MAR-2-05 OT:RR:CTF:VS H025747 GOB
Craig J. Catalano
Vice President of Global Development
Score Fiber Optics
380 Townline Road
Hauppauge, NY 11788
RE: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C. § 2511); Subpart B, Part 177, CBP Regulations; Fiber Optic Cable
Dear Mr. Catalano:
This is in response to your letter of December 13, 2007, requesting a final determination on behalf of Score Fiber Optics (“Score”), pursuant to subpart B of Part 177, Customs and Border Protection (“CBP”) Regulations (19 CFR § 177.21 et seq.). Your letter of December 13, 2007, as well as your later correspondence of January 24, 2008 and February 27, 2008, were forwarded to this office by the National Commodity Specialists Division by memorandum of March 25, 2008. Under the pertinent regulations, which implement 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 purpose 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 fiber optic cable with end connectors. We note that Score is a party-at-interest within the meaning of 19 CFR § 177.22(d)(1) and is entitled to request this final determination.
FACTS:
You describe the pertinent facts as follows. Both Score and its parent company, Epcom, purchase fiber optic cable from an unrelated company in the United States, Corning, Inc. (“Corning”). Corning states that the fiber optic cable is produced in the United States and has provided a Certificate of Origin indicating that 50 cartons of the fiber optic cable are a product of the United States. The fiber optic cable is a standard fiber optic cable and may consist of one or more fiber optic fibers for strength. A thermoplastic coating provides protection for the very thin fibers. Score exports the spools of finished fiber optic cable to China where the fiber optic cable is cut to length and metal connectors made in China are applied to the fiber optic cable. Specifically, the spooled fiber optic cable is cut to length. Each end of the cut cable is threaded through a metal holder where about two inches of sheathing are removed from each end of the cable. Any exposed fiber is cut off and the plastic jacketing of the optical fiber is removed. The exposed fiber is cleaned with alcohol and measured. It is then threaded through a connector, glued to the connector, and excess fiber is trimmed. The connectors are placed into a finishing machine, where the fiber ends are automatically beveled and polished. Metal springs are inserted into a connector and welded into place. The connectors are cleaned and tested.
Score purchases or manufactures a metal ferrule in China. The ferrule, which is a hollow cylinder, is used to align the ends of the optical fibers as the fibers are inserted into the connectors. The hollow center of the ferrule contains one channel that is designed to fit the optical fiber and to align the fiber ends, enabling light to pass through the connection. Score purchases or manufactures metal parts to be used in the cable connectors. These parts are made in China.
You furnished a sample (item no. SS-11SCU-SCU-001) which is a single optic fiber, approximately 42 inches long, with thermoplastic coating and connectors at each end. You state that Score will be exporting and reimporting many similar products. The finished article is used to connect equipment to telecommunication networks.
In addition to country of origin for government procurement, you ask if you may mark the fiber optic cable “Made in the United States.”
ISSUE:
What is the country of origin of the subject fiber optic cable with end connectors 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 rendering advisory rulings and final determinations for purposes of U.S. Government procurement, CBP applies the provisions of subpart B of Part 177 consistent with the Federal Procurement Regulations. See 19 CFR § 177.21. In this regard, CBP recognizes that the Federal Procurement Regulations restrict the U.S. Government’s purchase of products to U.S.-made or designated country end products for acquisitions subject to the TAA. See 48 CFR § 25.403(c)(1). The Federal Procurement Regulations define “U.S.-made end product” as:
…an article that is mined, produced, or manufactured in the United States or that is substantially transformed in the United States 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 transformed.
48 CFR § 25.003.
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. If the manufacturing or combining process is a minor one which 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 (1982), aff’d 702 F. 2d 1022 (Fed. Cir. 1983). In Uniroyal, the court determined that a substantial transformation did not occur when an imported upper, the essence of the finished article, was combined with a domestically produced outsole to form a shoe.
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. Additionally, factors such as the resources expended on product design and development, extent and nature of post-assembly inspection and testing procedures, and the degree of skill required during the actual manufacturing process may be relevant when determining whether a substantial transformation has occurred. No one factor is determinative.
In HQ 561392 dated June 21, 1999, CBP considered the country of origin marking requirements of an insulated electric conductor which involved an electrical cable with pin connectors at each end used to connect computers to printers or other peripheral devices. The cable and connectors were made in Taiwan. In China, the cable was cut to length and connectors were attached to the cable. CBP held that cutting the cable to length and assembling the cable to the connectors in China did not result in a substantial transformation. In HQ 560214 dated September 3, 1997, CBP held that where wire rope cable was cut to length, sliding hooks were put on the rope, and end ferrules were swaged on in the U.S., the wire rope cable was not substantially transformed. CBP concluded that the wire rope maintained its character and did not lose its identity and did not become an integral part of a new article when attached with the hardware. In HQ 555774 dated December 10, 1990, CBP held that Japanese wire cut to length and electrical connectors crimped onto the ends of the wire was not a substantial transformation. In HQ 562754 dated August 11, 2003, CBP found that cutting of cable to length and assembling the cable to the Chinese-origin connectors in China did not result in a substantial transformation of the cable.
Based upon the facts presented and the pertinent authorities, we determine that U.S.-origin fiber optic cable exported to China and processed in China as described above, is not substantially transformed in China into a new and different article of commerce with a name, character, and use distinct from the article exported. Therefore, the fiber optic cable with end connectors is considered a product of the United States for the purpose of government procurement.
Further, the fiber optic cable with end connectors is not required to be marked “Made in China.” For a determination as to whether you may mark the finished product “Made in the U.S.,” please contact the Federal Trade Commission.
HOLDING:
The fiber optic cable of U.S. origin, which is exported to China and processed in China as described above, is not substantially transformed in China into a new and different article of commerce with a name, character, and use distinct from the article exported. Therefore, the fiber optic cable is considered a product of the United States for the purpose of 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