80 FR 38718 - Notice of Issuance of Final Determination Concerning Wound Therapy System
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection Federal Register Volume 80, Issue 129 (July 7, 2015)
U.S. Customs and Border Protection
Federal Register Volume 80, Issue 129 (July 7, 2015)
| Page Range | 38718-38721 | |
| FR Document | 2015-16553 |
[Federal Register Volume 80, Number 129 (Tuesday, July 7, 2015)] [Notices] [Pages 38718-38721] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-16553] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF HOMELAND SECURITY U.S. Customs and Border Protection Notice of Issuance of Final Determination Concerning Wound Therapy System 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 the PICO single use negative pressure wound therapy system manufactured and distributed by Smith [[Page 38719]] & Nephew. Based upon the facts presented, CBP has concluded that the United Kingdom will be the country of origin of the PICO single use negative pressure wound therapy system (``PICO NPWT System'') for purposes of U.S. Government procurement. DATES: The final determination was issued on June 30, 2015. 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 August 6, 2015. FOR FURTHER INFORMATION CONTACT: Antonio J. Rivera, Valuation and Special Programs Branch, Regulations and Rulings, Office of International Trade (202) 325-0226. SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 30, 2015 pursuant to subpart B of part 177, U.S. Customs and Border Protection Regulations (19 CFR part 177, subpart B), CBP has issued a final determination concerning the country of origin of the PICO NPWT System manufactured and distributed by Smith & Nephew, which may be offered to the U.S. Government under an undesignated government procurement contract. This final determination, HQ H259473, was issued under procedures set forth at 19 CFR part 177, subpart B, which implements Title III of the Trade Agreement Act of 1979, as amended (19 U.S.C. 2511-18). In the final determination, under the totality of the circumstances, considering the PICO NPWT System's use as a single medical instrument, the origin of the dressings, and the flash programming and final assembly of the pump, which will be performed in the U.K., and will change the pump into a specialized pump that can only be used with its respective dressings, CBP concluded that the country of origin of the PICO NPWT System will be the United Kingdom 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: June 30, 2015. Harold Singer, Acting Executive Director, Regulations and Rulings, Office of International Trade. HQ H259473 June 30, 2015 OT:RR:CTF:VS H259473 AJR CATEGORY: Origin Daniel S. Char, Esq. Associate General Counsel (Commercial) Smith and Nephew, PLC 150 Minuteman Road Andover, MA 01810 RE: Trade Agreements Act; Government Procurement; Country of Origin of the PICO Single Use Negative Pressure Wound Therapy System Dear Mr. Char: This is in response to your letter, dated November 19, 2014, requesting a final determination on behalf of Smith & Nephew, PLC (``Smith & Nephew''), 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 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. This final determination concerns the country of origin of Smith & Nephew's PICO Single Use Negative Pressure Wound Therapy System (``PICO NPWT System''). As the manufacturer and U.S. importer, Smith & Nephew is a party-at-interest within the meaning of 19 CFR 177.22(d)(1) and is entitled to request this final determination. In addition, we have reviewed and grant the request for confidentiality pursuant to 19 CFR 177.2(b)(7), with respect to certain information submitted. FACTS: The PICO NPWT System is a sterile, single-use, complete negative pressure wound therapy system consisting of a pump, two dressings with attached long tube assemblies, and retention strips. It is marketed for use in a sterile operating room environment. Each dressing is applied to the wound and held in place with the retention strips. The long tube assembly is attached to the dressing on one end, and to the PICO pump on the other end, connecting them together. The suction pump pulls air out of the dressing via the long tube assembly, creating negative pressure and drawing excess fluid from the wound into the dressing. The pump is battery powered and delivers 80 mmHg of continuous negative pressure for up to seven days, after which it is programmed to permanently stop working. Consistent with the lifespan of the pump, the dressings provide a total of seven days wear time. The pump in the PICO NPWT System can only be used with the dressings included in the system, and will only be used once by a patient for a specific wound type as the therapy prescribes. The dressings are only sold with the pump and not separately available. Unlike conventional negative pressure systems that use canisters for the collection of wound fluid, the PICO NPWT System is canister-less, which according to your submission means that the components of the PICO NPWT System can only be used together as a system. The pump in the PICO NPWT System consists of: a printed circuit board (``PCB'') assembly that provides pressure measurement and feedback control for the pump; a diaphragm pump and motor that provide airflow to maintain pressure; components such as an internal air path and check valve; a plastic housing; and, batteries. Most of the pump's components are made in China, except for a lightweight pipe, valve and connector made in the U.S., and the batteries. The pump components and subassemblies will be shipped from China to the United Kingdom (``U.K.'') for the remainder of the pump manufacturing process. In the U.K., U.S.-origin firmware, written and validated in the U.S. according to medical device and Food and Drug Administration standards, will be loaded onto the pump at flash programming stations. The flash programming stations are equipped with ``bed of nails'' interfaces, which have discrete electrical conductors that extend and make contact with discrete pads on the PCB assembly. You state that the erasable programmable read-only memory (``EPROM'') on the PCB assembly is actively programmed by sending electric charges through the ``bed of nails'' to the PCB assembly in order to drive the EPROM into receptive mode, and then sending byte by byte to program the EPROM with the unique calibrations and specific parameters required to operate the pump.