Notice of Issuance of Final Determination Concerning Country of Origin of Tablet Computers for Health Mobile and Hub Platforms, 40783-40786 [2017-18202]
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<![CDATA[
40783
Federal Register / Vol. 82, No. 165 / Monday, August 28, 2017 / Notices
ANNUAL BURDEN TABLE
Responses
per
respondent
Number of
respondents
Instrument/activity
Total
responses
Hours per
response
Total hour
burden
Web Surveys
1 56
SPC Web Survey .................................................................
PATH Intermediary Web Survey .........................................
PATH Provider Web Survey ................................................
1
1
1
3 500
56
28
500
1
1
1
56
28
500
1
1
1
2 28
28
14
60
1
1
1
28
14
60
25
5
25
50
10
50
50
100
2
2
1.5
2
2
2
1.5
1.5
50
10
37.5
100
20
100
75
150
1,001
........................
1,228.5
Telephone Interviews
4 28
SPC Telephone Interview ....................................................
PATH Intermediary Telephone Interview .............................
PATH Provider Telephone Interview ...................................
5 14
6 60
Site Visit Interviews
7 25
Opening Session with State Staff ........................................
SPC Session ........................................................................
State Stakeholder Session ..................................................
Opening Session with PATH Provider Staff ........................
PATH Provider PD Session .................................................
PATH Provider Direct Care Staff Session ...........................
Provider Stakeholder Session .............................................
Consumer Focus Groups .....................................................
14 100
1
1
1
1
1
1
1
1
Total ..............................................................................
1,001
........................
85
9 25
10 50
11 10
12 50
13 50
respondent × 56 SPCs = 56 respondents.
respondent × 28 Intermediaries = 28 respondents.
respondent × 500 PATH providers =500 respondents.
4 1 respondent × 28 SPCs = 28 respondents.
5 1 respondent × 14 Intermediaries = 14 respondents.
6 1 respondent × 60 PATH providers = 60 respondents.
7 5 respondents × 5 site visits = 25 respondents.
8 1 respondent × 5 site visits = 5 respondents.
9 5 respondents × 5 site visits = 25 respondents.
10 5 respondents × 10 site visits (2 providers per state) = 50 respondents.
11 1 respondent × 10 site visits (2 providers per state) = 10 respondents.
12 5 respondents × 10 site visits (2 providers per state) = 50 respondents.
13 5 respondents × 10 site visits (2 providers per state) = 50 respondents.
14 10 respondents × 10 site visits (10 Consumers per provider (2 providers per state) = 100 respondents.
11
21
asabaliauskas on DSKBBXCHB2PROD with NOTICES
31
Written comments and
recommendations concerning the
proposed collection should be sent by
DATE to the SAMHSA Desk Officer at
the Office of Information and Regulatory
Affairs, Office of Management and
Budget (OMB). To ensure timely receipt
of comments, and to avoid potential
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Commenters may also mail them to:
Office of Management and Budget,
Office of Information and Regulatory
Affairs, New Executive Office Building,
Room 10102, Washington, DC 20503.
Summer King,
Statistician.
[FR Doc. 2017–18136 Filed 8–25–17; 8:45 am]
BILLING CODE 4162–20–P
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DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs And Border Protection
Notice of Issuance of Final
Determination Concerning Country of
Origin of Tablet Computers for Health
Mobile and Hub Platforms
U.S. Customs and Border
Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
AGENCY:
This document provides
notice that U.S. Customs and Border
Protection (‘‘CBP’’) has issued a final
determination concerning the country of
origin of tablet computers known as
Vivify Health Mobile and Hub
Platforms. Based upon the facts
presented, CBP has concluded in the
final determination that for purposes of
U.S. Government procurement in the
installation of proprietary software on
tablet computer does not substantially
transform the imported tablet
computers.
SUMMARY:
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The final determination was
issued on August 22, 2017. 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 within
September 27, 2017.
DATES:
FOR FURTHER INFORMATION CONTACT:
Robert Dinerstein, Valuation and
Special Programs Branch, Regulations
and Rulings, Office of Trade (202–325–
0132).
Notice is
hereby given that on August 22, 2017,
pursuant to subpart B of Part 177,
Customs and Border Protection (CBP)
Regulations (19 CFR part 177, subpart
B), CBP issued a final determination
concerning the country of origin of
tablet computers which may be offered
to the United States Government under
an undesignated government
procurement contract. This final
determination, HQ H284523, was issued
at the request of Vivify Health Inc.
under procedures set forth at 19 CFR
part 177, subpart B, which implements
SUPPLEMENTARY INFORMATION:
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Title III of the Trade Agreements Act of
1979, as amended (19 U.S.C. 2511–18).
In the final determination, CBP was
asked to consider whether the loading of
the specialized software onto a tablet
computer that
Section 177.29, CBP Regulations (19
CFR 177.29), provides that notice of
final determinations 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.
