OT:RR:CTF:VS H098417 KSG
Daniel B. Berman, Esq.
Hancock & Estabrook LLP
1500 AXA Tower I
100 Madison Street
Syracuse, NY 13202
Re: U.S. Government Procurement; Title III, Trade Agreements Act of 1979; Country of Origin of Titan dimmer and fan speed switch control; substantial transformation
Dear Mr. Berman:
This is in response to your letter, dated March 5, 2010, requesting a final determination on behalf of Pass & Seymour Inc., pursuant to subpart B of
19 CFR Part 177.
Under these regulations, which implement Title III of the Trade Agreements Act of 1979, as amended (19 U.S.C. 2511 et seq.)(“TAA”), 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 certain dimmer and fan speed control switches that Pass & Seymour may sell to the U.S. Government. We note that Pass & Seymour is a party-at-interest within the meaning of 19 CFR 177.22(d)(1) and is entitled to request this final determination.
You also asked about the tariff classification for the components and the tariff classification and the country of origin marking requirements for the imported good. We have referred these questions to the Tariff Classification and Marking Branch of this office for their response directly to you.
FACTS:
Pass & Seymour ( “P & S”) designs, manufactures and distributes dimmer and fan speed control switches in the U.S. for residential and commercial use in electrical circuits of less than 1,000 volts. This case involves two models: the Titan model dimmer and fan speed switch control and the Harmony dimmer.
Legrand, the French parent company of P & S, produces the subcomponents of the dimmers in Hong Kong. The subcomponents are then shipped to Mexico for assembly. The finished product is then imported into the U.S.
The processing in Mexico includes the following: 1) the assembly of the bare printed circuit board into a final printed circuit board (“PCB”), and the assembly of the PCB with other components into the finished product. The titan dimmer has a total of 34 components in addition to the PCB. The harmony dimmer contains a PCB in addition to 28 other components.
ISSUE:
What is the country of origin of the imported dimmer and fan switches described above for the purpose 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. In C.S.D. 85-25, 19 Cust. Bull. 844 (1985), CBP held that for purposes of the Generalized System of Preferences ("GSP"), the assembly of a large number of fabricated components onto a printed circuit board in a process involving a considerable amount of time and skill resulted in a substantial transformation. In that case, in excess of 50 discrete fabricated components (such as resistors, capacitors, diodes, integrated circuits, sockets, and connectors) were assembled. Whether an operation is complex and meaningful depends on the nature of the operation, including the number of components assembled, number of different operations, time, skill level required, attention to detail, quality control, the value added to the article, and the overall employment generated by the manufacturing process.
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. No one factor is determinative.
CBP recently ruled in H047362, dated March 26, 2009, that a similar product of P & S, electrical components, were substantially transformed when Chinese parts were assembled in Mexico into the finished article. That case also involved the production of the PCB and the assembly of the PCB and 29 other parts in a process that took about 10 minutes into the finished product. We find that this case is very similar to H047362. The assembly in Mexico is sufficiently complex and the components are substantially transformed into a final product that has a new name, character and use. Therefore, the country of origin of the Titan dimmer and fan switch and the harmony dimmer for government procurement purposes is Mexico.
HOLDING: Based on the facts of this case, the country of origin of the Titan dimmer and fan switch and the Harmony Dimmer is Mexico 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 after publication of
the Federal Register Notice referenced above, seek judicial review of this final determination before the Court of International Trade.
Sincerely,
Sandra L. Bell
Executive Director
Office of Regulations and Rulings
Office of International Trade