CLA-2-84:OT:RR:NC:N1:104
Maureen E. Thorson
Wiley Rein LLP
1776 K Street NW
Washington, DC 20006
RE: The country of origin of a 3D Printer.
Dear Ms. Thorson:
In your letter dated December 9, 2019, you requested a country of origin ruling on behalf of your client, Formlabs, Inc. (Formlabs).
The Formlabs additive manufacture device, or 3-D Printer, is a device that produces three-dimensional objects through stereolithography (SLA). SLA is a process in which a liquid material, i.e., such as plastic resin, is cured into a solid material by laser light.
The applicable subheading for the Formlabs 3D Printer will be 8477.80.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for which provides for “Machinery for working rubber or plastics or for the manufacture of products from these materials, not specified or included elsewhere in this chapter; parts thereof: Other machinery”. The rate of duty will be 3.1 percent ad valorem.
Country of Origin
Your submission outlined three scenarios wherein the 3D Printer is manufactured. The following are the 11 major subassemblies of the finished 3D Printer: (1) Laser Module; (2) Galvanometer; (3) Optics Module; (4) X-and Z- Motion Systems; (5) Roller Holder and Tensioner; (6) Cartridge Floor; (7) Motherboard and System on Module (SoM); (8) Heater; (9) Power Supply; (10) Tower/Housing; and (11) Touchscreen.
In scenario one, you indicate that Motherboard, SoM, and additional Printer Circuit Board Assemblies (PCBAs) are manufactured in China, with the exception of the PCBA in the Galvanometer which is manufactured in a European country. Additionally, the Laser Module is manufactured in the United Kingdom utilizing components made in the United Kingdom, Japan and China. The remaining major subassemblies are manufactured in China.
In scenario two, you indicate that the Motherboard, SoM and additional PCBAs are manufactured in Malaysia, Thailand or Vietnam, with the exception of the PCBA in the Galvanometer, which is manufactured in a European country. Additionally, the Laser Module is manufactured in the United Kingdom utilizing components made in the United Kingdom, Japan and China. The remaining major subassemblies are manufactured in China.
In scenario three, you indicate that Motherboard, SoM and additional PCBAs are manufactured in Malaysia, Thailand or Vietnam, including the PCBA in the Laser Module that is manufactured in the United Kingdom. The Galvanometer, including the PCBA, is manufactured in a European country. The remaining major subassemblies are manufactured in China.
The final assembly operations for all three manufacturing scenarios take place in China. This involves assembling the supportive armature for the finished device, and then connecting or installing the individual components and subassemblies into that supportive armature. These components/subsystems, are the Optic Module (which includes the Laser Module and Galvanometer), X- and Z-Motions Systems, the Roller Holder and Tensioner, the Cartridge Floor, the Motherboard and System on Module, the Power Supply, Resin Heater, Touchscreen and, final external housing components.
As stated in HQ 735009 dated July 30, 1993, “The country of origin is the country where the article last underwent a “substantial transformation”, that is, processing which results in a change in the article's name, character, or use”. In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” 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.
In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive. Assembly operations that are minimal will generally not result in a substantial transformation.
You indicate in your ruling request that the Laser Module, which is manufactured in the United Kingdom, imparts the essential character of the 3D Printer since it is the component that emits the laser beam used in curing the liquid resin. Therefore, the country of origin will be the United Kingdom. This office disagrees.
Based upon the facts presented, it is the opinion of this office that the manufacturing of the Motherboard and SoM impart the essential character of the 3D Printer. The Motherboard and SoM are installed at the rear of the device’s supportive internal armature. Once installed, the Motherboard and SoM are joined by cables to the device’s other subassemblies and PCBAs. Specifically, the Motherboard and SoM provide all of the functional control of the device, including control of the electromechanical systems and the optical system. Therefore, the Motherboard and SoM function as the brains of the 3D Printer. Accordingly, the country of origin for scenario one will be China and the country of origin for scenarios two and three will be Malaysia, Thailand or Vietnam. See Headquarters Ruling Number H302801 dated October 3, 2019.
Trade Remedy
Products of China classified under subheading 8477.80.0000, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8477.80.0000, HTSUS, listed above. See U.S. Note 20 to Subchapter III, Chapter 99, HTSUS.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the Section 301 trade remedy, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in 19 CFR 177.9(b)(1). In the event that the facts or merchandise are modified in any way, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and you should resubmit for a new ruling in accordance with 19 CFR 177.2.
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 Denise Hopkins at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division