Dated: August 22, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings,
Office of Trade.
HQ H284523
August 22, 2017
OT:RR:CTF:VS: H2854523 RSD
asabaliauskas on DSKBBXCHB2PROD with NOTICES
CATEGORY: Origin
Stuart P. Seidel, Esq.
Baker & McKenzie LLP
815 Connecticut Avenue,
Washington, DC 20006–4078
RE: U.S. Government Procurement; Title III,
Trade Agreements Act of 1979 (19 U.S.C.
§ 2511); Subpart B, Part 177, CBP
Regulations; Tablet Computers, Health
Mobile and Hub Platforms
Dear Mr. Seidel:
This is in response to your letter of March
20, 2017, on behalf of Vivify Health, Inc.
(Vivify), requesting a final determination
concerning the country origin of a product
that you refer to as a ‘‘home health mobile
platform and hub’’, pursuant to subpart B of
Part 177, U.S. Customs and Border Protection
(CBP) Regulations (19 CFR 177.21, et seq.).
Under the pertinent regulations, which
implement Title III of the Trade Agreements
Act of 1979, as amended (19 U.S.C. § 2511 et
seq.), 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. You state in your letter that
this request is being made pursuant to a letter
from the Department of Veterans Affairs (VA)
to the prime contractor, Iron Bow
Technologies, LLC (Iron Bow), requiring the
filing of a request for a substantial
transformation ruling from U.S. CBP.
As a domestic manufacturer, Vivify is a
party-at-interest within the meaning of 19
CFR 177.22(d)(1) and is entitled to request
this final determination.
FACTS:
The specific product at issue, referred to as
the Vivify Mobile Device Platform and Hub
Platform, begins as a tablet computer. The
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tablet computers are produced in Vietnam by
one of the leading tablet manufacturers. The
tablets are intended for purchase by the
Veterans Health Administration for use by
patients at home who will collect their health
data that is measured by other peripheral
devices such as blood pressure monitors,
blood glucose monitors etc. These other
devices are not imported with the tablet.
Vivify’s supplier purchases the tablets in
the United States from an authorized reseller.
In the United States, one of Vivify’s Hub
production partners partially disassembles
the case and adds a Bluetooth speaker
microphone array that was assembled in
Hong Kong, an ‘‘on-the-go’’ USB hub
manufactured in China, and the housing,
custom designed in the United States and
Israel and manufactured in California, USA
and Israel. All the above Hub Platform subcomponents are shipped to facilities in Texas
and in California for a final test fit, assembly,
configuration and, then shipped for Quality
Assurance testing in Tempe Arizona.
In order to collect the health data from
each patient/user, Vivify installs specialized
software (Vivify Health Pathways) onto the
tablet computers. According to the
information provided, the software was
developed entirely in the United States, at
Vivify’s corporate headquarters in Plano,
Texas at a cost of several million dollars
using a team of more than 30 persons. The
software enables patients to provide vital
sign data and their responses to clinical
questions. This application is installed on the
tablet to meet the VA’s requirements for
medical devices, including patient
confidentiality and interoperability with VA
systems and protocols. In addition, this
software disables the generic applications
that would be normally used on the tablets.
After the patient data is collected, it is next
forwarded to VA clinicians over the VA
intranet.
ISSUE:
Whether the imported tablets are
substantially transformed by the installation
of Vivify’s proprietary software, so as to make
them a product of the United States.
LAW AND ANALYSIS:
Pursuant to subpart B of Part 177, 19 CFR
177.21 et seq., which implements Title III of
the Trade Agreements Act of 1979, as
amended (19 U.S.C. § 2511 et seq.), 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.
Under the rule of origin set forth under 19
U.S.C. § 2518(4)(B):
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
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distinct from that of the article or articles
from which it was so transformed.
See also 19 CFR 177.22(a).
In rendering final determinations for
purposes of U.S. Government procurement,
CBP applies the provisions of subpart B of
Part 177 consistent with the Federal
Procurement Regulations. See 19 CFR 177.21.
In this regard, CBP recognizes that the
Federal Acquisition Regulations restrict the
U.S. Government’s purchase of products to
U.S.-made or designated country end
products for acquisitions subject to the Trade
Agreements Act. See 48 CFR 25.403(c)(1).
The Federal Acquisition Regulations define
‘‘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 name,
character, or use distinct from that of the
article or articles from which it was
transformed.’’ See 48 CFR 25.003.
‘‘The term ‘character’ is defined as ‘one of
the essentials of structure, form, materials, or
function that together make up and usually
distinguish the individual.’’’ Uniden America
Corporation v. United States, 120 F. Supp.
2d. 1091, 1096 (citations omitted) (Ct. Int’l
Trade 2000), citing National Hand Tool Corp.
v. United States, 16 Ct. Int’l Trade 308, 311
(1992). In Uniden, concerning whether the
assembly of cordless telephones and the
installation of their detachable A/C
(alternating current) adapters constituted
instances of substantial transformation, the
Court of International Trade applied the
‘‘essence test’’ and found that ‘‘[t]he essence
of the telephone is housed in the base and
the handset.’’
