Notice of Issuance of Final Determination Concerning Subdermal Needle Electrodes, 36947-36950 [2018-16281]
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Federal Register / Vol. 83, No. 147 / Tuesday, July 31, 2018 / Notices
14. Competitive pilotage;
15. Recuperative rest for pilots;
16. Legislative changes;
17. Lake Ontario/Saint Lawrence
River Traffic Challenges;
18. Public comment period.
A copy of all meeting documentation
will be available at https://
dco.uscg.afpims.mil/Our-Organization/
Assistant-Commandant-for-PreventionPolicy-CG-5P/Marine-TransportationSystems-CG-5PW/Office-of-Waterwaysand-Ocean-Policy/Office-of-Waterwaysand-Ocean-Policy-Great-LaskesPilotage-Div/ by September 4, 2018.
Alternatively, you may contact Mr.
Vincent Berg as noted in the FOR
FURTHER INFORMATION CONTACT section
above.
Public comments or questions will be
taken throughout the meeting as the
Committee discusses the issues and
prior to deliberations and voting. There
will also be a public comment period at
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Dated: July 26, 2018.
Michael D. Emerson,
Director, Marine Transportation Systems.
[FR Doc. 2018–16365 Filed 7–30–18; 8:45 am]
BILLING CODE 9110–04–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Notice of Availability of Updated
Privacy Impact Assessment for the
Southwest Border Pedestrian Exit
Field Test
U.S. Customs and Border
Protection, DHS.
ACTION: Notice of availability.
AGENCY:
U.S. Customs and Border
Protection (CBP) has made available an
updated Privacy Impact Assessment
(PIA) for the Southwest Border
Pedestrian Exit Field Test. This updated
PIA, which changes the retention period
for certain biometric data gathered
during the test, was published on the
Department of Homeland Security
(DHS) Privacy Office’s website on
March 5, 2018.
FOR FURTHER INFORMATION CONTACT:
Debra Danisek, Privacy Officer, U.S.
Customs and Border Protection, at
debra.danisek@cbp.dhs.gov or (202)
344–1191.
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SUMMARY:
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U.S.
Customs and Border Protection (CBP)
conducted a test to collect certain
biometric information at the Otay Mesa
port of entry from December 2015
through June 2016 (‘‘Southwest Border
Pedestrian Exit Field Test’’). This test
was announced in a notice published in
the Federal Register on November 13,
2015 (‘‘2015 Notice’’).1 CBP published a
Privacy Impact Assessment (PIA) for
this test on the Department of Homeland
Security (DHS) Privacy Office’s website
on November 6, 2015.2 The purpose of
the test was to determine if collecting
biometrics in conjunction with
biographic data upon exit from the
United States would assist CBP in
matching subsequent border crossing
information records with previously
collected entry records. The biometrics
collected provide CBP with a baseline of
images collected in a live environment
that can be compared with existing
images. CBP stated in the 2015 Notice
and in the PIA that it would retain data
collected during the test for one year.
Since the conclusion of the Southwest
Border Pedestrian Exit Field Test, CBP
has continued to explore the best
collection methods and modalities for a
biometric entry-exit program. CBP has
found that the data collected in the
Southwest Border Pedestrian Exit Field
Test continues to have value because it
provides CBP with a rich source of data
for ongoing analysis in its efforts to
implement an effective biometric entryexit program. CBP and its vendors are
able to use this data for analysis prior
to expending additional time and
resources to test various systems in the
field. Therefore, CBP revised its
retention policy for this data and
published an updated PIA on the DHS
Privacy Office’s website on March 5,
2018. The updated PIA provides that
CBP is retaining the biometric data
gathered under the Southwest Border
Pedestrian Exit Field Test until April
2020. It further provides that CBP is not
storing the associated biographic
information.
The updated PIA is available at:
https://www.dhs.gov/publication/
dhscbppia-027-southwest-borderpedestrian-exit-field-test.
SUPPLEMENTARY INFORMATION:
1 80 FR 70241. In the 2015 Notice, the test was
referred to as the ‘‘Test to Collect Biometric
Information at the Otay Mesa Port of Entry.’’
2 This PIA is available at: https://www.dhs.gov/
publication/dhscbppia-027-southwest-borderpedestrian-exit-field-test.
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Dated: July 26, 2018.
Debra Danisek,
CBP Privacy Officer, Privacy and Diversity
Office, Office of the Commissioner.
