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HQ 562012

March 1, 2001

MAR-05 RR:CR:SM 562012 BLS


Ryan Trainer, Esq.
Clifford Chance Rogers & Wells LLP
607 Fourteenth Street, N.W.
Washington, D.C. 20005-2018

RE: Country of origin marking of orthodontic “aligners”

Dear Mr. Trainer:

This is in response to your letter dated October 4, 2000, on behalf of Align Technologies (“Align”), requesting a ruling concerning the country of origin marking of certain orthodontic “aligners.”


You state that Align has developed an orthodontic treatment process for treating adults with minor occlusions. The process will compete with conventional metal dental braces.

Align’s process will use a progressive series of computer-engineered transparent plastic dental appliances called “aligners” to realign a patient’s teeth over a period of one year or more. Each aligner will be used for a two week period. The aligners are intended to be more comfortable and will be less visible than conventional braces. They can be conveniently removed for meals and cleaning, and are intended to provide simpler, more accurate orthodontic treatment in a manner that will require fewer office visits than conventional braces.

Treatment Process

Each month, the orthodontist will examine the patient and install one aligner to be used for two weeks. During the office visit, the orthodontist will fit the patient for the next appliance in the series, which the patient itself will use at home two weeks later to replace the first appliance. During the monthly examination, the orthodontist will also confirm that the patient’s treatment is proceeding according to plan, that both the installed aligner and the fitted replacement are appropriate for the next stages of the treatment process, and that the aligners were properly manufactured. The orthodontist will, as necessary, adjust an individual aligner to correct for minor manufacturing defects or to compensate

for changes in the treatment plan. Two weeks after installing the second aligner, the patient will return to the orthodontist and undergo the same process with the next two aligners until the full set of appliances has been used.

During this treatment process, the orthodontist will hold legal title to all of the aligners, and such legal title will not pass to the patient. Furthermore, the patient will be instructed to destroy each appliance after use. This is necessary to minimize the product liability risks to Align and the orthodontist that might arise if a patient were to have more than one extra aligner at home at a time. If the patient were to keep the used aligners, the patient might become confused as to which aligner to use when it is necessary to replace the aligner installed by the orthodontist during the last office visit. Requiring the patient to destroy all used aligners is also necessary to eliminate the hygienic and safety risks that might arise if a person other than the patient were to attempt to reuse the previously used appliances.

The orthodontist will use aligners in providing orthodontic services to a patient. The orthodontist will pay approximately $1,200 for a full set of 48 aligners. For the full orthodontic services, Align estimates the orthodontist will charge the patient approximately $4,000 - $5,000. Align further understands that the orthodontist will not separately bill the aligners to the patient.

Manufacture of Aligners

A U.S. orthodontist will prepare an impression of the patient’s teeth and prescribe a treatment plan for the patient. The impression will be scanned in the United States into the form of a digital electronic model. The digital model will then be exported to Pakistan where the orthodontist’s treatment plan will be converted into a series of digital electronic models and returned to the United States. Each of these models describes in a digital format the position to which the patient’s teeth will be moved at each two week treatment interval. The progressive models will then be reviewed by Align and the orthodontist for quality control purposes and to confirm that the models comply with the patient’s treatment plan. After that review, the digital electronic models will be used in the United States to produce a series of physical production molds that are sent to Mexico for use in that country to manufacture the progressive series of aligners.

The material to be used in the aligners is a U.S-origin plastic in sheet form that has been specifically developed for this end-use application . The plastic sheet will be exported to Mexico to be formed into finished aligners based on the U.S. 3
produced physical production molds. To the best of Align’s knowledge, no other entity would require plastic material to be produced to the same technical specifications that it requires. As such, the customized materials that will be exported from the U.S. to Mexico would be dedicated for use as aligners. Align believes that the plastic sheets would have no practical or commercial use in any other application.

The full set of finished aligners will then be cleaned and exported to the orthodontist in the U.S. together in one package. Each individual aligner included within this outer package will be separately wrapped in its own inner container. Upon receipt of the aligners, the orthodontist will open both the outer and inner containers to inspect them, make certain adjustments as necessary to correct minor manufacturing defects, and fit the patient for the aligners as described above. When the orthodontist fits the patient for the aligners, he or she will inform the patient that the aligners remain the property of the orthodontist, are not for resale to the patient or anyone else, and must be returned to the orthodontist during the patient’s next office visit.

You are of the opinion that the country of origin of the imported products is the United States, and that accordingly, the aligners are excepted from the marking requirements. In the alternative, should Customs find that Mexico is the country of origin, you believe that the orthodontist is the ultimate purchaser, and, pursuant to an exception to the marking requirements, only the container in which the aligners are packed are required to be marked.


What are the marking requirements for the imported orthodontic products?


Country of Origin

The marking statute, section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304. 4

The country of origin marking requirements for a “good of a NAFTA country” are also determined in accordance with Annex 311 of the NAFTA, as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (December 8, 1993) and the regulations set forth in 19 CFR Parts 102, 134.

Section 134.1(b) (19 CFR §134.1(b)) of the regulations defines “country of origin” as:

The country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin”; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

Section 134.1(j) provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.