In Data General v. United States, 4 Ct. Int’l
Trade 182 (1982), the court determined that
for purposes of determining eligibility under
item 807.00, Tariff Schedules of the United
States (predecessor to subheading
9802.00.80, Harmonized Tariff Schedule of
the United States), the programming of a
foreign PROM (Programmable Read-Only
Memory chip) in the United States
substantially transformed the PROM into a
U.S. article. In programming the imported
PROMs, the U.S. engineers systematically
caused various distinct electronic
interconnections to be formed within each
integrated circuit. The programming
bestowed upon each circuit its electronic
function, that is, its ‘‘memory’’ which could
be retrieved. A distinct physical change was
effected in the PROM by the opening or
closing of the fuses, depending on the
method of programming. This physical
alteration, not visible to the naked eye, could
be discerned by electronic testing of the
PROM. The court noted that the programs
were designed by a U.S. project engineer
with many years of experience in ‘‘designing
and building hardware.’’ In addition, the
court noted that while replicating the
program pattern from a ‘‘master’’ PROM may
be a quick one-step process, the development
of the pattern and the production of the
‘‘master’’ PROM required much time and
expertise. The court noted that it was
undisputed that programming altered the
character of a PROM. The essence of the
article, its interconnections or stored
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memory, was established by programming.
The court concluded that altering the nonfunctioning circuitry comprising a PROM
through technological expertise in order to
produce a functioning read only memory
device, possessing a desired distinctive
circuit pattern, was no less a ‘‘substantial
transformation’’ than the manual
interconnection of transistors, resistors and
diodes upon a circuit board creating a similar
pattern.
In Texas Instruments v. United States, 681
F.2d 778, 782 (CCPA 1982), the court
observed that the substantial transformation
issue is a ‘‘mixed question of technology and
customs law.’’ Accordingly, the programming
of a device that confers its identity as well
as defines its use generally constitutes a
substantial transformation. See also
Headquarters Ruling Letter (‘‘HQ’’) 558868,
dated February 23, 1995 (programming of
SecureID Card substantially transforms the
card because it gives the card its character
and use as part of a security system, and the
programming is a permanent change that
cannot be undone); HQ 735027, dated
September 7, 1993 (programming blank
media (EEPROM) with instructions that
allow it to perform certain functions that
prevent piracy of software constitutes a
substantial transformation); and, HQ 733085,
dated July 13, 1990; but see HQ 732870,
dated March 19, 1990 (formatting a blank
diskette does not constitute a substantial
transformation because it does not add value,
does not involve complex or highly technical
operations, and does not create a new or
different product); and, HQ 734518, dated
June 28, 1993 (motherboards are not
substantially transformed by the implanting
of the central processing unit on the board
because, whereas in Data General use was
being assigned to the PROM, the use of the
motherboard has already been determined
when the importer imported it).
HQ H258960, dated May 19, 2016,
reviewed the country of origin of hardware
components of certain transceivers in two
scenarios that are instructive to the case at
issue here. The hardware components of the
transceivers were wholly manufactured in a
foreign country and imported into the United
States. In the first scenario, the transceivers
were ‘‘blanks’’ and were completely nonfunctional and specialized proprietary
software was developed and downloaded in
the United States, making the transceivers
functional and compatible with the OEM
technology. In the second scenario, the
transceivers were preprogrammed with a
generic program that was replaced with the
specialized proprietary software. It was
argued that in both scenarios, the imported
hardware was substantially transformed by
the development, configuration, and
downloading operations of the United States
origin software. As in this case, the expenses
for the work performed in the United States
were noted to far outweigh the work
performed abroad. In the first scenario, we
found that the non-functional transceivers
were substantially transformed as a result of
downloading performed in the United States,
with proprietary software developed in the
United States. However, in the second
scenario, it was determined that since the
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transceivers had generic network
functionality, programming them merely to
customize their network compatibility would
not actually change the identity of the
imported transceivers. See also HQ H241177
supra. Accordingly, it was determined that
the country where the last substantial
transformation occurred was China or
another Asian country where the hardware
components were manufactured.
In this case, you contend that the software
downloading operations performed in the
United States transform the generic tablet
computers into medical devices. You further
explain that the cost of writing the software
programming far outweighs the cost of the
imported generic tablets. You emphasize that
the U.S. operations disable the Android
applications and install health monitoring
software that cannot be undone by third
parties during the normal course of
operations. Therefore, you contend that this
operation changes the classification of the
tablet from Heading 8471 of the Harmonized
Tariff Schedule of the United States (HTSUS)
to a medical device of Heading 9018, HTSUS.
