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Origin of Medical Equipment Unchanged by Simple Operations Abroad, CBP Says

Wednesday, June 05, 2019
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of electroencephalogram cutaneous electrodes that may be offered to the U.S. government under undesignated government procurement contracts. Any party-at-interest may seek judicial review of this determination by July 1. 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.

The fully assembled and packaged end product consists of a cutaneous electrode, a lead wire, a miniscule amount of crimp or glue, a heat shrink tube, and packaging. The engineering and design of the electrodes takes place in the U.S. while the actual production is outsourced to a third-party subcontractor also located in the U.S.

The electrodes are shipped from the U.S. to China where a Korean-origin lead wire, which acts as an electrical conductor that transfers low-voltage electrical signals from the electrode to medical diagnostic equipment, is attached by means of a conductive adhesive glue made in Germany. A heat shrink from either the U.S. or Japan is used to cover the joint and the product is inserted into a plastic pouch and cardboard packaging.

In ruling HQ H300745, CBP affirms that for products used in medical-related applications no substantial transformation occurs when the critical components that impart the essential character of the product subsequently undergo simple assembly and processing. In this case, CBP states, the product’s main function is provided by the cutaneous electrode, and the name, character, and use of this item remain unchanged after the minor operations conducted in China. Accordingly, CBP determines that the last substantial transformation of the product is in the U.S.

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