OT:RR:NC:N1:105
Beth Pride
President
BPE Global
139 Pierce Street
San Francisco, CA 94117
RE: The country of origin of a gas flow controller.
Dear Ms. Pride:
In your letter dated September 20, 2021, on behalf of your client, Pivotal Systems Corporation, you requested a country of origin ruling determination on a gas flow controller.
The merchandise under consideration is referred to as a gas flow controller (“GFC”). GFC’s are devices used to manage pressure, volume, temperature, and time during the semiconductor manufacturing process. The Pivotal Systems’ GFC’s are replacing the simpler Mass Flow
Controllers (MFC) that have historically been used in the manufacturer of semiconductors. The GFCs are automatic regulating or controlling instruments that meet the National Institute of Standards and Technology (NIST) gas flow standards to provide a stable flow rate under varying pressure. The new High Flow GFCs flow up to 50 standard liters per minute (slm). The GFC consists of six main components: a machined metal baseblock, a printed circuit board (PCB), a temperature sensor, a pressure transducer, a gas flow controller valve, and a gas flow meter valve.
All Research and Development (R&D) for the Pivotal Systems GFCs are conducted in the United States by the Pivotal Systems team. No R&D occurs in China or in South Korea. In addition, both the operational firmware as well as the manufacturing firmware are created by the Pivotal System team in the United States.
Pivotal Systems employs a three-phase flow to build their GFCs. Phase 1 is the complete assembly process of the GFC hardware components that ensures the electronics are working. This includes the loading of the manufacturing firmware and the assembly of the six main components including a machined metal baseblock, a PCB, a temperature sensor, a pressure transducer, a gas flow controller valve, and a gas flow meter valve. The metal baseblock is machined to exact specifications in China. The baseblock provides the platform on which all other components of the GFC are mounted and contain the channels that form the main flow path of the gas. The external metal case is put on in China and is only removed in the rare case where the rework of the metal assembly is required. The baseblock and other components do not have full functionality when exported from China but are able to be powered on for integration testing purposes. The complete assembly is further tested for gas leaks using a helium leak check. Phase 1, in its entirety, is performed in China.
Phase 2 is the activation phase where the GFC operational firmware is programmed onto the PCBA. The software that is loaded activates the GFC and enables processed gas to flow. The GFC is activated to communicate externally with a wafer fabrication system via digital, or analog communications. The GFC cannot process gas at this point, however, gas can flow through the device and the GFC can be brought into specific tolerances. The accuracy depends on the accuracy of the pressure measurement component, volume measurement component, temperature measurement component and accuracy of the actual volume measurement in the manufacturing flow. Additionally, the secure hashing algorithm chip is programmed with an encrypted algorithm to protect the Intellectual Property of the GFC.
Phase 2 also includes the volume calibration, which occurs by measuring the volume of the metal baseblock against a traceable volume that is measured gravimetrically. The measurement is carried out on a station that has the two key reference standards. During the mapping stage the data that is collected is the unique properties of the individual GFC to determine the unique flow fingerprint of the GFC. The result of this measurement is input into a program that calculates the necessary calibration based on the following information that is unique to the individual GFC: volume measurement, valve information and the map of the pressure transducer. Each unit is then programmed with this individual map before being tested for flow at a steady pressure but changing volume during “Flow Verify”. Flow Verification validates that the unit flows accurately. It confirms the Volume Calculation and Mapping processes were successful and meet the NIST standards. Phase 2, in its’ entirety, is performed in South Korea.
Phase 3 is where the GFC is programmed to meet customer requirements and enables process gas flow. This process also occurs in South Korea. The customer configuration step transforms the GFC for positional valve sensing and controls specific to the gas type, flow range and communications protocols as specified by the customer. Customer-specific performance features are also added during this step. During the backup stage the GFC mapping specific to the customer/GFC is backed up to the Pivotal Systems servers in the US. Final steps include labeling, final inspections, and shipping.
The “country of origin” is defined in 19 CFR 134.1(b) as the country of manufacture, production, or growth of any article of foreign origin entering the United States. 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’ within the meaning of this part.
The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). However, if the manufacturing or combining process is merely a minor one that 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, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
CBP has considered a scenario (in HQ H241177 dated December 3, 2013) in which a device was manufactured in one country, the software used to permit that device to operate was written in another country, and the installation of that software occurred in a third country. In that case, switches were assembled to completion in Malaysia and then shipped to Singapore, where EOS software developed in the United States at significant cost and over many years, was downloaded. It was claimed that the U.S.-origin EOS software enabled the imported switches to interact with other network switches through network switching and routing and allowed for the management of functions such as network performance monitoring and security, and access control; without this software, the imported devices could not function as Ethernet switches. CBP found that the software downloading performed in Singapore did not amount to programming. We explained that programming involves writing, testing, and implementing code necessary to make a computer function in a certain way. See Data General, supra; see also “computer program”, Encyclopedia Britannica (2013), (9/19/2013) http://www.britannica.com/EBchecked/topic/130654/computer-program, which explains, in part, that “a program is prepared by first formulating a task and then expressing it in an appropriate computer language, presumably one suited to the application.” While the programming occurred in the United States, the downloading occurred in Singapore. Given these facts, we found that the country where the last substantial transformation occurred was Malaysia, that is, where the major assembly processes were performed. Therefore, we found that the country of origin for purposes of U.S. Government procurement was Malaysia.
While counsel contends that the country of origin of the gas flow controllers should be the country where the firmware is downloaded because the gas flow controllers cannot function without the firmware being installed, that is not the correct test used to determine the country of origin of a product. The country of origin of a product is determined based on where the last substantial transformation occurs. It is CBP’s position that mere downloading of software that is written in another country is not sufficient to be considered a substantial transformation of that device. It is the opinion of this office that the manufacturing process in China renders the essence of the gas flow controllers as they are completely assembled and cannot be used for any other purpose. Therefore, the gas flow controllers are not substantially transformed by downloading the firmware in South Korea. The country of origin will be the country where the last substantial transformation occurs, which would be the country where the last major assembly of the gas flow controllers occurs. As a result, we find that the country of origin of the gas flow controllers will be China.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division