In essence, what is being done by the
installation of the software in the United
States, is to limit the original capacity of the
imported tablets for the purpose of
facilitating the reception, collection and
transmission of a patient’s medical data to
VA clinicians for their review. The original
tablet has the ability to perform these
functions, but it was determined that for ease
of use and for other reasons it is best to
disable these functions and to consolidate
them in one function via the specialized
software. It is stated that the general
functionality of the tablet is removed and
replaced so that it is easier for patients to use
the device and access the system. It is also
stated that the security of the patient’s
medical data will be better protected.
It is clear that loading the specialized
software onto the tablet computer that
remains fully functional as a computer would
be insufficient to constitute a new and
different article of commerce, since all of the
functionality of the original computer would
be retained. In this case, however, in addition
to the addition of the software, we are being
asked to consider the effect of disabling the
general applications that have been
programmed onto the tablet. In our judgment,
this added factor does not cause or require
a different result. The functions of the
original tablet produced in Vietnam that are
necessary to receive and transmit data are in
essence still present on the modified tablet,
as aided by the software. While the tablet is
no longer a freely programmable machine, we
find the imposition of this limitation is
insufficient to constitute a substantial
transformation of the imported tablets.
Furthermore, we note that the converted
tablets loaded with the Vivify Pathway
Software do not actually measure any health
related functions, such as blood pressure, or
oxygen saturation levels, nor do they provide
any medical treatment to patients. Instead,
the converted tablets function to receive
medical data that is obtained from other
peripheral devices, such as a blood pressure
cuff or an oxygen sensor, and to transmit that
medical data to a clinician for review.
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40785
Therefore, it appears that after the
proprietary software is downloaded onto the
tablets, they function basically as a type of
communications device.
It is also claimed that the FDA considers
the Mobile Device Platform and the Hub
Platform to be medical devices, and thus
counsel contends that CBP should also
consider the tablets loaded with the Vivify
software to be medical devices rather than
tablets. We note, however, that FDA’s
determinations on whether any items are
considered medical devices are based upon
different criteria from what CBP must apply
in determining the country of origin of a
product using the substantial transformation
test. In HQ H019436, dated March 17, 2008,
CBP considered the tariff classification of a
SONA Sleep Apnea Avoidance Pillow
(pillow), imported from China. The ruling
noted that while the subject merchandise was
considered a Class II therapeutic cervical
pillow for snoring and mild sleep apnea by
the FDA, this determination, did not control
the tariff classification. Similarly in this case,
the FDA’s determination that the imported
tablets are medical devices is of limited
relevance to CBP’s determination as to the
country of origin of the devices.
In reviewing the processing performed in
the United States on the imported tablets
under consideration, we note that it is
analogous to the situation of the transceivers
described by the second scenario of HQ
H258960. The imported tablets are
preprogrammed with a generic program,
which is the standard android operating
system, prior to their importation. When they
are first imported, the tablets can perform all
of the standard functions of an android
tablet, and could in their imported condition
be used in conjunction with the proprietary
software, but are customized for use.
Accordingly, like the transceivers described
in the second scenario of HQ H258960, we
find that the name, character, and use of the
imported tablet computers remain the same.
Therefore, we further find that the imported
tablets are not substantially transformed in
the United States by the downloading of the
proprietary software, which allows them to
function with the VA Healthcare network.
After the Vivify Health Pathways software is
downloaded, the country of origin of the
imported tablets remains the country where
they were originally manufactured, which in
this case is Vietnam.
HOLDING:
Based on the facts of this case, the
imported tablets used with Home Health Hub
platform are not substantially transformed by
the installation of the proprietary Vivify
Health Pathways software. Therefore, the
country of origin of the tablets will remain
the country where they were originally
manufactured.
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-atinterest may, within 30 days of publication
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of the Federal Register Notice referenced
above, seek judicial review of this final
determination before the Court of
International Trade.
Sincerely,
Alice A. Kipel,
Executive Director Regulations and Rulings,
Office of Trade.
[FR Doc. 2017–18202 Filed 8–25–17; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final
Determinations Concerning Certain
Pharmaceutical Products
U.S. Customs and Border
Protection, Department of Homeland
Security.
ACTION: Notice of final determinations.
AGENCY:
This document provides
notice that U.S. Customs and Border
Protection (‘‘CBP’’) has issued six final
determinations concerning the country
of origin of certain pharmaceutical
products produced by Lupin
Pharmaceuticals, Inc. Based upon the
facts presented, CBP has concluded that
the country of origin of the meloxicam
tablets is Italy for purposes of U.S.
Government procurement, that the
country of origin of the bimatoprost
ophthalmic solution is Taiwan for
purposes of U.S. Government
procurement, that the country of origin
of the niacin ER tablets is Belgium or
Switzerland for purposes of U.S.
Government procurement, that the
country of origin of the calcium acetate
capsules is the Netherlands for purposes
of U.S. Government procurement, that
the country of origin of the quinine
sulfate capsules is Germany for
purposes of U.S. Government
procurement, and that the country of
origin of the pravastatin sodium tablets
is Taiwan for purposes of U.S.