\1\ You state that this process requires moderate, semi-skilled technicians trained in ``clean-room'' techniques and operating programming fixtures. The pump is then fully assembled by assembling the subassemblies with the case pieces and attaching the battery cover and label, which you state requires low, basic ``box build'' assembly techniques. After assembly, the pump goes through a series of tests to verify calibrated performance of the device, which you state requires moderate, semi-skilled technicians operating test fixtures. --------------------------------------------------------------------------- \1\ You state that, though EPROM is not irreversible, re- programming EPROM requires working through different levels of encryption and the use of specific equipment, which is not readily available. --------------------------------------------------------------------------- You state that the firmware is essential to the function of the pump because the firmware ensures that the pump dispenses the accurate amount of negative pressure. You state that while the components used to manufacture the PICO NPWT System are largely generic (e.g. micro-controllers, small battery powered motors and generic PCB assemblies), it is only when the pump is calibrated and then flashed with specific firmware that it becomes a true medical device, as the flashing enables the pump to deliver calibrated, therapeutic negative pressure levels to the wound. [[Page 38720]] You state that the material, labor, and overhead costs of the PICO NPWT System are broken down per country as follows: [XXXX]% from the pump and battery production in China, [XXXX]% from flashing and final assembly in the U.K., and the remaining [XXXX]% \2\ mainly from the U.K. --------------------------------------------------------------------------- \2\ [XXXX]% derives from the production of the dressing in the U.K. Aside from [XXXX]% for primary sterile barrier costs from both the U.K. and [XXXX], the remaining costs will be incurred in the U.K. --------------------------------------------------------------------------- The dressings are manufactured in the U.K., with materials of U.K. and Canadian origin,\3\ to produce a four-layer dressing that consists of: (1) a high moisture vapor transfer rate (``MTVR'') film to allow for transpiration of the wound fluid; (2) a superabsorbent layer to hold the fluid; (3) an airlock layer to ensure consistent delivery of negative pressure from the pump to the wound bed; and, (4) an adhesive layer to maintain an effective seal around the dressing and prevent trauma. The manufacturing operations to produce the dressings involve extruding medical grade film, perforating the adhesive layer to ensure breathability of the dressing, and then shaping, cutting and laminating together the layers of the dressing. The four-layer dressing is then connected to a long tube assembly, which is also manufactured in the U.K. from U.K.-origin materials. The dressings and pumps are then sterilized, separately sealed, packed, and then re-sterilized. Once the PICO NPWT System is received by its user, the user will connect the pump to the dressing by the attached long tube assembly. --------------------------------------------------------------------------- \3\ All of the layers, except for the super-absorbent layer that is from Canada, are from the U.K. --------------------------------------------------------------------------- You state that a majority of the essential therapeutic elements for wound healing are delivered via the unique dressing. You state that the dressing is the fundamental ``enabling technology,'' as the combination of layers work together to: manage the wound fluid; ensure consistent delivery of negative pressure from the pump to the wound bed (stimulating blood vessel and cell growth); and, maintain an optimal environment for wound healing by protecting the wound from outside contaminants and limiting disruption of the wound bed, which allows for the formation of granulation tissue. The PICO NPWT System is imported into the United States packaged for retail sale. Its main components, the pump and the dressings, are not assembled together and must be connected to each other by the user after the dressing is secured to the patient with the retention strips. You state that, as imported, the PICO NPWT System is classified in subheading 9018.90.80, Harmonized Tariff Schedule of the United States (``HTSUS''), as a medical instrument. You also state that it is described by two of the American Medical Association Current Procedural Terminology (``CPT'') codes, G0456 and G0457, which provide for: ``negative pressure wound therapy (e.g. vacuum assisted drainage collection) using a [. . .] device, not durable medical equipment, including provision of [. . .] dressing(s), topical application(s), wound assessment, and instructions for ongoing care, per session.'' According to your submission, the difference in the codes is based on the description of the size of the wound to be treated. ISSUE: What is the country of origin of the PICO NPWT System for purposes of U.S. Government procurement? 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 distinct from that of the article or articles from which it was so transformed. See also 19 CFR 177.22(a). In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int'l Trade 1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. 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. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd 702 F. 2d 1022 (Fed. Cir. 1983). 