CBP Rules Medical Devices May Not be Removed from FTZ for Sterilization
Disposable medical devices produced by Becton Dickinson Infusion Therapy Systems (BD) may not be temporarily removed from a foreign trade zone (FTZ) for sterilization, said CBP in a June 21 ruling. The ruling came in response to a request on behalf of BD that CBP determine whether or not BD could temporarily remove devices such as needles, syringes, catheters and cannulas from a FTZ for sterilization purposes without entering the devices for consumption.
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CBP only permits the temporary removal of products from a zone if “the processing does not constitute manufacturing or production and no value is added to the merchandise,” the ruling said. BD argued that sterilization was not a manufacture because none of the processes required any physical change to the devices, only killing unwanted microbes. BD also argued that the 3 percent increase of standard cost applicable to the sterilization should be “considered a de minimis increase in value.”
However, CBP determined that the unsterilized medical devices at hand are contaminated by microbes and would be “wholly unfit” for their intended uses, including “insertion into a body cavity, surgical suturing and injecting fluids into the body.” Under one of the agency’s long-standing definitions, manufacture or production is an operation that “renders a commodity of articles fit for use for which it was otherwise unfit.” The sterilization process renders the imported medical devices as fit for use and consequently can be defined as a manufacture.