Government procurement.
DATES: These final determinations were
issued on August 22, 2017. Copies of the
final determinations are attached. Any
party-at-interest, as defined in 19 CFR
177.22(d), may seek judicial review of
these final determinations within
September 27, 2017.
FOR FURTHER INFORMATION CONTACT: Ross
M. Cunningham, Valuation and Special
Programs Branch, Regulations and
Rulings, Office of Trade, (202) 325–
0034.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on August 22, 2017
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SUMMARY:
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pursuant to subpart B of Part 177, U.S.
Customs and Border Protection
Regulations (19 CFR part 177, subpart
B), CBP issued six final determinations
concerning the country of origin of
certain pharmaceutical products, which
may be offered to the U.S. Government
under an undesignated government
procurement contract. These final
determinations (HQ H284690, HQ
H284961, HQ H284692, HQ H284694,
HQ H284695, and HQ H284697), were
issued under procedures set 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
determinations, CBP concluded that the
processing in India does not result in a
substantial transformation. Therefore,
the country of origin for purposes of
U.S. Government procurement of the
pharmaceutical products is the country
in which the active pharmaceutical
ingredient was produced.
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.
Dated: August 22, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings,
Office of Trade.
ATTACHMENT A
HQ H284690
August 22, 20917
OT:RR:CTF:VS H284690 RMC
CATEGORY: Origin
Kevin J. Maynard
Wiley Rein LLP
1776 K St. NW
Washington, DC 20006
Re: U.S. Government Procurement; Country
of Origin of Meloxicam Tablets;
Substantial Transformation
Dear Mr. Maynard:
This is in response to your letter, dated
March 20, 2017, requesting a final
determination on behalf of Lupin
Pharmaceuticals, Inc. (‘‘Lupin’’) pursuant to
subpart B of Part 177 of the U.S. Customs and
Border Protection (‘‘CBP’’) Regulations (19
CFR Part 177). Under these regulations,
which implement Title III of the Trade
Agreements Act of 1979 (‘‘TAA’’), as
amended (19 U.S.C. § 2511 et seq.), CBP
issues country of origin advisory rulings and
final determinations as to whether an article
is or would be a product of a designated
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country or instrumentality for the purposes
of granting waivers of certain ‘‘Buy
American’’ restrictions in U.S. law or for
products offered for sale to the U.S.
Government. This final determination
concerns the country of origin of meloxicam
tablets. As a U.S. importer, Lupin is a partyat-interest within the meaning of 19 CFR
177.22(d)(1) and is entitled to request this
final determination.
You have asked that certain information
submitted in connection with this ruling
request be treated as confidential. Inasmuch
as this request conforms to the requirements
of 19 CFR 177.2(b)(7), the request for
confidentiality is approved. The information
contained within brackets and all
attachments to this ruling request, forwarded
to our office, will not be released to the
public and will be withheld from published
versions of this ruling.
FACTS:
Lupin is a subsidiary of Lupin Limited, one
of the five largest pharmaceutical companies
in India. At issue in this case are meloxicam
tablets, in doses of 7.5 milligrams and 15
milligrams, which you describe as
‘‘nonsteroidal anti-inflammator[ies] used for
the relief of the signs and symptoms of
rheumatoid arthritis and osteoarthritis.’’
The manufacturing process for Lupin’s
meloxicam tablets begins in Italy, where the
active pharmaceutical ingredient (‘‘API’’)
meloxicam (chemical formula
C14H13N3O4S2) is produced. You state that
the Italian meloxicam is the only active
ingredient in the finished pharmaceutical
product. However, the finished product
contains a number of other inactive
ingredients, which you describe as
excipients. These ingredients are combined
with the Italian API in India during the
manufacturing process. The ingredients
include the following chemicals, which you
note are products of TAA-eligible countries:
• [
]
• [
]
• [
]
• [
]
• [
]
• [
]
• [
]
The manufacturing process in India
involves four steps. First, the API and
inactive ingredients are sifted and blended.
Second, the materials are granulated, and the
wet granulates are then sieved and dried.
Third, the product is compressed into tablets.
Finally, in the fourth step, the finished
tablets are packaged into approved
packaging.
You state that the processes performed to
produce the finished meloxicam tablets do
not result in any change to the chemical
characteristics of the Italian API or to any
other ingredients. You also state that the
medicinal use, molecular formula, and
solubility of the API are unchanged by the
manufacturing operations in India. In short,
you characterize the Indian operations as
mere processing of bulk API into 7.5
milligram and 15 milligram dosage form.
