OT:RR:CTF:VS H342822 JH
David M. Verhey, Principal
FLG Counsel
1717 K Street NW, Suite 900
Washington, DC 20006
RE: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C.
2511); Subpart B, Part 177, CBP Regulations; Country of Origin of Unifyia Platform
Software; Substantial Transformation
Dear Mr. Verhey:
This is in response to your request, dated October 31, 2024, on behalf of Unifyia, Inc.
(“Unifyia”), for a final determination concerning the country of origin of Unifyia Platform
Software, pursuant to Title III of the Trade Agreements Act of 1979 (“TAA”), as amended (19
U.S.C. 2511 et seq.), and subpart B of Part 177, U.S. Customs and Border Protection (“CBP”)
Regulations (19 CFR 177.21, et seq.). Unifyia, Inc. is a party-at-interest within the meaning of
19 CFR 177.22(d)(1) and 177.23(a) and is therefore entitled to request this final determination.
FACTS:
The merchandise under consideration is Unifyia Platform Software, described as software
that provides identity and credential management, and high assurance authentication solutions
for the United States Government. Unifyia’s software is built using a four-step process with the
assistance of a subsidiary in India. The first step is design and engineering efforts conducted by
the Unifyia team in the United States; the second step is source code development by the Unifyia
team in India; the third step is the compilation of source code into executable object code by the
same team in the United States; and the last step is to secure the finished software in storage on
Amazon Web Services (“AWS”) for deployment to government customers.
Step 1:
The beginning stages of the development process start in the United States. The
company’s U.S.-based engineers design the software functionality and service model for the
development process.
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Step 2:
In this step, the Indian-based team, in coordination with the U.S. team during the
development process, produces 80 percent of the source code, while the remaining 20 percent is
developed in the United States. The code is made to meet the requirements of the U.S. design
architecture plan. The software programmers write the computer code using Java, C++, and
Swift languages, while the user-interface designers design and write the computer code for a
graphical layout using Typescript, HTML, FreeMarker, React Native, and JavaScript. Once
completed, the India-based team uploads the source code to Bitbucket, a secure U.S.-based code
repository.
Before step 3 can begin, the U.S. team initiates code cleansing and debugging. This must
be performed before the source code can be transformed into executable code. This process is
done in the United States under the direction of the U.S. engineering team which ensures that all
issues are addressed. During the process, the source code is modified by deleting or modifying
one or more portions of the original source code to produce new source code.
Step 3:
Once cleansing and debugging are complete, the U.S. team initiates the continuous
integration/continuous deployment (CI/CD) process. At this stage, the U.S. team authorizes the
movement of the source code from Bitbucket to Bitbucket Pipeline (a U.S.-based platform) or to
the server (U.S.-based machine), that automatically converts the source code to executable object
code. In the same process, the object code is released with version control for easier
maintenance.
Step 4:
Stated as the end of the CI/CD process, Unifyia in the United States sends the executable
object code to DockerHub, Dropbox, the App Store, and/or the Play Store, all U.S.-based
platforms, for secure storage. The U.S. team then delivers the new object code to the purchaser
through AWS, a U.S.-based platform located in Ashburn, Virginia, that allows customers to
access applications or that provides secure storage for its customers.
ISSUE:
What is the country of origin of the platform software for purposes of U.S. Government
procurement?
LAW & ANALYSIS:
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, pursuant to subpart B of Part 177, 19 CFR 177.21 et
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seq., which implements Title III, Trade Agreements Act of 1979, as amended (19 U.S.C. 2511-
2518).
CBP’s authority to issue advisory rulings and final determinations stems from 19 U.S.C.
2515(b)(1), which states:
For the purposes of this subchapter, the Secretary of the Treasury shall provide for
the prompt issuance of advisory rulings and final determinations on whether, under
section 2518(4)(B) of this title, an article is or would be a product of a foreign
country or instrumentality designated pursuant to section 2511(b) of this title.
Emphasis added.
The Secretary of the Treasury’s authority mentioned above, along with other customs
revenue functions, are delegated to the Secretary of Homeland Security via Treasury Department
Order (TO) 100-20 “Delegation of Customs revenue functions to Homeland Security,” dated
October 30, 2024, and are subject to further delegations to CBP (see also 19 CFR Part 177,
subpart B).
