Notice of Issuance of Final Determination Concerning Biomedix Selec-3 Multiple Drop Intravenous Product, 22102-22105 [2025-09320]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection

[Federal Register Volume 90, Number 99 (Friday, May 23, 2025)]
[Notices]
[Pages 22102-22105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09320]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Biomedix 
Selec-3 Multiple Drop Intravenous Product

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (CBP) has issued a final determination concerning the 
country of origin of the Biomedix Selec-3 Multiple Drop Intravenous 
Product. Based upon the facts presented, CBP has concluded that the 
subject IV products, under two of five scenarios, would be the product 
of a foreign country or instrumentality designated pursuant to title 
III of the Trade Agreements Act of 1979, as amended; in three of the 
scenarios, the last substantial transformation occurs in the United 
States.

DATES: The final determination was issued on May 13, 2025. A copy of 
the final determination is attached. Any party-at-interest, as defined 
in 19 CFR 177.22(d), may seek judicial review of this final 
determination no later than June 23, 2025.

FOR FURTHER INFORMATION CONTACT: Ani Mard, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of Trade, at (202) 
325-0727.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on May 13, 2025, 
U.S. Customs and Border Protection (CBP) issued a final determination 
concerning the country of origin of the Biomedix Selec-3 Multiple Drop 
Intravenous Product, for purposes of title III of the Trade Agreements 
Act of 1979. This final determination, HQ H339462, was issued at the 
request of Wai Medical Technologies LLC, under procedures set

[[Page 22103]]

forth at 19 CFR part 177, subpart B, which implements title III of the 
Trade Agreements Act of 1979, as amended (19 U.S.C. 2511-18). In the 
final determination, CBP has concluded that, based upon the facts 
presented, the country of origin of the IV products is the country in 
which the selectable drop chamber (``SDC'') originates.
    Section 177.29, CBP Regulations (19 CFR 177.29), provides that a 
notice of final determination shall be published in the Federal 
Register within 60 days of the date the final determination is issued. 
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any 
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial 
review of a final determination within 30 days of publication of such 
determination in the Federal Register.

Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.

HQ H339462

May 13, 2025

OT:RR:CTF:VS H339462 AM
Category: Origin
Dave Townsend, Dorsey & Whitney LLP, 50 South Sixth Street Suit 
1500, Minneapolis, Minnesota 55402
Re: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country 
of Origin of IV Drips
Dear Mr. Townsend:

    This is in response to your request, dated May 16, 2024, on 
behalf of your client, Wai Medical Technologies (``Wai Medical'') 
and its affiliate MedSource International LLC (``MedSource''), for a 
final determination concerning the country of origin of the Biomedix 
Selec-3 Multiple Drop Intravenous Product (``Selec-3 IV Product''), 
pursuant to Title III of the Trade Agreements Act of 1979 (``TAA''), 
as amended (19 U.S.C. 2511 et seq.), and subpart B of Part 177, U.S. 
Customs and Border Protection (``CBP'') Regulations (19 CFR 177.21, 
et seq.). Your request, submitted as an electronic ruling request, 
was forwarded to this office from the National Commodity Specialist 
Division (``NCSD''). Wai Medical is a party-at-interest within the 
meaning of 19 CFR 177.22(d)(1) and 177.23(a) and is therefore 
entitled to request this final determination.

Facts

    The merchandise at issue is the Selec-3 IV Product. The Selec-3 
IV Product is an intravenous set made with components from a variety 
of U.S. and non-U.S. components. The Selec-3 IV Product has a 
patented selectable drop chamber (``SDC'') that offers three drop 
settings. These settings allow the user to adjust the drip rate for 
the fluids administered via the Selec-3 IV Product. By allowing the 
user to quickly and easily change the drip rate, the Selec-3 IV 
Product saves time, reduces inventory costs, and minimizes the risk 
of contamination of fluids administered to patients.
    The Selec-3 IV Product has the following components:
     Check valve and connector: allows opening and closing 
the polyvinyl chloride (``PVC'') tube for purposes of helping 
regulate flow of the fluid and allows control of fluid from either 
the Drop Chamber or one of the Y-sites.
     Dust cap: placed on the end of the Selec-3 IV Product 
to ensure the end remains uncontaminated prior to use.
     Pinch Clamp (x2): The pinch clamps can be used to stop 
and start the flow of liquid through the tubing and to the patient.
     PVC Tube (73 Inches): The PVC tube allows the fluid to 
flow from the bag containing the fluid, through the SDC, and 
ultimately to the patient.
     Roller Clamp: The clamp is a binary control allowing or 
disallowing flow of fluid into the SDC, and thus to the patient.
     SDC: The SDC is a clear plastic tube with a mechanism 
allowing the user to select one of three drop rates. The SDC is 
patented and allows unwanted gas to bubble out of the fluid, 
allowing medical staff to see that fluid is flowing through the IV, 
and allowing regulation of the flow rate through the patented 
adjustable SDC.
     Spike and Cap: The spike is used to connect the Selec-3 
IV Product to the fluid being administered to the patient. The spike 
is inserted into the bag holding the fluid. The cap is used to 
ensure the spike is not contaminated prior to use.
     Spin Lock: The spin lock allows connection between a 
device allowing the direct infusion of the fluids into the patient 
to the Selec-3 IV Product.
     Y-Sites (x3): The Y-sites allow the injection of 
additional treatments or medicines to be administered to the 
patient, in addition to the fluid connected to the Selec-3 IV 
Product that runs through the SDC and tubing to the patient.
    Assembly of the Selec-3 IV Product involves three steps: (1) 
assembly of the SDC subassembly with the roller clamp and spike, (2) 
the assembly of the other tubing sub-assemblies, and (3) the final 
assembly.