[FR Doc. 2018–16351 Filed 7–30–18; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final
Determination Concerning Subdermal
Needle Electrodes
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 Rhythmlink International,
LLC’s Subdermal Needle Electrode.
Based upon the facts presented, CBP has
concluded that the country of origin of
the Subdermal Needle Electrode is the
United States or Japan, depending on
the country of origin of the needle
electrode used in the assembly of the
Subdermal Needle Electrode, for
purposes of U.S. Government
procurement.
DATES: The final determination was
issued on July 13, 2018. 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
August 30, 2018.
FOR FURTHER INFORMATION CONTACT:
James Kim, Valuation and Special
Programs Branch, Regulations and
Rulings, Office of Trade (202) 325–0158.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on July 13, 2018,
pursuant to subpart B of Part 177, U.S.
Customs and Border Protection
Regulations (19 CFR part 177, subpart
B), CBP issued a final determination
concerning the country of origin of
Rhythmlink International, LLC’s
Subdermal Needle Electrode, which
may be offered to the U.S. Government
under an undesignated government
procurement contract. This final
determination, HQ H296072, was 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 determination, CBP
concluded that the assembly and
processing in China does not result in
a substantial transformation. Therefore,
SUMMARY:
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Federal Register / Vol. 83, No. 147 / Tuesday, July 31, 2018 / Notices
the country of origin of Rhythmlink
International, LLC’s Subdermal Needle
Electrode is the United States or Japan,
depending on the country of origin of
the needle electrode used in the
assembly of the Subdermal Needle
Electrode, for purposes of U.S.
Government procurement.
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: July 13, 2018.
Alice A. Kipel,
Executive Director, Regulations and Rulings,
Office of Trade.
HQ H296072
July 13, 2018
OT:RR:CTF:VS H296072 JK
CATEGORY: Origin
David S. Robinson
Nexsen Pruet, PLLC
4141 Parklake Avenue
Suite 200
Raleigh, NC 27612
RE: U.S. Government Procurement; Title
III, Trade Agreements Act of 1979 (19
U.S.C. § 2511); Subpart B, Part 177, CBP
Regulations; Subdermal Needle
Electrode; Substantial Transformation
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Dear Mr. Robinson:
This is in response to your
correspondence of March 29, 2018,
requesting a final determination on
behalf of Rhythmlink International, LLC
(‘‘Rhythmlink’’), pursuant to subpart B
of Part 177, U.S. Customs and Border
Protection (‘‘CBP’’) Regulations (19
C.F.R. § 177.21 et seq.).
This final determination concerns the
country of origin of the Subdermal
Needle Electrode. We note that
Rhythmlink is a party-at-interest within
the meaning of 19 C.F.R. § 177.22(d)(1)
and is entitled to request this final
determination.
FACTS:
Rhythmlink is headquartered in
Columbia, North Carolina and
manufactures and distributes medical
devices and provides custom packaging,
private labeling, custom products, and
contract manufacturing to its customers.
The subject merchandise is a
Subdermal Needle Electrode
(‘‘Product’’), a high-tensile strength
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stainless steel wire cleared by the U.S.
Food & Drug Administration (‘‘FDA’’)
for performing both stimulating and
recording electrical conductor
functions. The Product serves as a
physical connection between a patient
and medical diagnostic equipment that
records and/or elicits neurophysical
biopotentials. The FDA classifies and
designates the Product as a ‘‘needle
electrode,’’ defined in FDA regulations
as ‘‘a device which is placed
subcutaneously to stimulate or to record
electrical signals.’’ See 21 C.F.R.
§ 882.1350.
Rhythmlink’s fully assembled,
packaged Product consists of the
following six component parts: the
needle electrode, the leadwire, a
miniscule amount of solder, a heat
shrink tube, a protective cover for the
needle, and packaging. Rhythmlink sells
the Product in varying lengths and
styles, and end users can customize the
color of the connecting leadwire. The
leadwire acts as an electrical conductor
that transfers low voltage electrical
signals from the needle electrode to
medical diagnostic equipment. You
state that the functionality of the
Product is common to all lengths and is
unchanged by the color of the preconnected leadwire. You also state that
other varieties of needle electrodes are
available in the market that are not preconnected to a leadwire. Such needle
electrodes may connect to a leadwire
without soldering by using alligator
clips and other removable connectors.