E:\FR\FM\28AUN1.SGM
28AUN1
]]>Agencies
[Federal Register Volume 82, Number 165 (Monday, August 28, 2017)]
[Notices]
[Pages 40783-40786]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18202]
=======================================================================
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs And Border Protection
Notice of Issuance of Final Determination Concerning Country of
Origin of Tablet Computers for Health Mobile and Hub Platforms
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
-----------------------------------------------------------------------
SUMMARY: This document provides notice that U.S. Customs and Border
Protection (``CBP'') has issued a final determination concerning the
country of origin of tablet computers known as Vivify Health Mobile and
Hub Platforms. Based upon the facts presented, CBP has concluded in the
final determination that for purposes of U.S. Government procurement in
the installation of proprietary software on tablet computer does not
substantially transform the imported tablet computers.
DATES: The final determination was issued on August 22, 2017. 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 within September 27, 2017.
FOR FURTHER INFORMATION CONTACT: Robert Dinerstein, Valuation and
Special Programs Branch, Regulations and Rulings, Office of Trade (202-
325-0132).
SUPPLEMENTARY INFORMATION: Notice is hereby given that on August 22,
2017, pursuant to subpart B of Part 177, Customs and Border Protection
(CBP) Regulations (19 CFR part 177, subpart B), CBP issued a final
determination concerning the country of origin of tablet computers
which may be offered to the United States Government under an
undesignated government procurement contract. This final determination,
HQ H284523, was issued at the request of Vivify Health Inc. under
procedures set forth at 19 CFR part 177, subpart B, which implements
[[Page 40784]]
Title III of the Trade Agreements Act of 1979, as amended (19 U.S.C.
2511-18). In the final determination, CBP was asked to consider whether
the loading of the specialized software onto a tablet computer that
Section 177.29, CBP Regulations (19 CFR 177.29), provides that
notice of final determinations 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.
Dated: August 22, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H284523
August 22, 2017
OT:RR:CTF:VS: H2854523 RSD
CATEGORY: Origin
Stuart P. Seidel, Esq.
Baker & McKenzie LLP
815 Connecticut Avenue,
Washington, DC 20006-4078
RE: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. Sec. 2511); Subpart B, Part 177, CBP Regulations;
Tablet Computers, Health Mobile and Hub Platforms
Dear Mr. Seidel:
This is in response to your letter of March 20, 2017, on behalf
of Vivify Health, Inc. (Vivify), requesting a final determination
concerning the country origin of a product that you refer to as a
``home health mobile platform and hub'', pursuant to subpart B of
Part 177, U.S. Customs and Border Protection (CBP) Regulations (19
CFR 177.21, et seq.). Under the pertinent regulations, which
implement Title III of the Trade Agreements Act of 1979, as amended
(19 U.S.C. Sec. 2511 et seq.), 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. You state in your letter that this request
is being made pursuant to a letter from the Department of Veterans
Affairs (VA) to the prime contractor, Iron Bow Technologies, LLC
(Iron Bow), requiring the filing of a request for a substantial
transformation ruling from U.S. CBP.
As a domestic manufacturer, Vivify is a party-at-interest within
the meaning of 19 CFR 177.22(d)(1) and is entitled to request this
final determination.
FACTS:
The specific product at issue, referred to as the Vivify Mobile
Device Platform and Hub Platform, begins as a tablet computer. The
tablet computers are produced in Vietnam by one of the leading
tablet manufacturers. The tablets are intended for purchase by the
Veterans Health Administration for use by patients at home who will
collect their health data that is measured by other peripheral
devices such as blood pressure monitors, blood glucose monitors etc.
These other devices are not imported with the tablet.
Vivify's supplier purchases the tablets in the United States
from an authorized reseller. In the United States, one of Vivify's
Hub production partners partially disassembles the case and adds a
Bluetooth speaker microphone array that was assembled in Hong Kong,
an ``on-the-go'' USB hub manufactured in China, and the housing,
custom designed in the United States and Israel and manufactured in
California, USA and Israel. All the above Hub Platform sub-
components are shipped to facilities in Texas and in California for
a final test fit, assembly, configuration and, then shipped for
Quality Assurance testing in Tempe Arizona.
In order to collect the health data from each patient/user,
Vivify installs specialized software (Vivify Health Pathways) onto
the tablet computers. According to the information provided, the
software was developed entirely in the United States, at Vivify's
corporate headquarters in Plano, Texas at a cost of several million
dollars using a team of more than 30 persons. The software enables
patients to provide vital sign data and their responses to clinical
questions. This application is installed on the tablet to meet the
VA's requirements for medical devices, including patient
confidentiality and interoperability with VA systems and protocols.
In addition, this software disables the generic applications that
would be normally used on the tablets. After the patient data is
collected, it is next forwarded to VA clinicians over the VA
intranet.
ISSUE:
Whether the imported tablets are substantially transformed by
the installation of Vivify's proprietary software, so as to make
them a product of the United States.
LAW AND ANALYSIS:
Pursuant to subpart B of Part 177, 19 CFR 177.21 et seq., which
implements Title III of the Trade Agreements Act of 1979, as amended
(19 U.S.C. Sec. 2511 et seq.), 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.
