assembly
continues with three sections of tubing, i.e., the primary tubing,
the patient side assembly (top half), and the extension set (bottom
half). To assemble each of those three sections, tubing is connected
to luers and Y-sites.
(3) Final Assembly
During the final assembly process, the primary tubing, the
patient side assembly, and the extension set are put together with
the SDC sub-assembly, and the Selec-3 IV Product is complete.
Adhesives are added to ensure lasting connection between certain
parts.
Set forth below are several sourcing scenarios for components
that Wai Medical is contemplating. Wai Medical requests that CBP
issue a determination covering all five scenarios below.
Scenario 1: All of the Selec-3 IV Product components originate
from the United States, are sterilized in the United States, and
then are assembled in India prior to being re-imported, and fully
assembled in the United States.
Scenario 2: The SDC originates from the United States and is
assembled into the SDC sub-assembly (including the roller clamp and
spike) in the United States. The remaining components originate, are
sterilized, and assembled in India. The final assembly takes place
in India.
Scenario 3: The SDC originates from the United States. The SDC
sub-assembly takes place in India. Additionally, remaining
components originate, are sterilized, and assembled in India. The
final assembly takes place in India.
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.
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.
Issue
What is the country of origin of the Biomedix Selec-3 Multiple
Drop Intravenous Product for purposes of U.S. Government
procurement?
Law & 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 purpose 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 CFR 177.21 et seq., which
implements Title III, Trade Agreements Act of 1979, as amended (19
U.S.C. 2511-2518).
CBP's authority to issue advisory rulings and final
determinations is set forth in 19 U.S.C. 2515(b)(1), which states:
For the purposes of this subchapter, the Secretary of the
Treasury shall provide for the prompt issuance of advisory rulings
and final determinations on whether, under section 2518(4)(B) of
this title, an article is or would be a product of a foreign country
or instrumentality designated pursuant to section 2511(b) of this
title.
Emphasis added.
[[Page 22104]]
The Secretary of the Treasury's authority mentioned above, along
with other customs revenue functions, are delegated to the Secretary
of Homeland Security via Treasury Department Order (TO) 100-20
``Delegation of Customs revenue functions to Homeland Security,''
dated October 30, 2024, and are subject to further delegations to
CBP (see also 19 CFR part 177, subpart B).
The rule of origin set forth in 19 U.S.C. 2518(4)(B) states:
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 CFR 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 Acquisition
Regulation (``FAR''). See 19 CFR 177.21. In this regard, CBP
recognizes that the FAR restricts the U.S. Government's purchase of
products to U.S.-made or designated country end products for
acquisitions subject to the TAA. See 48 CFR 25.403(c)(1).
The FAR, 48 CFR 25.003, defines ``U.S.-made end product'' as:
. . . an article that is mined, produced, or manufactured in the
United States or that is substantially transformed in the United
States 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.
Additionally, the FAR, 48 CFR 25.003, defines ``designated
country end product'' as:
a 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.
Section 25.003 defines ``WTO GPA country end product'' 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.
Once again, we note that the Selec-3 IV components are sourced
from both the United States, TAA-designated countries (i.e.,
Mexico), as well as non-TAA countries (i.e., China, Vietnam, and
Malaysia).
In order to determine whether a substantial transformation
occurs when components of various origins are assembled into
completed products, CBP considers the totality of the circumstances
and makes such determinations on a case-by-case basis. The country
of origin of the item's components, extent of the processing that
occurs within a country, and whether such processing renders a
product with a new name, character, and use are primary
considerations in such cases. Additionally, factors such as the
resources expended on product design and development, the extent and
nature of post-assembly inspection and testing procedures, and
worker skill required during the actual manufacturing process will
be considered when determining whether a substantial transformation
has occurred. No one factor is determinative.
Assembly operations that are minimal or simple, as opposed to
complex or meaningful, will generally not result in a substantial
transformation. Factors which may be relevant in this evaluation
include the nature of the operation (including the number of
components assembled), the number of different operations involved,
and whether a significant period of time, skill, detail, and quality
control are necessary for the assembly operation. See C.S.D. 80-111,
C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D.
90-97. If the manufacturing or combining process is a minor one,
which leaves the identity of the article intact, a substantial
transformation has not occurred. See Uniroyal, Inc. v. United
States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022
(Fed. Cir. 1983) (imported shoe uppers added to an outer sole in the
United States were the ``very essence of the finished shoe'' and the
character of the product remained unchanged and did not undergo
substantial transformation in the United States).
The U.S. Court of International Trade (``CIT'') more recently
interpreted the meaning of ``substantial transformation'' in
Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308
(2016). Energizer involved the determination of the country of
origin of a flashlight, referred to as the Generation II flashlight.