(1) Assembly of the SDC

    Assembly of the SDC involves connecting, gluing, and sealing the 
parts of the SDC,
    including the tubing and the roller clamp and spike. The plastic 
tubing is inspected and the tube to the drip-rate selector is 
aligned and glued. Then, the drop chamber is inspected and cured 
with ultraviolet light to bind them together. The assembler must 
apply silicone to the selector, sealing the selector, and adding the 
selector top. Lastly, the chamber is connected to a short piece of 
tubing that ends with a roller clamp and spike. The total cost of 
the SDC sub-assembly components is roughly less than half of the 
total cost of the Selec-3 IV Product.

(2) Assembly of the Other Tubing Sub-Assemblies

    The premanufactured parts are inspected for defects. Assembly 
continues with three sections of tubing, i.e., the primary tubing, 
the patient side assembly (top half), and the extension set (bottom 
half). To assemble each of those three sections, tubing is connected 
to luers and Y-sites.

(3) Final Assembly

    During the final assembly process, the primary tubing, the 
patient side assembly, and the extension set are put together with 
the SDC sub-assembly, and the Selec-3 IV Product is complete. 
Adhesives are added to ensure lasting connection between certain 
parts.
    Set forth below are several sourcing scenarios for components 
that Wai Medical is contemplating. Wai Medical requests that CBP 
issue a determination covering all five scenarios below.
    Scenario 1: All of the Selec-3 IV Product components originate 
from the United States, are sterilized in the United States, and 
then are assembled in India prior to being re-imported, and fully 
assembled in the United States.
    Scenario 2: The SDC originates from the United States and is 
assembled into the SDC sub-assembly (including the roller clamp and 
spike) in the United States. The remaining components originate, are 
sterilized, and assembled in India. The final assembly takes place 
in India.
    Scenario 3: The SDC originates from the United States. The SDC 
sub-assembly takes place in India. Additionally, remaining 
components originate, are sterilized, and assembled in India. The 
final assembly takes place in India.
    Scenario 4: The SDC originates from Mexico and all components 
(including SDC) are sterilized and assembled in India. All of the 
Selec-3 IV Product components, except the SDC, originate and are 
sterilized in non-TAA eligible countries. The final assembly takes 
place in India.
    Scenario 5: The SDC components originate and are assembled into 
the SDC sub-assembly in Mexico. All other parts of the Selec-3 IV 
Product originate from China. Sterilization of the entire product 
occurs in China. The final assembly takes place in India.

Issue

    What is the country of origin of the Biomedix Selec-3 Multiple 
Drop Intravenous Product for purposes of U.S. Government 
procurement?

Law & Analysis

    CBP issues country of origin advisory rulings and final 
determinations as to whether an article is or would be a product of 
a designated country or instrumentality for the purpose of granting 
waivers of certain ``Buy American'' restrictions in U.S. law or 
practice for products offered for sale to the U.S. Government, 
pursuant to subpart B of Part 177, 19 CFR 177.21 et seq., which 
implements Title III, Trade Agreements Act of 1979, as amended (19 
U.S.C. 2511-2518).
    CBP's authority to issue advisory rulings and final 
determinations is set forth in 19 U.S.C. 2515(b)(1), which states:
    For the purposes of this subchapter, the Secretary of the 
Treasury shall provide for the prompt issuance of advisory rulings 
and final determinations on whether, under section 2518(4)(B) of 
this title, an article is or would be a product of a foreign country 
or instrumentality designated pursuant to section 2511(b) of this 
title.

Emphasis added.