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. In this case, the PICO NPWT System is comprised of the pump and the dressings. These two components are attached to each other by the user and together, these two components are used as one product to extract fluid from the wound. The four-layer dressing is manufactured in the U.K. by combining MTVR film from the U.K. to allow for transpiration of the wound fluid, a superabsorbent layer from Canada to hold the fluid, an airlock layer from the U.K. to ensure consistent delivery of negative pressure from the pump to the wound bed, and an adhesive layer from the U.K. to effectively seal the dressing. The long tube assembly, which is produced in the U.K. from U.K. materials, is adhered to the dressing in the U.K. and is later connected by the user to the pump to create a one-way vacuum via a unique taper-lock connector that ensures the pump and dressing can only connect to each other and not to other medical connectors. The pump is as important as the dressing in allowing negative pressure to be created and to enable fluid to be drawn from the wound. Therefore, the additional processes performed on the pump component are necessary in order to find that the PICO NPWT System is a product of the U.K. You argue that the PICO NPWT System should be considered a product of the U.K. because the U.K is the country of origin of the dressings, and that although the pump components and subassemblies will be made in China, the pump will be flash programmed with firmware and the final assembly of the pump will take place in the U.K. You state that the pump will be programmed with U.S.-origin firmware at flash programming stations equipped with ``bed of nails'' interfaces, which have discrete electrical conductors that extend from the ``bed of nails'' and make contact with discrete pads on the PCB assembly.\4\ You state that the EPROM is actively programmed because this process sends electric charges through the ``bed of nails'' to the PCB assembly in order to drive the EPROM into receptive mode, and then sends byte by byte to program the EPROM with the unique calibrations and specific parameters required to operate the pump.\5\ You state that, though the EPROM is not irreversible, re-programming the EPROM requires working through different levels of [[Page 38721]] encryption and the use of specific equipment, which is not readily available.\6\ Accordingly, you state that only when the pump is calibrated and flashed with specific firmware, it becomes a true medical device, as the flashing enables the pump to deliver calibrated, therapeutic negative pressure levels to the wound. In support of your positions you cite Headquarters Ruling (``HQ'') H034843, dated May 5, 2009; and HQ 968000, dated February 14, 2006. --------------------------------------------------------------------------- \4\ ``Bed of nails'' refers to a traditional electronic fixture with numerous pins extending from the fixture to make contact with points on a PCB. Pressing a PCB against a ``bed of nails'' interface allows the PCB to be directly accessed for programming. See Michael J. Smith, Why Program Devices at In-Circuit Test?, Evaluation Engineering, at http://www4.evaluationengineering.com/articles/201110/why-program-devices-at-in-circuit-test.php (specifically the ``bed of nails'' explanation); see also ``In-Circuit Test,'' Wikipedia, at http://en.wikipedia.org/wiki/In-circuit_test (only with reference to ``Bed of Nails tester'' section). \5\ EPROM refers to a non-volatile memory that retains its contents until it is exposed to ultraviolet light, and it is programmed by using a specialized machine to force an electric charge that sends bits of the EPROM onto a PCB. See G. Groeseneken, et al., Basics of Nonvolatile Semiconductor Memory Devices, 25-28, at http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.111.9431&rep=rep1&type=pdf; see also Integrated Circuit Engineering Corporation, ROM, EPROM, and EEPROM Technology, 4-9, at https://web.eecs.umich.edu/~prabal/teaching/eecs373-f10/ readings/rom-eprom-eeprom-technology.pdf. \6\ EPROM is not easily reprogrammed because, even when the reprogramming change is minimal, the process requires erasing the memory by exposing the EPROM to ultraviolet light, and then reprogramming it byte by byte. See id. --------------------------------------------------------------------------- HQ H034843 concerned the country of origin of USB flash drives that used software and firmware developed in Israel and an assembly process that began in China and ended in Israel or the United States. CBP noted that the assembly in Israel or the United States, mainly the installation and customization of the firmware and software, made the USB flash drives functional, permitted them to execute their security features, and increased their value. Therefore, the USB flash drives were substantially transformed in the countries where these operations took place, making the country of origin for the USB flash drives either Israel or the United States. In HQ 968000, CBP ruled that the country of origin for marking purposes of a fabric switch for storage area networks was the United States. The assembly of the hardware for the switch occurred in China. Then, the resulting electromechanical assembly was shipped to the United States, where U.S.-origin software was installed, configured, and tested. See also Data General v. United States, 4 Ct. Int'l Trade 182 (1982). As in HQ H034843 and HQ 968000, the firmware will be installed in a different country from where the majority of the product is assembled, thereby imparting the product (here, the pump) with an essential and required feature (here, enabling the pump to operate as a unique medical device). However, despite these similarities, HQ H034843 and HQ 968000 concerned a USB flash drive and a switch for network storage, which are instruments primarily associated with computer-related products, while in this case the product is primarily a medical instrument and serves separate functions apart from the programmed capabilities. For instance, in HQ H215657, dated April 29, 2013, CBP held that a flashlight originated from China despite the fact that it was programmed in the U.S. with U.S. software. HQ H215657 explained that the programming was not essential to the basic operation of the flashlight, as it only enhanced how the flashlight operated, without changing its fundamental nature. Though such programming provided the flashlight with some additional features, CBP held that the programming was not sufficiently complex to change the identity or characterize the device. Nonetheless, to the extent that the programming process in the U.K. is integrated with the U.K.