Other varieties of needle electrodes may
utilize wireless transmission,
eliminating the need for a leadwire
altogether.
You state that Rhythmlink conducts
all of the engineering and design of the
Product in the United States. The
engineering and design of the
Subdermal Needle Electrode include the
following steps: research and
development; design control; IP
generation; regulatory clearances;
specifications; engineering drawings;
work instructions; tooling, fixtures, and
equipment designs; functional
verification testing; sterilization
validation; packaging, sterile barrier and
shelf life validation; and process
validations.
Rhythmlink outsources the actual
manufacturing and production of the
FDA-compliant needle electrodes (prior
to being attached to other components)
to a contract manufacturer of medical
devices. The contract manufacturer
manufactures the needle electrode
entirely in either the United States or
Japan using either U.S. or Japanese
stainless steel material. You state that its
production processes are largely
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proprietary and that the manufacturing
costs are unknown. Under the
manufacturing process of the needle
electrode, a stainless steel wire is cut to
precise lengths, and the cut wire
undergoes precise facet grinding,
passivation, and electropolishing. The
needle electrode is manufactured to
Rhythmlink’s precise specifications,
with three facets ground onto the front
end to meet sharpness and insertion
force requirements. Finally, it is
packaged and shipped. The country of
origin of the needle electrode is marked
as either the United States or Japan,
depending on the country in which it
was manufactured.
The Korean-origin leadwire is a
commercially available 26-gauge twisted
copper wire comprising 19 strands of
38-gauge copper wire with medical
grade PVC covering. The leadwire is
available in a total of 35 color options.
The Korean supplier of this wire cuts
the wire, crimps a socket pin, attaches
a connector to one end of the wire, and
ships the wire to China.
The needle electrodes from the United
States or Japan are exported to China for
additional assembly and processing.
The ‘naked’ end of the Korean leadwire
is soldered to the needle electrode using
Chinese-origin solder, which is a mix of
tin and copper and represents a quarter
of a percent of the Product’s cost. You
state that the soldering process takes
roughly a second, substantiated by a
video you provided of the process, and
that six operators can professionally
solder 30,000 Products in a day. The
soldered Product undergoes ultrasonic
cleaning and drying (spin and
convention drying) in bulk. A Japaneseorigin heat shrink tube, available in
almost 40 different diameters, is added
to protect the solder joint. A U.S.-origin
protective needle cover is placed over
the needle electrode to prevent
accidents. Finally, the product is
packaged in a Tyvek pouch and
cardboard packaging of Chinese-origin
and re-exported to the United States.
In the United States, the Product is
subject to sterilization and a
randomized sampling and testing
protocol prior to sale.
You provided a catalog of
Rhythmlink’s products, which includes
the Subdermal Needle Electrode. You
also provided a detailed process map
depicting the various processing steps
involved in the engineering,
manufacture, and sale of the Product,
along with information on the country
in which each step occurs and the skill
and technology level required for each
step. In addition, you provided
component specifications for the
Product.
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Federal Register / Vol. 83, No. 147 / Tuesday, July 31, 2018 / Notices
ISSUE:
What is the country of origin of the
Subdermal Needle Electrode for
purposes of U.S. Government
procurement?
LAW AND 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 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, pursuant to
subpart B of Part 177, 19 C.F.R. § 177.21
et seq., which implements Title III of the
Trade Agreements Act of 1979, as
amended (19 U.S.C. § 2511 et seq.)
(‘‘TAA’’).
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
distinct from that of the article or articles
from which it was so transformed.
See also 19 C.F.R. § 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 Federal
Acquisition Regulations. See 19 C.F.R.
§ 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 TAA. See 48 C.F.R.
§ 25.403(c)(1). The Federal Acquisition
Regulations define ‘‘U.S.-made end
product’’ as:
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. . . 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.
48 C.F.R. § 25.003.
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. A substantial
transformation will not result from a
minor manufacturing or combining
process that leaves the identity of the
article intact. See United States v.
Gibson-Thomsen Co., 27 C.C.P.A. 267
(1940); National Juice Products
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Association v. United States, 628 F.
Supp. 978 (Ct. Int’l Trade 1986).
Courts have held that when the
properties and uses of a product are
predetermined by the material from
which it was made, no substantial
transformation occurs. For example, in
Superior Wire v. United States, 669 F.