Under the rule of origin set forth under 19 U.S.C. Sec.
2518(4)(B):
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 final determinations for purposes of U.S.
Government procurement, CBP applies the provisions of subpart B of
Part 177 consistent with the Federal Procurement Regulations. See 19
CFR 177.21. In this regard, CBP recognizes that the Federal
Acquisition Regulations restrict the U.S. Government's purchase of
products to U.S.-made or designated country end products for
acquisitions subject to the Trade Agreements Act. See 48 CFR
25.403(c)(1). The Federal Acquisition Regulations define ``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 name, character, or use distinct from that of the
article or articles from which it was transformed.'' See 48 CFR
25.003.
``The term `character' is defined as `one of the essentials of
structure, form, materials, or function that together make up and
usually distinguish the individual.''' Uniden America Corporation v.
United States, 120 F. Supp. 2d. 1091, 1096 (citations omitted) (Ct.
Int'l Trade 2000), citing National Hand Tool Corp. v. United States,
16 Ct. Int'l Trade 308, 311 (1992). In Uniden, concerning whether
the assembly of cordless telephones and the installation of their
detachable A/C (alternating current) adapters constituted instances
of substantial transformation, the Court of International Trade
applied the ``essence test'' and found that ``[t]he essence of the
telephone is housed in the base and the handset.''
In Data General v. United States, 4 Ct. Int'l Trade 182 (1982),
the court determined that for purposes of determining eligibility
under item 807.00, Tariff Schedules of the United States
(predecessor to subheading 9802.00.80, Harmonized Tariff Schedule of
the United States), the programming of a foreign PROM (Programmable
Read-Only Memory chip) in the United States substantially
transformed the PROM into a U.S. article. In programming the
imported PROMs, the U.S. engineers systematically caused various
distinct electronic interconnections to be formed within each
integrated circuit. The programming bestowed upon each circuit its
electronic function, that is, its ``memory'' which could be
retrieved. A distinct physical change was effected in the PROM by
the opening or closing of the fuses, depending on the method of
programming. This physical alteration, not visible to the naked eye,
could be discerned by electronic testing of the PROM. The court
noted that the programs were designed by a U.S. project engineer
with many years of experience in ``designing and building
hardware.'' In addition, the court noted that while replicating the
program pattern from a ``master'' PROM may be a quick one-step
process, the development of the pattern and the production of the
``master'' PROM required much time and expertise. The court noted
that it was undisputed that programming altered the character of a
PROM. The essence of the article, its interconnections or stored
[[Page 40785]]
memory, was established by programming. The court concluded that
altering the non-functioning circuitry comprising a PROM through
technological expertise in order to produce a functioning read only
memory device, possessing a desired distinctive circuit pattern, was
no less a ``substantial transformation'' than the manual
interconnection of transistors, resistors and diodes upon a circuit
board creating a similar pattern.
In Texas Instruments v. United States, 681 F.2d 778, 782 (CCPA
1982), the court observed that the substantial transformation issue
is a ``mixed question of technology and customs law.'' Accordingly,
the programming of a device that confers its identity as well as
defines its use generally constitutes a substantial transformation.
See also Headquarters Ruling Letter (``HQ'') 558868, dated February
23, 1995 (programming of SecureID Card substantially transforms the
card because it gives the card its character and use as part of a
security system, and the programming is a permanent change that
cannot be undone); HQ 735027, dated September 7, 1993 (programming
blank media (EEPROM) with instructions that allow it to perform
certain functions that prevent piracy of software constitutes a
substantial transformation); and, HQ 733085, dated July 13, 1990;
but see HQ 732870, dated March 19, 1990 (formatting a blank diskette
does not constitute a substantial transformation because it does not
add value, does not involve complex or highly technical operations,
and does not create a new or different product); and, HQ 734518,
dated June 28, 1993 (motherboards are not substantially transformed
by the implanting of the central processing unit on the board
because, whereas in Data General use was being assigned to the PROM,
the use of the motherboard has already been determined when the
importer imported it).
HQ H258960, dated May 19, 2016, reviewed the country of origin
of hardware components of certain transceivers in two scenarios that
are instructive to the case at issue here. The hardware components
of the transceivers were wholly manufactured in a foreign country
and imported into the United States. In the first scenario, the
transceivers were ``blanks'' and were completely non-functional and
specialized proprietary software was developed and downloaded in the
United States, making the transceivers functional and compatible
with the OEM technology. In the second scenario, the transceivers
were preprogrammed with a generic program that was replaced with the
specialized proprietary software. It was argued that in both
scenarios, the imported hardware was substantially transformed by
the development, configuration, and downloading operations of the
United States origin software. As in this case, the expenses for the
work performed in the United States were noted to far outweigh the
work performed abroad. In the first scenario, we found that the non-
functional transceivers were substantially transformed as a result
of downloading performed in the United States, with proprietary
software developed in the United States. However, in the second
scenario, it was determined that since the transceivers had generic
network functionality, programming them merely to customize their
network compatibility would not actually change the identity of the
imported transceivers. See also HQ H241177 supra. Accordingly, it
was determined that the country where the last substantial
transformation occurred was China or another Asian country where the
hardware components were manufactured.