-origin dressing to produce a specific-use medical device, we find that the last substantial transformation of the PICO NPWT System occurs in the U.K. The unique dressing is the ``enabling technology'' that provides the essential therapeutic elements for wound healing (e.g. fluid management, protecting against contaminants, and limiting wound bed disruption) to the instrument. Furthermore, the programmed pressure calibrations are critical to the pump's function as a medical device, and can only tolerate a small margin for error since any programming error would devalue the pump for medical purposes and require correction via a difficult reprogramming technique. Based on the information in your request, under the totality of the circumstances, considering the PICO NPWT System's use as a single medical instrument, the origin of the dressings, and the flash programming and final assembly of the pump, which will be performed in the U.K, and will change the pump into a specialized pump that can only be used with its respective dressings, we find that the country of origin of the PICO NPWT System will be the United Kingdom for purposes of U.S. Government procurement. HOLDING: Based on the facts in this case, we find that the country of origin of the PICO NPWT System will be the United Kingdom for purposes of U.S. Government procurement. 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 Court of International Trade. Sincerely, Harold Singer, Acting Executive Director Regulations and Rulings Office of International Trade [FR Doc. 2015-16553 Filed 7-6-15; 8:45 am] BILLING CODE 9111-14-P
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Selection of Interventions for Review delivered as intended to the program’s learning environment for all
SAMHSA will select interventions for or practice’s target population). stakeholders. SAMHSA recognizes that
The methodological rigor (that is, the successful promotion and
review from among submissions
internal validity, statistical validity, and dissemination of evidence-based
meeting the minimum requirements. In
measurement validity) of the research programs and practices requires an
selecting interventions for review,
for each program or practice will be environment that promotes community
SAMHSA may give special
reviewed, as it pertains to each outcome assessment, program and practice
consideration to interventions that meet
examined, along with the magnitude planning and evaluation, as well as
one or more of the following conditions:
and direction of the program’s or guidance on the selection and
• More than one research study or
practice’s effect on each outcome. Based implementation of programs and
evaluation has been conducted on the
on this information, the program’s or practices listed on NREPP. There are
same or a similar target population that
practice’s effectiveness for each useful types of evaluation research,
meets the minimum requirements. outcome will be rated, along with the often conducted among underserved
• The intervention targets
rigor of the research examining the populations, which provide valuable
underserved populations (e.g., minority program or practice, and the ratings will insights for practitioners, but do not
populations, tribal communities or be displayed on the NREPP Web site. meet the minimum criteria required for
American Indian/Alaska Native In general, each NREPP evidence experimental or quasi-experimental
populations, elderly individuals, young review will be conducted by two trained design. SAMHSA intends the Learning
adults, individuals who are and certified reviewers. However, based Center to be a forum for presenting
incarcerated, etc.). on funding and available resources, research on emerging programs and
• Dissemination and implementation SAMHSA use one reviewer for programs practices, and exploring ways that pre-
materials (e.g., program or practice and practices being re-reviewed. When experimental and qualitative research
manuals, training guides, measurement necessary, NREPP may conduct author can complement and enrich findings
instruments, implementation fidelity queries to confirm or gather additional from experimental and quasi-
tools) are available. Lower costs and no- information needed for the review. experimental research designs. An
cost materials may be prioritized. Program and practice profiles will be inventory of such programs and
• The intervention contributes to a developed on the basis of the practices will be compiled and
content area in which few evidence- information gathered. Applicants will maintained within the Learning Center
based interventions have been have the opportunity to review the and will operate in parallel to the listing
previously identified. program or practice profile before it is of reviewed programs and practices
Interventions that are not selected for posted on the NREPP site, but they will with experimental and quasi-
review may be resubmitted by the not have the option to refuse posting. experimental designs. In this way,
applicant in a future open submission Dissemination and implementation SAMHSA intends to support programs
period. materials will no longer be rated as they and practices researched with the most
The Review Process were historically. Instead, descriptions rigorous approaches while also
of available materials for each program supporting the development of practice-
The review process has been revised or practice, highlighting information based evidence, especially for certain
to improve the quality of the reviews that may be of most interest to NREPP populations and emerging practices that
and utility of information that NREPP users, will be included in the program are critical to learning and improving
can provide its users. In addition to or practice profile, along with behavioral health outcomes for persons
articles and reports submitted by NREPP information documenting the extent to with or at risk of developing behavioral
applicants, additional studies, articles, which materials are available. health issues.