Supp. 472 (Ct. Int’l Trade 1987), aff’d,
867 F.2d 1409 (Fed. Cir. 1989), wire rod
in coils was shipped to Canada where
it was drawn into wire. The tensile
strength of the final product was
increased by approximately 30 to 40
percent as the rod was reduced in crosssectional area by about 30 percent and
was elongated. The court determined
that the drawing operation did not
result in a substantial transformation,
pointing out that the properties of the
wire rod and its uses were determined
by the chemical content of the rod and
the cooling processes used in its
manufacture, and that the wire rod
dictated the final form of the finished
wire.
For purposes of this ruling, we
assume that the country of origin of the
stainless steel wire used to manufacture
the needle electrode is the United States
or Japan. You assert that the assembly
and processing that occurs in China, a
non-designated country, does not
substantially transform the U.S. or
Japanese-origin needle electrode,
claimed to be the essential character of
the Product, into a new and different
article of commerce.
In HQ 555774, dated December 10,
1990, Customs, a predecessor of CBP,
ruled that Japanese-origin wire cut to
varying length and electrical connectors
crimped onto the ends of the wire in the
United States did not constitute
substantial transformation. Customs
found that the essential character and
use of the wire before and after the
processing was the same, i.e., to conduct
electrical current.
In HQ H248851, dated July 8, 2014,
CBP held that an Israeli-origin CO2 tube
was not substantially transformed in
China when cut to length and attached
to four other components from Israel
and China. CBP found that the CO2 tube
performed the essential function of the
finished product, which was the
delivery of breath for monitoring the
CO2 level in a patient’s breath. By way
of the assembly process in China, the
CO2 tube was attached to other
components that facilitated its function
and did not lose its individual identity
in the process.
Like the operations described in HQ
555774 and HQ H248851, the assembly
and processing that occur in China are
simple and minor processes that leave
the identity of the needle electrode
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36949
intact. The soldering of the leadwire to
the needle electrode occurs in roughly
one second. The remaining processing
of the Product, consisting of cleaning
and drying, adding a heat shrink and
protective cover, and packaging, are
likewise simple and minor operations
involving highly repetitive, low-skill
functions.
As in Superior Wire, the properties
and uses of the Product are
predetermined by the qualities of the
needle electrode itself, which do not
change as a result of the Chinese
assembly and processing operations.
The Product’s main function is to
penetrate the skin or other membrane to
allow medical diagnostic equipment to
record or stimulate neurophysical
biopotentials. While the presence of a
pre-connected leadwire does provide
convenience for the end user, by
eliminating the need to use removable
connectors for attaching a leadwire, the
needle electrode is nonetheless capable
of performing its main function without
a pre-connected leadwire. Prior to any
Chinese assembly or processing, the
needle electrode already meets the
definition of the FDA regulated ‘‘needle
electrode.’’ As in HQ H248851, the
attachment of the leadwire and other
components to the needle electrode may
facilitate its function, but the needle
electrode does not lose its individual
identity in the process. As a result, we
find that the U.S. or Japanese-origin
needle electrode, rather than the
Korean-origin leadwire, determines the
essential character of the Product.
We find that the name, character, and
use of the needle electrode remain
unchanged after the attachment of the
leadwire and other components.
Accordingly, we find that the needle
electrode is not substantially
transformed as a result of the Chinese
assembly and processing operations.
HOLDING:
The country of origin of the
Subdermal Needle Electrode for U.S.
Government procurement purposes is
the United States or Japan, depending
on the country of origin of the needle
electrode.
Notice of this final determination will
be given in the Federal Register, as
required by 19 C.F.R. § 177.29. Any
party-at-interest other than the party
which requested this final
determination may request, pursuant to
19 C.F.R. § 177.31, that CBP reexamine
the matter anew and issue a new final
determination. Pursuant to 19 C.F.R.
§ 177.30, any party-at-interest may,
within 30 days after publication of the
Federal Register notice referenced
above, seek judicial review of this final
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Federal Register / Vol. 83, No. 147 / Tuesday, July 31, 2018 / Notices
determination before the Court of
International Trade.
Sincerely,
Alice A. Kipel
Executive Director
Regulations and Rulings
Office of Trade
[FR Doc. 2018–16281 Filed 7–30–18; 8:45 am]
BILLING CODE P
DEPARTMENT OF HOMELAND
SECURITY
[Docket No. DHS–2018–0003]
Privacy Act of 1974; System of
Records
Department of Homeland
Security.