In this case, you contend that the software downloading
operations performed in the United States transform the generic
tablet computers into medical devices. You further explain that the
cost of writing the software programming far outweighs the cost of
the imported generic tablets. You emphasize that the U.S. operations
disable the Android applications and install health monitoring
software that cannot be undone by third parties during the normal
course of operations. Therefore, you contend that this operation
changes the classification of the tablet from Heading 8471 of the
Harmonized Tariff Schedule of the United States (HTSUS) to a medical
device of Heading 9018, HTSUS.
In essence, what is being done by the installation of the
software in the United States, is to limit the original capacity of
the imported tablets for the purpose of facilitating the reception,
collection and transmission of a patient's medical data to VA
clinicians for their review. The original tablet has the ability to
perform these functions, but it was determined that for ease of use
and for other reasons it is best to disable these functions and to
consolidate them in one function via the specialized software. It is
stated that the general functionality of the tablet is removed and
replaced so that it is easier for patients to use the device and
access the system. It is also stated that the security of the
patient's medical data will be better protected.
It is clear that loading the specialized software onto the
tablet computer that remains fully functional as a computer would be
insufficient to constitute a new and different article of commerce,
since all of the functionality of the original computer would be
retained. In this case, however, in addition to the addition of the
software, we are being asked to consider the effect of disabling the
general applications that have been programmed onto the tablet. In
our judgment, this added factor does not cause or require a
different result. The functions of the original tablet produced in
Vietnam that are necessary to receive and transmit data are in
essence still present on the modified tablet, as aided by the
software. While the tablet is no longer a freely programmable
machine, we find the imposition of this limitation is insufficient
to constitute a substantial transformation of the imported tablets.
Furthermore, we note that the converted tablets loaded with the
Vivify Pathway Software do not actually measure any health related
functions, such as blood pressure, or oxygen saturation levels, nor
do they provide any medical treatment to patients. Instead, the
converted tablets function to receive medical data that is obtained
from other peripheral devices, such as a blood pressure cuff or an
oxygen sensor, and to transmit that medical data to a clinician for
review. Therefore, it appears that after the proprietary software is
downloaded onto the tablets, they function basically as a type of
communications device.
It is also claimed that the FDA considers the Mobile Device
Platform and the Hub Platform to be medical devices, and thus
counsel contends that CBP should also consider the tablets loaded
with the Vivify software to be medical devices rather than tablets.
We note, however, that FDA's determinations on whether any items are
considered medical devices are based upon different criteria from
what CBP must apply in determining the country of origin of a
product using the substantial transformation test. In HQ H019436,
dated March 17, 2008, CBP considered the tariff classification of a
SONA Sleep Apnea Avoidance Pillow (pillow), imported from China. The
ruling noted that while the subject merchandise was considered a
Class II therapeutic cervical pillow for snoring and mild sleep
apnea by the FDA, this determination, did not control the tariff
classification. Similarly in this case, the FDA's determination that
the imported tablets are medical devices is of limited relevance to
CBP's determination as to the country of origin of the devices.
In reviewing the processing performed in the United States on
the imported tablets under consideration, we note that it is
analogous to the situation of the transceivers described by the
second scenario of HQ H258960. The imported tablets are
preprogrammed with a generic program, which is the standard android
operating system, prior to their importation. When they are first
imported, the tablets can perform all of the standard functions of
an android tablet, and could in their imported condition be used in
conjunction with the proprietary software, but are customized for
use. Accordingly, like the transceivers described in the second
scenario of HQ H258960, we find that the name, character, and use of
the imported tablet computers remain the same. Therefore, we further
find that the imported tablets are not substantially transformed in
the United States by the downloading of the proprietary software,
which allows them to function with the VA Healthcare network. After
the Vivify Health Pathways software is downloaded, the country of
origin of the imported tablets remains the country where they were
originally manufactured, which in this case is Vietnam.
HOLDING:
Based on the facts of this case, the imported tablets used with
Home Health Hub platform are not substantially transformed by the
installation of the proprietary Vivify Health Pathways software.
Therefore, the country of origin of the tablets will remain the
country where they were originally manufactured.
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
[[Page 40786]]
of the Federal Register Notice referenced above, seek judicial
review of this final determination before the Court of International
Trade.
Sincerely,
Alice A. Kipel,
Executive Director Regulations and Rulings, Office of Trade.
[FR Doc. 2017-18202 Filed 8-25-17; 8:45 am]
BILLING CODE 9111-14-P