and evaluation reports regarding the Programs and practices currently
interventions will be identified through Summer King,
posted on NREPP will be re-reviewed as
literature searches. Studies and time and resources permit but the re- Statistician.
outcomes to be reviewed will be reviews of currently posted programs [FR Doc. 2015–16573 Filed 7–6–15; 8:45 am]
determined through the systematic and practices will take place over the BILLING CODE 4162–20–P
application of standardized screening next few years.
criteria, and the number of studies and Detailed information about the
outcomes to be reviewed will be revised review process will be available DEPARTMENT OF HOMELAND
expanded to more comprehensively at http://www.nrepp.samhsa.gov after SECURITY
represent the evidence base for the the re-launch of the new NREPP Web
program or practice. Inclusion of studies site. U.S. Customs and Border Protection
and outcomes will no longer be limited
to positive significant outcomes; all Enhancing the Learning Center Notice of Issuance of Final
studies and outcomes that meet the NREPP’s Learning Center is a Determination Concerning Wound
standardized screening criteria will be developing and underutilized Therapy System
reviewed, including those with negative component of the NREPP Web site. With AGENCY: U.S. Customs and Border
and non-significant effects. Programs the evolution and enhancement of the Protection, Department of Homeland
and practices will be assessed on the registry, SAMHSA seeks to bring greater Security.
basis of evaluation studies of program or recognition to both rigorously evaluated ACTION: Notice of final determination.
practice impact, information related to behavioral health interventions and
tkelley on DSK3SPTVN1PROD with NOTICES
conceptual framework (that is, program those interventions that have been SUMMARY: This document provides
or practice goals, theory of change, and implemented, demonstrate promise, but notice that U.S. Customs and Border
program or practice components), and have not necessarily been evaluated in Protection (‘‘CBP’’) has issued a final
information about implementation a rigorous manner. To that end, the determination concerning the country of
fidelity (that is, whether a study Learning Center is being significantly origin of the PICO single use negative
employs quality assurance measures to revamped to support stakeholder pressure wound therapy system
declare that the program or practice is engagement and to become a shared manufactured and distributed by Smith
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![38720 Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
You state that the material, labor, and submission, the difference in the codes is These two components are attached to each
overhead costs of the PICO NPWT System are based on the description of the size of the other by the user and together, these two
broken down per country as follows: wound to be treated. components are used as one product to
[XXXX]% from the pump and battery ISSUE: extract fluid from the wound. The four-layer
production in China, [XXXX]% from flashing dressing is manufactured in the U.K. by
and final assembly in the U.K., and the What is the country of origin of the PICO combining MTVR film from the U.K. to allow
remaining [XXXX]% 2 mainly from the U.K. NPWT System for purposes of U.S. for transpiration of the wound fluid, a
The dressings are manufactured in the Government procurement? superabsorbent layer from Canada to hold the
U.K., with materials of U.K. and Canadian LAW AND ANALYSIS: fluid, an airlock layer from the U.K. to ensure
origin,3 to produce a four-layer dressing that Pursuant to Subpart B of Part 177, 19 CFR consistent delivery of negative pressure from
consists of: (1) a high moisture vapor transfer 177.21 et seq., which implements Title III of the pump to the wound bed, and an adhesive
rate (‘‘MTVR’’) film to allow for transpiration the Trade Agreements Act of 1979, as layer from the U.K. to effectively seal the
of the wound fluid; (2) a superabsorbent layer amended (19 U.S.C. 2511 et seq.), CBP issues dressing. The long tube assembly, which is
to hold the fluid; (3) an airlock layer to country of origin advisory rulings and final produced in the U.K. from U.K. materials, is
ensure consistent delivery of negative determinations as to whether an article is or adhered to the dressing in the U.K. and is
pressure from the pump to the wound bed; would be a product of a designated country later connected by the user to the pump to
and, (4) an adhesive layer to maintain an or instrumentality for the purposes of create a one-way vacuum via a unique taper-
effective seal around the dressing and granting waivers of certain ‘‘Buy American’’ lock connector that ensures the pump and
prevent trauma. The manufacturing restrictions in U.S. law or practice for dressing can only connect to each other and
operations to produce the dressings involve products offered for sale to the U.S. not to other medical connectors. The pump
extruding medical grade film, perforating the Government. is as important as the dressing in allowing
adhesive layer to ensure breathability of the Under the rule of origin set forth under 19 negative pressure to be created and to enable
dressing, and then shaping, cutting and U.S.C. 2518(4)(B): fluid to be drawn from the wound. Therefore,
laminating together the layers of the dressing. An article is a product of a country or the additional processes performed on the
The four-layer dressing is then connected to instrumentality only if (i) it is wholly the pump component are necessary in order to
a long tube assembly, which is also growth, product, or manufacture of that find that the PICO NPWT System is a product
manufactured in the U.K. from U.K.-origin country or instrumentality, or (ii) in the case of the U.K.
