OT:RR:NC:N1:105
Stephen Geary Pokit Innovations 56 Dehli Road, Suite 2.2 North Ryde 2113 Australia
RE: The country of origin and status under the United States-Korea Free Trade Agreement (UKFTA) of the Pokit Pro
Dear Mr. Geary:
In your letter dated December 13, 2024, you requested a country of origin and status under the UKFTA ruling on the Pokit Pro multimeter, oscilloscope, and logger. Pictures and descriptive literature were provided for our review.
The item under consideration is described as the Pokit Pro, which is a portable handheld multifunction device that includes a multimeter, oscilloscope, data logger, spectrum analyzer, and range tester. The Pokit Pro is designed to be connected to a smart device via the Pokit App. The Pokit Pro is a CAT III, 600V, 10A device that measures AC/DC voltage, AC/DC current, resistance, capacitance, temperature, continuity check, and diode check. The user can connect up to four devices for synchronous multi-channel access. It contains a rechargeable battery (USB-C) and an integrated flashlight. The provided case stores the probes and leads, and also delivers precise user calibration. The Pokit Pro will be manufactured in China and South Korea according to the three scenarios listed below. The design, firmware, and application software in each scenario are developed in Australia. Each scenario has a slight modification of the manufacturing steps and source country. However, the creation of the sub parts, which include the following items, remain the same for each scenario: The Red Lead consists of three parts including a nickel-plated beryllium-copper pin, soldered onto insulated wire with a red rubber over mold. The Black Lead also consists of three parts including a nickel-plated beryllium-copper pin, soldered on to insulated wire with a black rubber over mold. The Switch Assembly consists of silver cadmium contacts peened into a nickel-plated beryllium-copper bucket, and slotted into a shaped piece of plastic. The Isolation Transformer is a custom wound toroidal transformer. The Main Printed Circuit Assembly (PCA) is a circuit board that contains the majority of the circuitry for the Pokit Pro. This circuitry includes the microcontroller unit (MCU), which is to be programmed with the firmware, resistors, capacitors, transistors, and multiple other chips and circuits mounted on a FR-4 Printed Circuit Board (PCB) substrate (166 parts in total). The USB PCA is a circuit board that contains a USB connector, protection, and an oscillator circuit (to drive the isolation transformer) mounted on a FR-4 PCB substrate (22 parts in total). The LED Flexible Printed Assembly (FPA) is a flexible printed circuit that contains circuits for controlling various LEDs and a button mounted on a polyamide Flexible Printed Circuit (FPC) substrate (15 parts in total). The Rear Fuse holder is a shaped piece of nickel-plated beryllium-copper to hold the rear of the fuses. The 500 mA Fuse and 10A Fuse are standard fuses. The Fuse Cover Plastic and Fuse Cover Rubber are specially shaped products. The Fuse Cover Screws are flat head M1 screws. The Battery is a custom prismatic rechargeable Lipo battery. The Top Plastic is a shaped piece of plastic with smaller plastic and rubber inserts and an added rubber over mold. The Bottom Plastic is a shaped piece of plastic with an added rubber over mold. The Box is a cardboard box with a vacuform insert for holding the product in shipping. The additional accessories include the manual, USB-C Cable, Probe Clips, Probe Tip Shrouds, and Probe Tip Cover. There are several main assemblies where the production will be the same despite the change in country. The Top Assembly starts with adding double sided tape onto the Main PCA near the path of the transformer windings. Next, the worker solders the Red Lead onto the Main PCA. Next, the worker solders one side of the Isolation Transformer onto the Main PCA. Next is soldering the other side of the Isolation Transformer onto the USB PCA followed by positioning the LED FPA into the Top Plastic. Then, the worker adds double sided tape underneath the connection point of the FPC connector on the Main PCA and connects the LED FPA to the FPC connector on the Main PCA. Then the worker adds 4mm thick single sided Foam tape on top of the FPC connector and tapes the battery onto the Top Plastic. Next, the worker solders the battery onto the Main PCA and positions the Main PCA, Isolation Transformer, and USB PCA into the Top Plastic. For the Bottom Assembly, the worker will pull the Black Lead through a hole in the rear of the Bottom Plastic and solder the Black Lead onto the Rear Fuse Holder. Next, they position the Black Lead and Rear Fuse Holder into the Bottom Plastic and add Double sided tape in the USB section of the Bottom Plastic. For the PCA Test Jig, the worker will test that the board voltages are correct. Then they program firmware onto the MCU and set the serial numbers and version numbers. This is followed by calibrating the voltage, low current and high current circuits, and testing the BLE connection. The MOL Test Jig tests for BLE connection, USB charging, and tests the voltage, low current and high current circuits. The EOL Test Jig tests the Bluetooth Low Energy (BLE) connection, USB charging, tests voltage, low current and high current circuits. Additionally, the EOL Test Jig calibrates resistance offset and probe compensation. Finally, the Run MOL test ultrasonically welds the Top and Bottom Assemblies together into the final unit. A worker assembles the Fuse Cover Plastic, Fuse Cover Rubber and Screws to the rear of the unit. Then the EOL test is run, and final packaging is conducted with the box and accessories. Scenario A is based on the last step being the ultrasonic welding of the unit into the final unit and assembly of the fuse cover onto the unit. Under this scenario the manufacturing steps prior to ultrasonic welding are completed inside China and the manufacturing steps done after ultrasonic welding are completed inside Korea.