[[Page 22104]]

    The Secretary of the Treasury's authority mentioned above, along 
with other customs revenue functions, are delegated to the Secretary 
of Homeland Security via Treasury Department Order (TO) 100-20 
``Delegation of Customs revenue functions to Homeland Security,'' 
dated October 30, 2024, and are subject to further delegations to 
CBP (see also 19 CFR part 177, subpart B).
    The rule of origin set forth in 19 U.S.C. 2518(4)(B) states:
    An article is a product of a country or instrumentality only if 
(i) it is wholly the growth, product, or manufacture of that country 
or instrumentality, or (ii) in the case of an article which consists 
in whole or in part of materials from another country or 
instrumentality, it has been substantially transformed into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was so 
transformed.

See also 19 CFR 177.22(a).

    In rendering advisory rulings and final determinations for 
purposes of U.S. Government procurement, CBP applies the provisions 
of subpart B of Part 177 consistent with the Federal Acquisition 
Regulation (``FAR''). See 19 CFR 177.21. In this regard, CBP 
recognizes that the FAR restricts the U.S. Government's purchase of 
products to U.S.-made or designated country end products for 
acquisitions subject to the TAA. See 48 CFR 25.403(c)(1).
    The FAR, 48 CFR 25.003, defines ``U.S.-made end product'' as:
    . . . an article that is mined, produced, or manufactured in the 
United States or that is substantially transformed in the United 
States into a new and different article of commerce with a name, 
character, or use distinct from that of the article or articles from 
which it was transformed.
    Additionally, the FAR, 48 CFR 25.003, defines ``designated 
country end product'' as:

a WTO GPA [World Trade Organization Government Procurement 
Agreement] country end product, an FTA [Free Trade Agreement] 
country end product, a least developed country end product, or a 
Caribbean Basin country end product.
    Section 25.003 defines ``WTO GPA country end product'' as an 
article that:
    (1) Is wholly the growth, product, or manufacture of a WTO GPA 
country; or
    (2) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in a WTO GPA country into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was transformed. The term refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes 
services (except transportation services) incidental to the article, 
provided that the value of those incidental services does not exceed 
that of the article itself.
    Once again, we note that the Selec-3 IV components are sourced 
from both the United States, TAA-designated countries (i.e., 
Mexico), as well as non-TAA countries (i.e., China, Vietnam, and 
Malaysia).
    In order to determine whether a substantial transformation 
occurs when components of various origins are assembled into 
completed products, CBP considers the totality of the circumstances 
and makes such determinations on a case-by-case basis. The country 
of origin of the item's components, extent of the processing that 
occurs within a country, and whether such processing renders a 
product with a new name, character, and use are primary 
considerations in such cases. Additionally, factors such as the 
resources expended on product design and development, the extent and 
nature of post-assembly inspection and testing procedures, and 
worker skill required during the actual manufacturing process will 
be considered when determining whether a substantial transformation 
has occurred. No one factor is determinative.
    Assembly operations that are minimal or simple, as opposed to 
complex or meaningful, will generally not result in a substantial 
transformation. Factors which may be relevant in this evaluation 
include the nature of the operation (including the number of 
components assembled), the number of different operations involved, 
and whether a significant period of time, skill, detail, and quality 
control are necessary for the assembly operation. See C.S.D. 80-111, 
C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 
90-97. If the manufacturing or combining process is a minor one, 
which leaves the identity of the article intact, a substantial 
transformation has not occurred. See Uniroyal, Inc. v. United 
States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022 
(Fed. Cir. 1983) (imported shoe uppers added to an outer sole in the 
United States were the ``very essence of the finished shoe'' and the 
character of the product remained unchanged and did not undergo 
substantial transformation in the United States).
    The U.S. Court of International Trade (``CIT'') more recently 
interpreted the meaning of ``substantial transformation'' in 
Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 
(2016). Energizer involved the determination of the country of 
origin of a flashlight, referred to as the Generation II flashlight. 
All the components of the flashlight were of Chinese origin, except 
for a white LED and a hydrogen getter. The components were imported 
into the United States and assembled into the finished Generation II 
flashlight. The Energizer court reviewed the ``name, character and 
use'' test utilized in determining whether a substantial 
transformation had occurred and noted, citing Uniroyal, Inc., 3 CIT 
at 226, that when ``the post-importation processing consists of 
assembly, courts have been reluctant to find a change in character, 
particularly when the imported articles do not undergo a physical 
change.'' Energizer at 1318. In addition, the court noted that 
``when the end-use was pre-determined at the time of importation, 
courts have generally not found a change in use.'' Energizer at 
1319.
    In reaching its decision, the Energizer court expressed the 
question as one of whether the imported components retained their 
names after they were assembled into the finished Generation II 
flashlights. The court found ``[t]he constitutive components of the 
Generation II flashlight do not lose their individual names as a 
result [of] the post-importation assembly.'' The court also found 
that the components had a predetermined end-use as parts and 
components of a Generation II flashlight at the time of importation 
and did not undergo a change in use due to the post-importation 
assembly process. Finally, the court did not find the assembly 
process to be sufficiently complex as to constitute a substantial 
transformation. Thus, the court found that Energizer's imported 
components did not undergo a change in name, character, or use as a 
result of the post-importation assembly into a finished Generation 
II flashlight. Virtually all of the components of the Generation II 
flashlight, including the most important component, the LED, were of 
Chinese origin. Accordingly, the court determined that China was the 
correct country of origin of the Generation II flashlights for 
purposes of government procurement.
    In Headquarters Ruling Letter (``HQ'') 734617, dated August 17, 
1993, CBP considered an IV device for administering fluid and found 
that the foreign-made tubing assembly with the U.S.-assembled 
patented pump system in California resulted in a substantial 
transformation and determined the United States to be the country of 
origin. The U.S.-assembled patented pump system performed the 
product's most important function, i.e., to regulate and ensure that 
the proper amount of intravenous medication gets to the patient. 
Notably, more than 75 percent of the value of the finished article 
was attributable to the U.S. operations.
    Additionally, in HQ 734006, dated March 25, 1991, CBP held that 
U.S.-origin components of a medical device used to administer liquid 
nutritional preparations are not substantially transformed by 
assembly in Mexico. The value added in Mexico accounted for less 
than 10 percent of the direct cost of manufacturing the subject 
merchandise, and it contained no materials of Mexican origin. 
Accordingly, CBP determined there was no change in the name, 
character, or use of the assembled components as this process 
constituted a simple assembly.
    In HQ 560613, dated October 28, 1997, CBP held that U.S.-origin 
components were not substantially transformed in Ireland when made 
into a pregnancy test kit. The test kit was made from the following 
U.S. components: top and bottom housing, paper, antibody, wick, 
laminate, and nitrocellulose. In addition, a splash guard from 
Ireland and rayon from Germany were used. The critical components of 
the pregnancy test kit were found to be the three U.S.-origin 
antibodies. CBP recognized that the U.S.-origin components imparted 
the essential character of the pregnancy test kit and that the 
simple assembly of placing the antibodies onto the rayon membrane, 
and subsequent assembly of the strips into a plastic housing did not 
result in a substantial transformation. Lastly, in HQ H035441, dated 
September 11, 2008, CBP found that the assembly and sterilization 
processes performed in Costa Rica to create the LAP-BAND[supreg] 
SYSTEM AP II were relatively simple and, therefore, the