ACTION: Notice of a new system of
records.
AGENCY:
In accordance with the
Privacy Act of 1974, the Department of
Homeland Security (DHS) proposes to
consolidate two legacy systems of
record, Department of Homeland
Security/U.S. Citizenship and
Immigration Services-002 Background
Check Service and Department of
Homeland Security/U.S. Citizenship
and Immigration Services-003 Biometric
Storage System into the new DHS
system of records titled, ‘‘Department of
Homeland Security/U.S. Citizenship
and Immigration Services-018
Immigration Biometric and Background
Check System of Records.’’ This system
of records notice (SORN) allows the
DHS U.S. Citizenship and Immigration
Services (USCIS) to collect and maintain
biographic, biometric, and background
check records on applicants, petitioners,
sponsors, beneficiaries, or other
individuals in connection with a benefit
request. USCIS uses biometric and
associated biographic information to
verify identity, conduct criminal and
national security background checks
against internal and external
government systems, and to support
domestic and foreign data sharing
agreements. The categories of
individuals, categories of records, and
the routine uses of these legacy systems
of records notices have been
consolidated and updated to better
reflect the Department’s biometric and
biographic criminal background checks;
identity enrollment, verification, and
resolution; document production record
systems; and data sharing efforts.
Additionally, DHS is issuing a Notice
of Proposed Rulemaking (NPRM) to
exempt this system of records from
certain provisions of the Privacy Act,
elsewhere in the Federal Register. This
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SUMMARY:
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new system will be included in DHS’s
inventory of record systems.
DATES: Submit comments on or before
August 30, 2018. This system will be
effective upon publication. Routine uses
will become effective August 30, 2018.
ADDRESSES: You may submit comments,
identified by docket number DHS–
2018–0003 by one of the following
methods:
• Federal e-Rulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–343–4010.
• Mail: Philip S. Kaplan, Chief
Privacy Officer, Privacy Office,
Department of Homeland Security,
Washington, DC 20528–0655.
Instructions: All submissions received
must include the agency name and
docket number DHS–2018–0003 for this
notice. All comments received will be
posted without change to https://
www.regulations.gov, including any
personal information provided.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For
general questions, please contact:
Donald K. Hawkins, (202) 272–8030,
USCIS.PrivacyCompliance@
uscis.dhs.gov, Privacy Officer, U.S.
Citizenship and Immigration Services,
20 Massachusetts Avenue NW,
Washington, DC 20529. For privacy
questions, please contact: Philip S.
Kaplan, (202) 343–1717, Privacy@
hq.dhs.gov, Chief Privacy Officer,
Privacy Office, Department of Homeland
Security, Washington, DC 20528–0655.
SUPPLEMENTARY INFORMATION:
I. Background
DHS USCIS has relied on two
preexisting DHS/USCIS Privacy Act
SORNs for the maintenance of USCIS
biometric and background check
records: ‘‘DHS/USCIS 002 Background
Check Service,’’ 72 FR 31082 (June 5,
2007), and ‘‘DHS/USCIS–003 Biometric
Storage System,’’ 72 FR 17172 (April 6,
2007). Such records will be covered by
one new system of records named
‘‘DHS/USCIS–018 Immigration
Biometric and Background Check (IBBC)
System of Records.’’ USCIS processes
and adjudicates most immigration
benefit requests and other immigration
request forms (e.g., applications and
petitions) for DHS. This new system of
records notice consolidates and covers
all of USCIS’s biometric and associated
biographic information it collects
pursuant to that mission. The purpose
of this system is to verify identity and
conduct criminal and national security
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background checks in order to establish
an individual’s eligibility for an
immigration benefit or other request,
and support domestic and international
data sharing efforts. USCIS determines
eligibility by capturing biometric and
associated biographic data from benefit
requestors, beneficiaries, and other
categories of individuals to facilitate
three key operational functions: (1)
Verify an individual’s identity; (2)
conduct criminal and national security
background checks; and (3) produce
benefit cards and documents as a proof
of benefit.