All the components of the flashlight were of Chinese origin, except
for a white LED and a hydrogen getter. The components were imported
into the United States and assembled into the finished Generation II
flashlight. The Energizer court reviewed the ``name, character and
use'' test utilized in determining whether a substantial
transformation had occurred and noted, citing Uniroyal, Inc., 3 CIT
at 226, 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.
In reaching its decision, the Energizer court expressed the
question as one of 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 predetermined 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 into a finished Generation
II flashlight. Virtually all of the components of the Generation II
flashlight, including the most important component, the LED, were of
Chinese origin. Accordingly, the court determined that China was the
correct country of origin of the Generation II flashlights for
purposes of government procurement.
In Headquarters Ruling Letter (``HQ'') 734617, dated August 17,
1993, CBP considered an IV device for administering fluid and found
that the foreign-made tubing assembly with the U.S.-assembled
patented pump system in California resulted in a substantial
transformation and determined the United States to be the country of
origin. The U.S.-assembled patented pump system performed the
product's most important function, i.e., to regulate and ensure that
the proper amount of intravenous medication gets to the patient.
Notably, more than 75 percent of the value of the finished article
was attributable to the U.S. operations.
Additionally, in HQ 734006, dated March 25, 1991, CBP held that
U.S.-origin components of a medical device used to administer liquid
nutritional preparations are not substantially transformed by
assembly in Mexico. The value added in Mexico accounted for less
than 10 percent of the direct cost of manufacturing the subject
merchandise, and it contained no materials of Mexican origin.
Accordingly, CBP determined there was no change in the name,
character, or use of the assembled components as this process
constituted a simple assembly.
In HQ 560613, dated October 28, 1997, CBP held that U.S.-origin
components were not substantially transformed in Ireland when made
into a pregnancy test kit. The test kit was made from the following
U.S. components: top and bottom housing, paper, antibody, wick,
laminate, and nitrocellulose. In addition, a splash guard from
Ireland and rayon from Germany were used. The critical components of
the pregnancy test kit were found to be the three U.S.-origin
antibodies. CBP recognized that the U.S.-origin components imparted
the essential character of the pregnancy test kit and that the
simple assembly of placing the antibodies onto the rayon membrane,
and subsequent assembly of the strips into a plastic housing did not
result in a substantial transformation. Lastly, in HQ H035441, dated
September 11, 2008, CBP found that the assembly and sterilization
processes performed in Costa Rica to create the LAP-BAND[supreg]
SYSTEM AP II were relatively simple and, therefore, the
[[Page 22105]]
operations did not result in a substantial transformation of the
components. See also HQ 561167, dated December 14, 1998.
In the case at hand, the SDC is patent-protected, and we find
that it 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. Importantly, the SDC sub-assembly
consisting of the SDC plus the roller clamp and the spike represents
the single most significant portion of the cost of materials of the
Selec-3 IV Product. Here, similar to HQ 734617, the SDC imparts the
essential character of the Selec-3 IV product because it serves the
product's most important function. Additionally, sterilization only
represents a small portion of the total cost of production of the
subject merchandise. Consistent with HQ H035441, we find that the
sterilization process should not result in substantial
transformation.
Based on the information presented, we find that in Scenarios
One, Two, and Three, the last substantial transformation occurs in
the United States and therefore, the Selec-3 IV Product is not a
product of a foreign country or instrumentality designated pursuant
to 2511(b) of this title (i.e., China, Vietnam, and Malaysia). As to
whether the Selec-3 IV Product produced in the United States
qualifies as a ``U.S.-made end product'' under Scenarios One, Two,
and Three, you may wish to consult with the relevant government
procuring agency and review Acetris Health, LLC v. United States,
949 F.3d 719 (Fed. Cir. 2020). Furthermore, we find that the country
of origin of the Selec-3 IV Product in Scenarios Four and Five is
Mexico and, therefore is a product of a foreign country or
instrumentality designated pursuant to 2511(b) of this title.
Holding
Based on the information presented, we find that in Scenarios
One, Two, and Three, the last substantial transformation of the
Biomedix Selec-3 Multiple Drop Intravenous Product occurs in the
United States. Furthermore, we find that the country of origin in
Scenarios Four and Five is Mexico.
Notice of this final determination will be given in the Federal
Register, as required by 19 CFR 177.29. Any party-at-interest other
than the party which requested this final determination may request,
pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and
issue a new final determination. Pursuant to 19 CFR 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 U.S. Court of International Trade.
Sincerely,
Alice A. Kipel,
Executive Director, Regulations & Rulings, Office of Trade.
[FR Doc. 2025-09320 Filed 5-22-25; 8:45 am]
BILLING CODE 9111-14-P
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