Part 102 of the regulations (19 CFR Part 102), sets forth the “NAFTA Marking Rules” for purposes of determining whether a good is a good of a NAFTA country. Section 102.11 of the regulations (19 C.F.R. §102.11) sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) provides that “[t]he country of origin of a good is the country in which:

(1) The good is wholly obtained or produced;

(2) The good is produced exclusively from domestic materials; or

(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied.

“Foreign Material” is defined in section 102.1(e) of the regulations as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.”


Since the imported aligners are neither wholly obtained or produced, nor produced exclusively from domestic (Mexican) materials, section 102.11(a)(3) is the applicable rule which must first be applied. Under this rule, the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20. Section 102.20 of the rules sets forth the specific tariff classification changes and/or other operations which are specifically required in order for country of origin to be determined on the basis of operations performed on the foreign materials contained in a good. Thus, in order to determine whether Mexico is the country of origin under this rule, we must look at those materials whose country of origin is other than Mexico. In this case, the flat plastic sheet which is imported into Mexico for processing is of U.S.-origin (“foreign material” under 19 CFR §102.11(e)) .

It is the opinion of the National Commodity Import Specialist, National Commodity Specialist Division, New York, that when imported into Mexico, the U.S.-origin flat plastic sheets are classifiable in heading 3920, Harmonized Tariff Schedule of the United States (HTSUS), “Other plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials.” When imported into the U.S., the National Commodity Import Specialist believes that the finished aligners are properly classifiable in HTSUS subheading 9021.19.85, which provides for artificial joints and other orthopedic or fracture appliances; parts and accessories thereof... other. The applicable change in tariff classification set out in section 102.20(q), Section XVlIl: Chapters 90 through 92 of the regulations provides:

9021.19 .... A change to subheading 9021.19 from any other subheading, except from nails classified in heading 7317 or screws classified in heading 7318 when resulting from a simple assembly.

Therefore, as the U.S.-origin plastic sheet (foreign material) undergoes the applicable change in tariff classification in Mexico, pursuant to 19 CFR §102.11(a)(3), the country of origin of the imported orthodontic products is Mexico.

Ultimate Purchaser

Section 1304(a)(3)(D), United States Code (19 U.S.C. 1304(a)(3)(D)), provides that articles for which the marking of their containers will reasonably indicate the country of origin of the articles may be excepted from country of origin marking. See also section 134.32(d)) Customs Regulations (19 CFR §134.32(d)). For the exception to apply, Customs must be satisfied that the articles will reach the "ultimate purchaser" in the original, properly marked containers in which the articles were imported. 6

Section 134.1(d), Customs Regulations (19 CFR §134.1(d)), defines the "ultimate purchaser" as generally the last person in the U.S. who will receive the article in the form in which it was imported.

Customs has ruled that under certain circumstances, e.g., when the imported article is given to the recipient as part of a service, the recipient of the article is not the ultimate purchaser. Rather, the ultimate purchaser of the imported article is the one who distributes the article. In Headquarters Ruling Letter (HRL) 559542 (April 24, 1996) Customs ruled that a pesticide servicing company which imported acrolein (a pesticide substance) of German origin into the U.S. was the ultimate purchaser of the imported acrolein, although the pesticide company subsequently, as part of a service contract, either applied the acrolein for its customers (oil field operators) or the customers (irrigation districts and others) applied the pesticide themselves. In that case, Customs found that the pesticide company provided more of a service than just a product, and thus was considered to be the ultimate purchaser of the imported acrolein. Accordingly, the containers used at the customer’s site did not have to be individually marked with the country of origin of the acrolein. In HRL 734232 (November 20, 1991), Customs considered a pharmaceutical drug from Italy, which was packaged in ampules for intravenous use and only dispensed by doctors and nurses. The ultimate purchaser was determined to be the hospital pharmacy and, therefore, it was appropriate that only the 5-pack packages of ampules in which the pharmacy received the drug were marked with the country of origin. See also HRL 734524 dated July 30, 1992, where Customs found an airline to be the ultimate purchaser of frozen meals served to passengers so long as the airline received the meals in bulk with proper marking on the outermost containers in which they were imported.

In the above scenarios, the decision by the customer or patient was to purchase the airline transportation and not the food, or the doctor’s or pesticide company’s expertise and service and not the drug or pesticide. Similarly, the patient of the orthodontist is not purchasing the aligners, but rather the orthodontist’s professional services. It is noted that the cost of the orthodontist’s services which include use of the appliances substantially exceeds the cost of the aligners alone. Furthermore, as noted above, the orthodontist will retain title to the aligners at all times, and will require the patient to destroy used appliances after use. Accordingly, we find that the ultimate purchaser of the aligners is the orthodontist. Provided the orthodontist receives the appliances in a container properly marked with the country of origin, the individual aligners will be excepted from the marking requirements pursuant to 19 U.S.C. 1304(a)(3)(D).



1) Pursuant to 19 CFR §102.11(a)(3), the country of origin of the orthodontic aligners is Mexico.

2) The ultimate purchaser of the aligners is the orthodontist and not the patient of the orthodontist. Therefore, provided that the container in which the orthodontist receives the appliances is properly marked with Mexico as the country of origin, the individual article will be excepted from the marking requirements. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction


John Durant, Director
Commercial Rulings Division

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