Most individuals who file benefit
requests for themselves or on the behalf
of others (i.e., petitioner, applicants,
beneficiaries, and requestors) are subject
to background, identity, and security
checks to ensure eligibility for the
requested benefit. Other individuals in
connection with immigration benefit
requests or other requests (i.e.,
household members, sponsors) may also
be subject to certain background,
identity, and security checks. The
biometric collection process begins with
the capture of biometric data at an
authorized biometric capture site,
including USCIS offices, Application
Support Centers, or U.S. consular offices
and military installations abroad. USCIS
requires applicants, petitioners,
sponsors, beneficiaries, or other
individuals in connection of a benefit
request to submit their biometrics along
with associated biographic information
to USCIS for background, identity, and
security checks. The types of
background checks USCIS conducts
vary by the benefit or request type.
Standard background checks may
include, but are not limited to:
Biometric based checks:
• Federal Bureau of Investigation
(FBI) Next Generation Identification
(NGI) Biometric Check;
• DHS Office of Biometric and
Identity Management (OBIM)
Automated Biometric Identification
System (IDENT) Biometric Check;
• Department of Defense (DoD)
Automated Biometric Identification
System (ABIS) Biometric Check;
Biographic name-based checks:
• FBI Central Records System (CRS)
and Universal Index (UNI) Name Check;
• U.S. Customs and Border Protection
(CBP) TECS Name Checks;
• Department of State (DOS) Consular
Lookout and Support System (CLASS);
and
• DOS Security Advisory Opinion
(SAO).
USCIS may also perform interagency
checks with intelligence community
partners for certain benefits. The results
of these checks are used to inform
E:\FR\FM\31JYN1.SGM
31JYN1
]]>Agencies
[Federal Register Volume 83, Number 147 (Tuesday, July 31, 2018)]
[Notices]
[Pages 36947-36950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16281]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning Subdermal
Needle Electrodes
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 Rhythmlink International, LLC's Subdermal Needle
Electrode. Based upon the facts presented, CBP has concluded that the
country of origin of the Subdermal Needle Electrode is the United
States or Japan, depending on the country of origin of the needle
electrode used in the assembly of the Subdermal Needle Electrode, for
purposes of U.S. Government procurement.
DATES: The final determination was issued on July 13, 2018. 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 August 30, 2018.
FOR FURTHER INFORMATION CONTACT: James Kim, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade (202) 325-
0158.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on July 13,
2018, pursuant to subpart B of Part 177, U.S. Customs and Border
Protection Regulations (19 CFR part 177, subpart B), CBP issued a final
determination concerning the country of origin of Rhythmlink
International, LLC's Subdermal Needle Electrode, which may be offered
to the U.S. Government under an undesignated government procurement
contract. This final determination, HQ H296072, was 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 determination, CBP concluded that the assembly
and processing in China does not result in a substantial
transformation. Therefore,
[[Page 36948]]
the country of origin of Rhythmlink International, LLC's Subdermal
Needle Electrode is the United States or Japan, depending on the
country of origin of the needle electrode used in the assembly of the
Subdermal Needle Electrode, for purposes of U.S. Government
procurement.
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: July 13, 2018.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H296072
July 13, 2018
OT:RR:CTF:VS H296072 JK
CATEGORY: Origin
David S. Robinson
Nexsen Pruet, PLLC
4141 Parklake Avenue
Suite 200
Raleigh, NC 27612
RE: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. Sec. 2511); Subpart B, Part 177, CBP Regulations;
Subdermal Needle Electrode; Substantial Transformation
Dear Mr. Robinson:
This is in response to your correspondence of March 29, 2018,
requesting a final determination on behalf of Rhythmlink International,
LLC (``Rhythmlink''), pursuant to subpart B of Part 177, U.S. Customs
and Border Protection (``CBP'') Regulations (19 C.F.R. Sec. 177.21 et
seq.).
This final determination concerns the country of origin of the
Subdermal Needle Electrode. We note that Rhythmlink is a party-at-
interest within the meaning of 19 C.F.R. Sec. 177.22(d)(1) and is
entitled to request this final determination.
FACTS:
Rhythmlink is headquartered in Columbia, North Carolina and
manufactures and distributes medical devices and provides custom
packaging, private labeling, custom products, and contract
manufacturing to its customers.
The subject merchandise is a Subdermal Needle Electrode
(``Product''), a high-tensile strength stainless steel wire cleared by
the U.S. Food & Drug Administration (``FDA'') for performing both
stimulating and recording electrical conductor functions. The Product
serves as a physical connection between a patient and medical
diagnostic equipment that records and/or elicits neurophysical
biopotentials. The FDA classifies and designates the Product as a
``needle electrode,'' defined in FDA regulations as ``a device which is
placed subcutaneously to stimulate or to record electrical signals.''