[[Page 22105]]

operations did not result in a substantial transformation of the 
components. See also HQ 561167, dated December 14, 1998.
    In the case at hand, the SDC is patent-protected, and we find 
that it performs the most critical function of the Selec-3 IV 
product, i.e., regulating the drip rate of the fluid being 
administered to the patient. Importantly, the SDC sub-assembly 
consisting of the SDC plus the roller clamp and the spike represents 
the single most significant portion of the cost of materials of the 
Selec-3 IV Product. Here, similar to HQ 734617, the SDC imparts the 
essential character of the Selec-3 IV product because it serves the 
product's most important function. Additionally, sterilization only 
represents a small portion of the total cost of production of the 
subject merchandise. Consistent with HQ H035441, we find that the 
sterilization process should not result in substantial 
transformation.
    Based on the information presented, we find that in Scenarios 
One, Two, and Three, the last substantial transformation occurs in 
the United States and therefore, the Selec-3 IV Product is not a 
product of a foreign country or instrumentality designated pursuant 
to 2511(b) of this title (i.e., China, Vietnam, and Malaysia). As to 
whether the Selec-3 IV Product produced in the United States 
qualifies as a ``U.S.-made end product'' under Scenarios One, Two, 
and Three, you may wish to consult with the relevant government 
procuring agency and review Acetris Health, LLC v. United States, 
949 F.3d 719 (Fed. Cir. 2020). Furthermore, we find that the country 
of origin of the Selec-3 IV Product in Scenarios Four and Five is 
Mexico and, therefore is a product of a foreign country or 
instrumentality designated pursuant to 2511(b) of this title.

Holding

    Based on the information presented, we find that in Scenarios 
One, Two, and Three, the last substantial transformation of the 
Biomedix Selec-3 Multiple Drop Intravenous Product occurs in the 
United States. Furthermore, we find that the country of origin in 
Scenarios Four and Five is Mexico.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 CFR 177.29. Any party-at-interest other 
than the party which requested this final determination may request, 
pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and 
issue a new final determination. Pursuant to 19 CFR 177.30, any 
party-at-interest may, within 30 days of publication of the Federal 
Register Notice referenced above, seek judicial review of this final 
determination before the U.S. Court of International Trade.

Sincerely,

Alice A. Kipel,
Executive Director, Regulations & Rulings, Office of Trade.

[FR Doc. 2025-09320 Filed 5-22-25; 8:45 am]
BILLING CODE 9111-14-P