Medical Devices

From simple tools like thermometers to complex imaging systems and implantable devices, the medical device industry plays a critical role in improving patient outcomes and enhancing the quality of healthcare globally. With rapid technological advancements and increasing demand for innovative healthcare solutions, adhering to regulatory requirements is vital to meet the evolving needs of the medical industry.  

In the U.S., medical devices are regulated by the Food and Drug Administration (FDA) under the Federal Food, Drug, and Cosmetic Act. The FDA categorizes devices into three classes (Class I, II, and III) based on their risk level, with Class III devices being subject to the most rigorous regulations. Ensuring products are registered and compliant with FDA regulations, which include premarket notification (510(k)), premarket approval (PMA), and adherence to Good Manufacturing Practices (GMP) is essential.  

U.S. Customs and Border Protection (CBP) enforces regulations for importers which include proper classification, valuation, and marking of imported devices. Custom tariffs can impact the cost of raw materials, components, and finished products, influencing pricing strategies and market competitiveness. As the global landscape continues to evolve, it is essential to navigate the challenges and opportunities within this critical industry. 

Representative Experience

• Successfully obtaining multiple exclusions from Section 301 tariffs on Chinese-origin goods for a large manufacturer of medical devices.
• Advising a medical device company on compliance with CBP import regulations and FDA medical device registration requirements.
• Obtaining favorable CBP country of origin rulings for medical devices to support non-application of Section 301 duties.
• Conducting due diligence reviews to determine export control and sanctions risks on behalf of a non-profit medical association.

Medical Devices Trade & Export Law FAQs

1. Are medical devices subject to U.S. export controls?

Yes. Medical devices, related components, software, and technology may be subject to U.S. export controls administered by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) under the Export Administration Regulations (EAR). The EAR specifically defines “medical devices” by reference to the Federal Food, Drug, and Cosmetic Act, and certain components and spare parts incorporated into medical devices may be separately controlled on the Commerce Control List (CCL).

Many commercial medical devices are classified as EAR99, meaning they are not specifically listed on the CCL. However, an EAR99 classification does not mean that a device can be exported without restriction. Licensing requirements may still apply depending on the destination, end user, or intended end use. Medical devices incorporating controlled electronics, sensors, lasers, encryption, advanced computing functionality, or other controlled technology may have stricter controls and fall under a specific Export Control Classification Number (ECCN).

Most medical devices would be under the jurisdiction of the EAR, but medical device companies that supply products to the U.S. Department of Defense or foreign military customers should evaluate whether their products have military-specific functionality or incorporate ITAR-controlled components or technical data that could trigger ITAR controls. Jurisdiction and classification should be determined before exporting products or sharing controlled technical information with foreign persons.

2. What export compliance issues arise with software and connected medical devices?

Modern medical devices increasingly incorporate software, wireless connectivity, cybersecurity functionality, cloud services, and encryption. These features can create export control considerations that may not be apparent from the physical device itself. Under the EAR, certain encryption hardware, software, and technology are specifically controlled, and exports, reexports, or transfers may be subject to classification, reporting, license exception, or licensing requirements.

Companies should therefore consider export controls not only when shipping a physical medical device internationally, but also when providing software downloads, firmware updates, remote technical support, source code, technical documentation, or access to controlled technology. Similar issues can arise when foreign-national employees or contractors obtain access to certain controlled technology in the United States.

3. What U.S. requirements apply when importing medical devices?

Medical devices imported into the United States are generally subject to requirements administered by both U.S. Customs and Border Protection (CBP) and the U.S. Food and Drug Administration (FDA). FDA verifies compliance with applicable medical device requirements when products are imported or offered for import, and products that do not satisfy applicable FDA requirements may be detained at the border.

Importers must also address traditional customs requirements, including proper tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS), valuation, country-of-origin determination and marking, entry documentation, and applicable duties and tariffs. Because medical devices frequently contain components manufactured in multiple countries, determining the correct country of origin can require careful analysis of where and how the finished product was manufactured.

4. Are medical devices subject to U.S. tariffs and special duties?

Yes. Although certain medical products may qualify for duty-free treatment under the HTSUS, medical devices, components, and manufacturing inputs can also be subject to ordinary customs duties and additional tariffs imposed under authorities such as Sections 232 and 301 of the Trade Act or other trade measures.

Companies should review the tariff classification and country of origin of both finished devices and major components rather than assuming that all medical products receive preferential treatment. Changes to supply chains, manufacturing locations, or component sourcing can alter a product’s tariff exposure. Importers should also evaluate whether available exclusions, special tariff provisions, free trade agreements, or other duty-saving strategies apply.

5. Do OFAC sanctions prohibit selling medical devices to sanctioned countries?

Not necessarily, but transactions involving sanctioned jurisdictions require careful review. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers sanctions programs that restrict transactions involving certain countries, governments, entities, and individuals. OFAC has issued general licenses and other humanitarian authorizations under several sanctions programs that permit certain transactions involving medicine and medical devices that might otherwise be prohibited.

These humanitarian authorizations are not blanket exemptions from sanctions. Their scope and conditions vary by sanctions program, and restrictions may continue to apply based on the parties involved, financial institutions used, product involved, destination, or end use. For example, OFAC has issued specific guidance addressing authorized trade in medical devices involving Iran while continuing to impose restrictions on transactions involving certain blocked persons and other prohibited activities.

Medical device companies should also evaluate BIS licensing requirements for exports, reexports, or transfers to certain restricted countries, even where the product may appear to be commercially available or used for humanitarian purposes. Depending on the item, destination, end user, and end use, companies should assess whether any EAR medical-related license exceptions or authorizations may apply and document the basis for relying on them.

6. What sanctions screening should medical device companies conduct?

Medical device companies engaged in international business should maintain risk-based screening procedures for customers, distributors, hospitals, purchasing organizations, freight forwarders, banks, and other parties to transactions. Screening should address OFAC’s Specially Designated Nationals and Blocked Persons (“SDN”) List as well as applicable export-control restricted-party lists.

Companies should also consider ownership, intermediaries, and the ultimate destination and end user of their products. A transaction may create sanctions exposure even when the immediate customer is not listed if the customer is owned by blocked persons, if an intermediary is sanctioned, or if the products are being diverted to a restricted destination or end user. Care may be warranted when medical devices are sold through distributors or resellers in regions where the manufacturer has limited visibility into the ultimate customer.

7. What should a medical device company include in its U.S. trade compliance program?

An effective trade compliance program should address the complete lifecycle of a medical device—from sourcing components and importing finished products to exporting devices, software, replacement parts, and technical information. Depending on the company’s operations, key elements may include export jurisdiction and classification procedures; sanctions and restricted-party screening; end-use and end-user diligence; import classification, valuation, and country-of-origin procedures; tariff monitoring; licensing controls; recordkeeping; employee training; and escalation procedures for higher-risk transactions.

Companies should also periodically reassess their compliance procedures as products and supply chains evolve. Adding encryption functionality, modifying software, entering a new geographic market, using a new distributor, relocating manufacturing operations, or beginning sales to military or government customers can materially change the export, customs, or sanctions requirements applicable to a medical device.