materials. The dressings and pumps are then of an article which consists in whole or in You argue that the PICO NPWT System
sterilized, separately sealed, packed, and part of materials from another country or should be considered a product of the U.K.
then re-sterilized. Once the PICO NPWT instrumentality, it has been substantially because the U.K is the country of origin of
System is received by its user, the user will transformed into a new and different article the dressings, and that although the pump
connect the pump to the dressing by the of commerce with a name, character, or use components and subassemblies will be made
attached long tube assembly. distinct from that of the article or articles in China, the pump will be flash programmed
You state that a majority of the essential from which it was so transformed. with firmware and the final assembly of the
therapeutic elements for wound healing are See also 19 CFR 177.22(a). pump will take place in the U.K. You state
delivered via the unique dressing. You state In determining whether the combining of that the pump will be programmed with U.S.-
that the dressing is the fundamental parts or materials constitutes a substantial origin firmware at flash programming
‘‘enabling technology,’’ as the combination of transformation, the determinative issue is the stations equipped with ‘‘bed of nails’’
layers work together to: manage the wound extent of operations performed and whether interfaces, which have discrete electrical
fluid; ensure consistent delivery of negative the parts lose their identity and become an conductors that extend from the ‘‘bed of
pressure from the pump to the wound bed integral part of the new article. Belcrest nails’’ and make contact with discrete pads
(stimulating blood vessel and cell growth); Linens v. United States, 573 F. Supp. 1149 on the PCB assembly.4 You state that the
and, maintain an optimal environment for (Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368 EPROM is actively programmed because this
wound healing by protecting the wound from (Fed. Cir. 1984). Assembly operations that are process sends electric charges through the
outside contaminants and limiting disruption minimal or simple, as opposed to complex or ‘‘bed of nails’’ to the PCB assembly in order
of the wound bed, which allows for the meaningful, will generally not result in a to drive the EPROM into receptive mode, and
formation of granulation tissue. substantial transformation. See C.S.D. 80– then sends byte by byte to program the
The PICO NPWT System is imported into 111, C.S.D. 85–25, C.S.D. 89–110, C.S.D. 89– EPROM with the unique calibrations and
the United States packaged for retail sale. Its 118, C.S.D. 90–51, and C.S.D. 90–97. If the specific parameters required to operate the
main components, the pump and the manufacturing or combining process is a pump.5 You state that, though the EPROM is
dressings, are not assembled together and minor one which leaves the identity of the not irreversible, re-programming the EPROM
must be connected to each other by the user article intact, a substantial transformation has requires working through different levels of
after the dressing is secured to the patient not occurred. Uniroyal, Inc. v. United States,
with the retention strips. You state that, as 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d 4 ‘‘Bed of nails’’ refers to a traditional electronic
imported, the PICO NPWT System is 702 F. 2d 1022 (Fed. Cir. 1983). fixture with numerous pins extending from the
classified in subheading 9018.90.80, In order to determine whether a substantial fixture to make contact with points on a PCB.