The 90 Test is run twice; the first occurrence in China. Next, the assembly shifts to Korea where the top and bottom assemblies are ultrasonically welded together. Afterwards, the fuse cover plastic, fuse cover rubber and screws are assembled and fastened. The final EOL test is then completed, and the item is packaged for shipping. Scenario B is similar in nature and theory to scenario A. The difference is the inflection point where the production process takes place. Under this scenario, the manufacturing steps prior to bringing the assemblies together are completed inside China and the manufacturing steps done after bringing the assemblies together are completed inside Korea. In China, all of the sub parts are created. Then the main PCA is run through the main PCA test jig. The next step involves the creation of the top assembly followed by the creation of the bottom assembly. Next, the assembly switches to Korea where the worker will place the switch assembly between the top and bottom assemblies, and afterwards place the 10A and 500mA fuse in their respective locations. Then, the top and bottom assemblies are combined. In this scenario, the two MOL tests are performed in Korea. The top and bottom assemblies are ultrasonically welded together, and the fuse cover plastic, fuse cover rubber and screws are assembled and fastened. The final EOL test is then completed, and the item is packaged for shipping. Scenario C is different from the first two scenarios. The difference being, the PCA’s are considered the “core” of the product, and the constituent subparts are all made in Korea. The assembly is then done in China. Under this scenario the critical manufacturing step of assembling and programming the PCAs are completed in Korea and the remaining manufacturing is completed in China. In Korea, all of the subparts are created and the main PCA is run through the main PCA test jig. Then the manufacturing is transferred to China where a worker creates the top assembly followed by the creation of the bottom assembly. The worker will place the switch assembly between the top and bottom assemblies, and then place the 10A and 500mA fuse in their respective locations. Then, the top and bottom assemblies are combined. In this scenario, both MOL tests are run in China. The top and bottom assemblies are ultrasonically welded together, and the fuse cover plastic, fuse cover rubber and screws are assembled and fastened. The final EOL test is then completed, and the item is packaged for shipping. When determining the country of origin, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. 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, 681 F.2d 778 (C.C.P.A. 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).
Regarding the country of origin of the Pokit Pro, it is our opinion that in Scenario A the assembly process performed in Korea is not considered complex and does not constitute a substantial transformation. The PCBAs are fully functional when they are created in China for final enclosure assembly and packaging. The downloaded firmware is product specific and the PCBAs cannot be used for any other purpose than with the Pokit Pro. Therefore, to determine the country of origin of the Pokit Pro, we rely on the origin of the PCBAs, which are the essential components of the Pokit Pro. It is the PCBAs that are performing the measuring, and they do not change function when combined with the additional components. Accordingly, the country of origin of the Pokit Pro for marking purposes, for Scenario A, will be China, which is where the functional PCBAs are manufactured. Similarly, in Scenario B, despite additional assembly being performed in Korea, the assembly process is not complex. It predominately involves screwing, placing, and snapping goods into place. In our opinion, the ultrasonic welding is also not considered complex and does not change the use of the intended article. Therefore, similar to Scenario A, we rely on the origin of the PCBAs, which are the essential components of the Pokit Pro. It is the PCBAs that are performing the measuring, and they do not change function when combined with the additional components. Accordingly, the country of origin of the Pokit Pro for marking purposes, for Scenario B, will be China, which is where the functional PCBAs are manufactured. In Scenario C, the complete manufacturing of the PCBAs is performed in Korea. Despite the additional assembly process and welding being performed in China, we consider the assembly to be simple assembly. Therefore, similar to the logic in Scenario A and B, we rely on the origin of the PCBAs, which are the essential components of the Pokit Pro. It is the PCBAs that are performing the measuring, and they do not change function when combined with the additional components. Accordingly, the country of origin of the Pokit Pro for marking purposes, for Scenario C, will be Korea, which is where the functional PCBAs are manufactured. In your letter, you also request a ruling on the status under the UKFTA. General Note 33, Harmonized Tariff Schedule of the United States (HTSUS), sets forth the criteria for determining whether a good is originating under the UKFTA. General Note 33(b), HTSUS, (19 U.S.C. § 1202) states that For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if- (i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both; (ii) the good is produced entirely in the territory of Korea or of the United States or both, and - (A) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or (B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and satisfies all other applicable requirements of this note and of applicable regulations; or (iii) the good is produced entirely in the territory of Korea or the United States, or both, exclusively from materials described in subdivisions (i) or (ii), above. For the purposes of this note, the term “UKFTA country” refers only to Korea or to the United States. For goods classified in heading 9030.39, General Note 33(o)/Chapter 90 51C requires: A change to subheadings 9030.33 through 9030.82 from any other subheading. For the goods imported under the conditions of Scenario A and B, the origin of the PCBA’s and other essential components was China. The non-originating components do not make a tariff shift as they would be considered an unassembled item classified in subheading 9030.39, HTSUS. Accordingly, based on the facts provided, the goods described in scenario A and B would not be eligible for UKFTA preferential treatment, because they do not meet the requirements of HTSUS General Note 33(b)(ii). The goods will therefore not be entitled to a Free rate of duty under the UKFTA. However, for the goods imported under the conditions of Scenario C, we concluded that the PCBAs manufactured in Korea were the essential component of the Pokit Pro. Accordingly, we need to determine whether the additional components manufactured in China warrant a tariff shift. In our opinion, each of the additional components manufactured in China are classified outside of subheadings 9030.33 through 9030.82 (for example Chapter 39 for the plastic components, Chapter 85 for the fuses and electrical components, and in subheading 9030.90 for the specific parts that are not classified elsewhere). Therefore, the tariff shift requirement is met. Based on the facts provided, the goods described above in Scenario C are eligible for UKFTA preferential treatment, because they meet the requirements of HTSUS General Note 33(b)(ii). The goods will therefore be entitled to a Free rate of duty under the UKFTA upon compliance with all applicable laws, regulations, and agreements. 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 Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division