The rule of origin set forth in 19 U.S.C. 2518(4)(B) states:
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
Acquisition Regulation (“FAR”). See 19 CFR 177.21. In this regard, CBP recognizes that the
FAR restricts 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 FAR, 48 CFR 25.003, defines “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.
Additionally, the FAR, 48 C.F.R. 25.003, defines “designated country end product” as:
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a WTO GPA [World Trade Organization Government Procurement Agreement]
country end product, an FTA [Free Trade Agreement] country end product, a least
developed country end product, or a Caribbean Basin country end product.
Section 25.003 defines “WTO GPA country end product” as an article that:
(1) Is wholly the growth, product, or manufacture of a WTO GPA country; or
(2) In the case of an article that consists in whole or in part of materials from another
country, has been substantially transformed in a WTO GPA country 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. The term refers to a product offered
for purchase under a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services) incidental to the article,
provided that the value of those incidental services does not exceed that of the article
itself.
CBP has consistently held that conducting a software build, compiling source code into
object code, results in a substantial transformation. In a final determination that CBP issued,
Headquarters Ruling Letter (“HQ”) H301776, dated Aug. 7, 2019, two software products were
produced using a four-step process: (1) writing original source code, or modifying open source
software code in the United States; (2) writing or modifying source code in Canada; (3)
compiling the source code into executable object code in the United States; and (4) delivering the
finished software to the purchaser. In the final determination, CBP cited to two secondary
sources to highlight how “source code” and “object code” differ in several important ways.
Source code is a “computer program written in a high level human readable language.” See, e.g.,
Daniel S. Lin, Matthew Sag, and Ronald S. Laurie, Source Code versus Object Code: Patent
Implications for the Open Source Community, 18 Santa Clara High Tech. L.J. 235, 238 (2001).
While it is easier for humans to read and write programs in “high level human readable
languages,” computers cannot execute these programs. See Note, Copyright Protection of
Computer Program Object Code, 96 Harv. L. Rev. 1723, 1724 (1983). Computers can execute
only “object code,” which is a program consisting of clusters of “0” and “1” symbols. Id.
Programmers create object code from source code by feeding it into a program known as a
“compiler.” Id. CBP held that the name, character, and use of the source code were changed as
a result of its compilation into executable object code and its completion into finished software
in the United States.
CBP also held in another final determination, HQ H268858, dated Feb. 12, 2016, that
conducting a software build resulted in a substantial transformation. In that decision, four
software products were produced using a similar multi-stage process: (1) writing the source code
in Malaysia; (2) compiling the source code into usable object code in the United States; and (3)
installing the finished software on U.S.-origin discs in the United States. CBP held that all four
software products were substantially transformed in the United States, finding that the software
build conducted in the United States created a new and different article with a new name,
character, and use. See also HQ H243606, dated Dec. 4, 2013 (source code programmed in
China and then compiled into object code in the United States was a substantial transformation).
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In this case, the writing of source code in India (and the United States) involves the
creation of computer instructions in a high level human readable language, whereas the software
build performed in the United States involves the compilation of those instructions into a format
that computers can execute. Based on the information provided, and consistent with the rulings
cited above, we find that as a result of the software build that occurs when the source code is
transformed into executable code when moved through either of the two U.S.-based platforms,
Bitbucket Pipeline or the U.S.-based server, the last substantial transformation occurs in the
United States. Through this process, the character changes from computer code to finished
software, and the use changes from instructions to an executable program. Therefore, Unifyia’s
software is not a product of a foreign country or instrumentality designated pursuant to 19 U.S.C.
2511(b). As to whether Unifyia’s software qualifies as a “U.S.-made end product,” you may
wish to consult with the relevant government procuring agency and review Acetris Health, LLC
v. United States, 949 F.3d 719 (Fed. Cir. 2020).
HOLDING:
Based on the facts and analysis set forth above, the subject Unifyia, Inc. platform
software is last substantially transformed in the United States.
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 of
publication of the Federal Register Notice referenced above, seek judicial review of this final
determination before the U.S. Court of International Trade.
Sincerely,
Alice A. Kipel, Executive Director
Regulations & Rulings
Office of Trade
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