Harmonized Tariff Schedule of the United transformation occurs when components of Pressing a PCB against a ‘‘bed of nails’’ interface
States (‘‘HTSUS’’), as a medical instrument. various origins are assembled into completed allows the PCB to be directly accessed for
You also state that it is described by two of products, CBP considers the totality of the programming. See Michael J. Smith, Why Program
circumstances and makes such Devices at In-Circuit Test?, Evaluation Engineering,
the American Medical Association Current at http://www4.evaluationengineering.com/articles/
Procedural Terminology (‘‘CPT’’) codes, determinations on a case-by-case basis. The
201110/why-program-devices-at-in-circuit-test.php
G0456 and G0457, which provide for: country of origin of the item’s components,
(specifically the ‘‘bed of nails’’ explanation); see
‘‘negative pressure wound therapy (e.g. extent of the processing that occurs within a also ‘‘In-Circuit Test,’’ Wikipedia, at http://
vacuum assisted drainage collection) using a country, and whether such processing en.wikipedia.org/wiki/In-circuit_test (only with
[. . .] device, not durable medical renders a product with a new name, reference to ‘‘Bed of Nails tester’’ section).
equipment, including provision of [. . .] character, and use are primary considerations 5 EPROM refers to a non-volatile memory that
dressing(s), topical application(s), wound in such cases. Additionally, factors such as retains its contents until it is exposed to ultraviolet
assessment, and instructions for ongoing the resources expended on product design light, and it is programmed by using a specialized
care, per session.’’ According to your and development, the extent and nature of machine to force an electric charge that sends bits
post-assembly inspection and testing of the EPROM onto a PCB. See G. Groeseneken, et
tkelley on DSK3SPTVN1PROD with NOTICES
procedures, and worker skill required during al., Basics of Nonvolatile Semiconductor Memory
2 [XXXX]% derives from the production of the
the actual manufacturing process will be Devices, 25–28, at http://citeseerx.ist.psu.edu/
dressing in the U.K. Aside from [XXXX]% for viewdoc/download?doi=10.1.1.111.9431&rep=rep1
primary sterile barrier costs from both the U.K. and considered when determining whether a &type=pdf; see also Integrated Circuit Engineering
[XXXX], the remaining costs will be incurred in the substantial transformation has occurred. No Corporation, ROM, EPROM, and EEPROM
U.K. one factor is determinative. Technology, 4–9, at https://web.eecs.umich.edu/
3 All of the layers, except for the super-absorbent In this case, the PICO NPWT System is ∼prabal/teaching/eecs373-f10/readings/rom-eprom-
layer that is from Canada, are from the U.K. comprised of the pump and the dressings. eeprom-technology.pdf.
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![Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices 38721
encryption and the use of specific of the PICO NPWT System occurs in the U.K. Elevation (BFE), base flood depth,
equipment, which is not readily available.6 The unique dressing is the ‘‘enabling Special Flood Hazard Area (SFHA)
Accordingly, you state that only when the technology’’ that provides the essential boundary or zone designation, or
pump is calibrated and flashed with specific therapeutic elements for wound healing (e.g.
firmware, it becomes a true medical device,
regulatory floodway on the Flood
fluid management, protecting against
as the flashing enables the pump to deliver contaminants, and limiting wound bed Insurance Rate Maps (FIRMs), and
calibrated, therapeutic negative pressure disruption) to the instrument. Furthermore, where applicable, in the supporting
levels to the wound. In support of your the programmed pressure calibrations are Flood Insurance Study (FIS) reports for
positions you cite Headquarters Ruling critical to the pump’s function as a medical the communities listed in the table
(‘‘HQ’’) H034843, dated May 5, 2009; and HQ device, and can only tolerate a small margin below. The purpose of this notice is to
968000, dated February 14, 2006. for error since any programming error would seek general information and comment
HQ H034843 concerned the country of devalue the pump for medical purposes and regarding the preliminary FIRM, and
origin of USB flash drives that used software require correction via a difficult
and firmware developed in Israel and an where applicable, the FIS report that the
reprogramming technique.
assembly process that began in China and Federal Emergency Management Agency
Based on the information in your request,
ended in Israel or the United States. CBP under the totality of the circumstances, (FEMA) has provided to the affected
noted that the assembly in Israel or the considering the PICO NPWT System’s use as communities. The FIRM and FIS report
United States, mainly the installation and a single medical instrument, the origin of the are the basis of the floodplain
customization of the firmware and software, dressings, and the flash programming and management measures that the
made the USB flash drives functional, final assembly of the pump, which will be community is required either to adopt
permitted them to execute their security performed in the U.K, and will change the
features, and increased their value.
or to show evidence of having in effect
pump into a specialized pump that can only in order to qualify or remain qualified
Therefore, the USB flash drives were be used with its respective dressings, we find
substantially transformed in the countries for participation in the National Flood
that the country of origin of the PICO NPWT
where these operations took place, making Insurance Program (NFIP). In addition,
System will be the United Kingdom for
the country of origin for the USB flash drives purposes of U.S. Government procurement. the FIRM and FIS report, once effective,
either Israel or the United States. will be used by insurance agents and
In HQ 968000, CBP ruled that the country HOLDING:
others to calculate appropriate flood
of origin for marking purposes of a fabric Based on the facts in this case, we find that insurance premium rates for new
switch for storage area networks was the the country of origin of the PICO NPWT
United States. The assembly of the hardware
buildings and the contents of those
System will be the United Kingdom for
for the switch occurred in China. Then, the buildings.
