OT:RR:NC:N4:410
George Tuttle, III
Tuttle Law Offices
3950 Civic Center Drive, Suite 310 San Rafael, CA 94903
RE: The country of origin of an LED Panel Fixture
Dear Mr. Tuttle:
In your letter dated August 29, 2024, on behalf of your client Obert Inc., you requested a country of origin ruling on the applicability of Section 301 remedies pertaining to an LED Ceiling Panel Fixture.
The LED Ceiling Panel Fixture consists of a cold rolled steel housing, and aluminum frame, within which are 84 individual LED diode mounted on six parallel light strips wired to a low voltage (12-24V), direct-current driver, and covered by a clear polystyrene light diffusion panel.
The proposed manufacturing process of the LED Panel Fixture in Mexico, from components originating in China, will comprise (a) light source production and (b) low voltage (12-24V), direct-current driver Production (SMT, DIP, and assembly), both of which feed into the (c) main production. Your submission documents indicate that each of these production steps consist of many sub-steps of operations and the use of sophisticated equipment.
The manufacturing process scenario presented in your submission is summarized as follows:
The production in Mexico starts with the assembly of the LED light source from imported printed circuit board strip with an aluminum substrate (for heat dissipation), resistors (one for each LED), 84 individual LED diodes and individual lenses, organized on 6 strips. Each finished LED Ceiling Panel Fixture is assembled with 6 LED light source strips. This process includes using the Chinese origin PCB (printed circuit board) for the production of the PCBA (printed circuit board assembly) via the SMT (surface mount technology) process. The SMT process involves mounting the main integrated circuit, as well as various capacitors, varistors, fuse and diodes, etc. The production of the LED driver involves a three-step process, i.e., SMT, DIP (dual inline packaging) production and final driver assembly. This process also involves reflow soldering, solid adhesive dispensing, and lenses affixing.
At the completion of the driver SMT line, the unfinished driver SMT is collected and then introduced into the driver DIP line. The unfinished driver SMT is removed from WIP inventory and placed into the DIP plug-in machine which automatically inserts the DIP devices into the unfinished driver board. This process involves wave soldering, automated optical inspection (AOI), and testing in automated test equipment.
The semi-finished driver is then removed from the driver DIP line storage. The stages of final assembly of the driver include the wire stripping, and laser welding. The process involves the LED driver housing, ground wire connecting, insulator and pick attaching, driver box connecting, etc.
The final manufacturing process occurs in the main production line. It involves the light source sheet slitting, silicone dispensing, terminal formation, light strip adhesion, affixing of frame and diffusion panel, hook installation, driver box installation, lighting test, etc.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
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 test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982).
This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993).
We find that the operation of assembling the Chinese origin components and the Mexican origin PCBAs/drivers to make the finished ceiling lights in Mexico results in a substantial transformation. The SMT and wave soldering processes, the making of the light source and PCBAs/drivers etc., along with other assembly activities are sufficiently complex and meaningful operations. The assembly of the individual components to produce the finished light fixtures in Mexico does create a new and different article of commerce with a distinct character and use that is not inherent in the components imported into Mexico. Therefore, the country of origin of the LED Panel Fixture is Mexico, China Section 301 remedies do not apply.
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 Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Michael Chen at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division