See 21 C.F.R. Sec. 882.1350.
Rhythmlink's fully assembled, packaged Product consists of the
following six component parts: the needle electrode, the leadwire, a
miniscule amount of solder, a heat shrink tube, a protective cover for
the needle, and packaging. Rhythmlink sells the Product in varying
lengths and styles, and end users can customize the color of the
connecting leadwire. The leadwire acts as an electrical conductor that
transfers low voltage electrical signals from the needle electrode to
medical diagnostic equipment. You state that the functionality of the
Product is common to all lengths and is unchanged by the color of the
pre-connected leadwire. You also state that other varieties of needle
electrodes are available in the market that are not pre-connected to a
leadwire. Such needle electrodes may connect to a leadwire without
soldering by using alligator clips and other removable connectors.
Other varieties of needle electrodes may utilize wireless transmission,
eliminating the need for a leadwire altogether.
You state that Rhythmlink conducts all of the engineering and
design of the Product in the United States. The engineering and design
of the Subdermal Needle Electrode include the following steps: research
and development; design control; IP generation; regulatory clearances;
specifications; engineering drawings; work instructions; tooling,
fixtures, and equipment designs; functional verification testing;
sterilization validation; packaging, sterile barrier and shelf life
validation; and process validations.
Rhythmlink outsources the actual manufacturing and production of
the FDA-compliant needle electrodes (prior to being attached to other
components) to a contract manufacturer of medical devices. The contract
manufacturer manufactures the needle electrode entirely in either the
United States or Japan using either U.S. or Japanese stainless steel
material. You state that its production processes are largely
proprietary and that the manufacturing costs are unknown. Under the
manufacturing process of the needle electrode, a stainless steel wire
is cut to precise lengths, and the cut wire undergoes precise facet
grinding, passivation, and electropolishing. The needle electrode is
manufactured to Rhythmlink's precise specifications, with three facets
ground onto the front end to meet sharpness and insertion force
requirements. Finally, it is packaged and shipped. The country of
origin of the needle electrode is marked as either the United States or
Japan, depending on the country in which it was manufactured.
The Korean-origin leadwire is a commercially available 26-gauge
twisted copper wire comprising 19 strands of 38-gauge copper wire with
medical grade PVC covering. The leadwire is available in a total of 35
color options. The Korean supplier of this wire cuts the wire, crimps a
socket pin, attaches a connector to one end of the wire, and ships the
wire to China.
The needle electrodes from the United States or Japan are exported
to China for additional assembly and processing. The `naked' end of the
Korean leadwire is soldered to the needle electrode using Chinese-
origin solder, which is a mix of tin and copper and represents a
quarter of a percent of the Product's cost. You state that the
soldering process takes roughly a second, substantiated by a video you
provided of the process, and that six operators can professionally
solder 30,000 Products in a day. The soldered Product undergoes
ultrasonic cleaning and drying (spin and convention drying) in bulk. A
Japanese-origin heat shrink tube, available in almost 40 different
diameters, is added to protect the solder joint. A U.S.-origin
protective needle cover is placed over the needle electrode to prevent
accidents. Finally, the product is packaged in a Tyvek pouch and
cardboard packaging of Chinese-origin and re-exported to the United
States.
In the United States, the Product is subject to sterilization and a
randomized sampling and testing protocol prior to sale.
You provided a catalog of Rhythmlink's products, which includes the
Subdermal Needle Electrode. You also provided a detailed process map
depicting the various processing steps involved in the engineering,
manufacture, and sale of the Product, along with information on the
country in which each step occurs and the skill and technology level
required for each step. In addition, you provided component
specifications for the Product.
[[Page 36949]]
ISSUE:
What is the country of origin of the Subdermal Needle Electrode for
purposes of U.S. Government procurement?
LAW AND 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 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, pursuant
to subpart B of Part 177, 19 C.F.R. Sec. 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.) (``TAA'').
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 C.F.R. Sec. 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 Federal Acquisition Regulations. See 19
C.F.R. Sec. 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 TAA. See 48 C.F.R. Sec. 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 a name,
character, or use distinct from that of the article or articles from
which it was transformed.
48 C.F.R. Sec. 25.003.
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. A substantial transformation will
not result from a minor manufacturing or combining process that leaves
the identity of the article intact. See United States v. Gibson-Thomsen
Co., 27 C.C.P.A. 267 (1940); National Juice Products Association v.