purposes of U.S. Government procurement.
resulting electromechanical assembly was Notice of this final determination will be DATES: Comments are to be submitted
shipped to the United States, where U.S.- given in the Federal Register, as required by on or before October 5, 2015
origin software was installed, configured, and 19 CFR 177.29. Any party-at-interest other
tested. See also Data General v. United ADDRESSES: The Preliminary FIRM, and
than the party which requested this final
States, 4 Ct. Int’l Trade 182 (1982). determination may request, pursuant to 19 where applicable, the FIS report for
As in HQ H034843 and HQ 968000, the CFR 177.31, that CBP reexamine the matter each community are available for
firmware will be installed in a different anew and issue a new final determination. inspection at both the online location
country from where the majority of the Pursuant to 19 CFR 177.30, any party-at- and the respective Community Map
product is assembled, thereby imparting the interest may, within 30 days of publication Repository address listed in the tables
product (here, the pump) with an essential of the Federal Register Notice referenced below. Additionally, the current
and required feature (here, enabling the above, seek judicial review of this final
pump to operate as a unique medical device).
effective FIRM and FIS report for each
determination before the Court of community are accessible online
However, despite these similarities, HQ International Trade.
H034843 and HQ 968000 concerned a USB through the FEMA Map Service Center
flash drive and a switch for network storage, Sincerely, at www.msc.fema.gov for comparison.
which are instruments primarily associated Harold Singer, Acting Executive You may submit comments, identified
with computer-related products, while in this by Docket No. FEMA–B–1515, to Luis
Director
case the product is primarily a medical Rodriguez, Chief, Engineering
instrument and serves separate functions
Regulations and Rulings
Office of International Trade Management Branch, Federal Insurance
apart from the programmed capabilities. For
instance, in HQ H215657, dated April 29, [FR Doc. 2015–16553 Filed 7–6–15; 8:45 am]
and Mitigation Administration, FEMA,
2013, CBP held that a flashlight originated 500 C Street SW., Washington, DC
BILLING CODE 9111–14–P
from China despite the fact that it was 20472, (202) 646–4064, or (email)
programmed in the U.S. with U.S. software. Luis.Rodriguez3@fema.dhs.gov.
HQ H215657 explained that the programming DEPARTMENT OF HOMELAND FOR FURTHER INFORMATION CONTACT: Luis
was not essential to the basic operation of the Rodriguez, Chief, Engineering
SECURITY
flashlight, as it only enhanced how the
flashlight operated, without changing its
Management Branch, Federal Insurance
fundamental nature. Though such
Federal Emergency Management and Mitigation Administration, FEMA,
programming provided the flashlight with Agency 500 C Street SW., Washington, DC
some additional features, CBP held that the [Docket ID FEMA–2015–0001; Internal 20472, (202) 646–4064, or (email)
programming was not sufficiently complex to Agency Docket No. FEMA–B–1515] Luis.Rodriguez3@fema.dhs.gov; or visit
change the identity or characterize the the FEMA Map Information eXchange
device. Proposed Flood Hazard (FMIX) online at
Nonetheless, to the extent that the Determinations www.floodmaps.fema.gov/fhm/fmx_
programming process in the U.K. is
integrated with the U.K.-origin dressing to
main.html.
AGENCY: Federal Emergency
tkelley on DSK3SPTVN1PROD with NOTICES
produce a specific-use medical device, we Management Agency, DHS. SUPPLEMENTARY INFORMATION: FEMA
find that the last substantial transformation proposes to make flood hazard
ACTION: Notice.
determinations for each community
6 EPROM is not easily reprogrammed because,
SUMMARY: Comments are requested on listed below, in accordance with section
even when the reprogramming change is minimal,
the process requires erasing the memory by
proposed flood hazard determinations, 110 of the Flood Disaster Protection Act
exposing the EPROM to ultraviolet light, and then which may include additions or of 1973, 42 U.S.C. 4104, and 44 CFR
reprogramming it byte by byte. See id. modifications of any Base Flood 67.4(a).
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Document Created: 2015-12-15 13:27:29
Document Modified: 2015-12-15 13:27:29
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice of final determination. | |
| Dates | The final determination was issued on June 30, 2015. 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 August 6, 2015. | |
| Contact | Antonio J. Rivera, Valuation and Special Programs Branch, Regulations and Rulings, Office of International Trade (202) 325-0226. | |
| FR Citation | 80 FR 38718 |
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