United States, 628 F. Supp. 978 (Ct. Int'l Trade 1986).
Courts have held that when the properties and uses of a product are
predetermined by the material from which it was made, no substantial
transformation occurs. For example, in Superior Wire v. United States,
669 F. Supp. 472 (Ct. Int'l Trade 1987), aff'd, 867 F.2d 1409 (Fed.
Cir. 1989), wire rod in coils was shipped to Canada where it was drawn
into wire. The tensile strength of the final product was increased by
approximately 30 to 40 percent as the rod was reduced in cross-
sectional area by about 30 percent and was elongated. The court
determined that the drawing operation did not result in a substantial
transformation, pointing out that the properties of the wire rod and
its uses were determined by the chemical content of the rod and the
cooling processes used in its manufacture, and that the wire rod
dictated the final form of the finished wire.
For purposes of this ruling, we assume that the country of origin
of the stainless steel wire used to manufacture the needle electrode is
the United States or Japan. You assert that the assembly and processing
that occurs in China, a non-designated country, does not substantially
transform the U.S. or Japanese-origin needle electrode, claimed to be
the essential character of the Product, into a new and different
article of commerce.
In HQ 555774, dated December 10, 1990, Customs, a predecessor of
CBP, ruled that Japanese-origin wire cut to varying length and
electrical connectors crimped onto the ends of the wire in the United
States did not constitute substantial transformation. Customs found
that the essential character and use of the wire before and after the
processing was the same, i.e., to conduct electrical current.
In HQ H248851, dated July 8, 2014, CBP held that an Israeli-origin
CO2 tube was not substantially transformed in China when cut to length
and attached to four other components from Israel and China. CBP found
that the CO2 tube performed the essential function of the finished
product, which was the delivery of breath for monitoring the CO2 level
in a patient's breath. By way of the assembly process in China, the CO2
tube was attached to other components that facilitated its function and
did not lose its individual identity in the process.
Like the operations described in HQ 555774 and HQ H248851, the
assembly and processing that occur in China are simple and minor
processes that leave the identity of the needle electrode intact. The
soldering of the leadwire to the needle electrode occurs in roughly one
second. The remaining processing of the Product, consisting of cleaning
and drying, adding a heat shrink and protective cover, and packaging,
are likewise simple and minor operations involving highly repetitive,
low-skill functions.
As in Superior Wire, the properties and uses of the Product are
predetermined by the qualities of the needle electrode itself, which do
not change as a result of the Chinese assembly and processing
operations. The Product's main function is to penetrate the skin or
other membrane to allow medical diagnostic equipment to record or
stimulate neurophysical biopotentials. While the presence of a pre-
connected leadwire does provide convenience for the end user, by
eliminating the need to use removable connectors for attaching a
leadwire, the needle electrode is nonetheless capable of performing its
main function without a pre-connected leadwire. Prior to any Chinese
assembly or processing, the needle electrode already meets the
definition of the FDA regulated ``needle electrode.'' As in HQ H248851,
the attachment of the leadwire and other components to the needle
electrode may facilitate its function, but the needle electrode does
not lose its individual identity in the process. As a result, we find
that the U.S. or Japanese-origin needle electrode, rather than the
Korean-origin leadwire, determines the essential character of the
Product.
We find that the name, character, and use of the needle electrode
remain unchanged after the attachment of the leadwire and other
components. Accordingly, we find that the needle electrode is not
substantially transformed as a result of the Chinese assembly and
processing operations.
HOLDING:
The country of origin of the Subdermal Needle Electrode for U.S.
Government procurement purposes is the United States or Japan,
depending on the country of origin of the needle electrode.
Notice of this final determination will be given in the Federal
Register, as required by 19 C.F.R. Sec. 177.29. Any party-at-interest
other than the party which requested this final determination may
request, pursuant to 19 C.F.R. Sec. 177.31, that CBP reexamine the
matter anew and issue a new final determination. Pursuant to 19 C.F.R.
Sec. 177.30, any party-at-interest may, within 30 days after
publication of the Federal Register notice referenced above, seek
judicial review of this final
[[Page 36950]]
determination before the Court of International Trade.
Sincerely,
Alice A. Kipel
Executive Director
Regulations and Rulings
Office of Trade
[FR Doc. 2018-16281 Filed 7-30-18; 8:45 am]
BILLING CODE P
