OT:RR:CTF:VSP H345669 ACH
Ms. Suzanne Kane
Akin Gump Strauss Hauer & Feld LLP
2001 K Street, N.W.
Washington, DC 20006-1037
Re: Country of origin marking of Smart Glasses; Section 301
Dear Ms. Kane:
This is in response to your correspondences, dated March 6, 2025 and March 20, 2025,
requesting a binding ruling on behalf of your client, [ ] concerning the country of origin of two
different models of Smart Glasses for marking, and Section 301 duty purposes. Either [ ] or [ ]
will act as the importer of record.
You have requested that certain information submitted in connection with this request be
treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R.
§ 177.2(b)(7), the request for confidentiality is approved. The information bracketed in your
request will not be released to the public and will be withheld from published versions of this
ruling.
FACTS:
1. [ ] Smart Glasses - Model #1
The Next Generation Smart Glasses addressed in the March 6, 2025 inquiry are artificial
intelligence (“AI”) glasses that offer users the opportunity to capture photos and videos, make
video calls or livestream, store photos and videos, listen to music, make phone calls, send texts
using voice commands, and ask questions and receive answers using AI. The Smart Glasses
have a front frame, right and left temple pieces, and two lenses. The lenses of the Smart Glasses
are available as prescription or non-prescription, depending on what the customer chooses. The
customer has the option to select polarized or non-polarized sunglass lenses, transition, blue
filter, or clear form lenses.
The Smart Glasses are equipped with a [ ] chipset that is mounted to the main logic board
(“MLB”) within the product. The Smart Glasses incorporate a high-power main processing unit
that handles heavy computing including photo and video processing, wireless communication,
and AI functionalities; a microcontroller unit (“MCU”) that handles lower computing
functionalities such as sensor processing, audio playback, and microphone capture; components
that provide memory storage; and components that provide capacitive touch functionality,
allowing users to interact with the Smart Glasses through touch gestures.
All of these functions are made possible by the chipset mounted on the MLB, which is
responsible for the flow of data, power, and communication between the major components. The
main components of the Chipset include the applications processor, which handles instructions,
manages memory, manages power, processes all multimedia, and ensures that all parts and
components are communicating with each other to fully integrate operations, and the Wi-
Fi/Bluetooth chip, which enables Wi-Fi and Bluetooth connectivity for the device.
It is stated that the MLB drives the functioning of the Smart Glasses through visual and
audio feedback from several other components, including:
The Secondary Logic Board (“SLB”) (surface mounted in Vietnam), which is an
auxiliary PCBA that is responsible for enabling and amplifying the audio of the speaker
on the right temple flexible printed circuit board. The SLB also contains an action button
that allows the user to activate video or streaming. The SLB supports the communication
capabilities of the Smart Glasses by enabling the speaker to perform key functions by
engaging the action button.
Flexible Printed Circuit Boards (“FPCAs”), which are responsible for connecting the
different components of the Smart Glasses to each other and directly or indirectly to the
MLB. The Superflex FPCA contains a microphone and connects to the MLB, camera,
SLB, and charging contacts. The Camera FPCA contains the camera module and
connects to the Superflex FPCA. The Right Temple FPCA contains two microphones, an
integrated circuit (“IC”), and right speaker pads and connects to the SLB and the right
temple speaker. The left temple FPCA contains two microphones and left speaker pads
and connects to the MLB and the left speaker. The Slider FPCA contains a two-position
switch and connects to the MLB.
A Camera, which is responsible for the photo and video capturing capabilities of the
Smart Glasses. The main processing unit on the MLB processes data feedback from the
camera sensor that is required to capture a picture.
Microphones, which are responsible for the audio and voice capturing capabilities of the
Smart Glasses. The main processing unit on the MLB computes voice and audio from the
microphones that starts the activation of the AI. The processing unit on the MLB
processes questions and inquiries by the user. Once the data is transmitted from the main
processing unit to the user’s smartphone by wireless Bluetooth connectivity, AI’s
response is then transferred back to the phone, where the main processing unit plays it out
of the speaker.
Speakers, which are responsible for the sound output of the Smart Glasses. The Chipset
on the MLB is critical to managing the input data and communicating with the other
components so the user can access key device functionalities such as playing audio
through the speakers.
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The Battery, which is responsible for storing energy that can be used to power the Smart
Glasses. The Chipset on the MLB ensures efficient energy usage as it controls the power
management system of the battery.
The manufacturing steps for the Smart Glasses occur in three main stages: (1) the production
of individual components in nine countries (including Taiwan, Japan, China, the United States,
the Philippines, Malaysia, Vietnam, Singapore, South Korea, Thailand, and Germany); (2) the
production of the MLB and the SLB in Vietnam by means of SMT; (3) and final assembly, final
software uploads, testing and packout (“FATP”) in China.
The Smart Glasses consist of between 600 and 700 components. China contributes 46
percent of the components’ cost, including the memory, mechanicals, camera, battery, flexes,
audio, other electrical engineering components (“EE”), printed circuit board (PCB), critical ICs,
interconnect, and antenna. Taiwan contributes 36 percent of the components’ cost, including
other EE, the [ ] chipset, memory, PCB, antenna, and critical ICs. All other countries provide
less than 10 percent of the components’ cost. The MLB includes between 500 and 600 of these
components and accounts for over half of the total components’ cost. The MLB components
include: the main PCB, the main processing unit chipset, critical ICs, memory, other EE,
antennas, interconnect, additional PCB, and multi-domain vertical alignment.
Production in Vietnam will include the creation of two separate PCBAs (the MLB and SLB)
by surface mount technology (“SMT”). Prior to their integration into the PCBAs, the individual
components are largely commodity parts that have a range of commercial applications. Once
mounted, the components will execute or support the data processing and transceiving functions
that make the Smart Glasses a wearable communications device.
The completed MLBs and SLBs are then sent from Vietnam to China for FATP. The FATP
process takes less than two hours and is where the glasses are assembled. The FATP process
includes left temple assembly, right temple assembly, main line assembly (which produces the
front frame, camera barrel, and facilitates the assembly of the left and right temple flexes to the
frame of the Smart Glasses), testing, and packaging. None of the steps involved in the FATP
portion of production alter the main characteristics of the MLB or SLB.
2. New Smart Glasses - Model #2
The New Smart Glasses addressed in your March 20, 2025 inquiry have a range of
communications functions and AI features when paired to an internet-enabled smartphone
through a Wifi or Bluetooth connection. Similar to the model #1 glasses, this model will enable
the user to take and share photos and videos, make phone calls and video calls, send and receive
messages, listen to audio playback and interact with an AI assistant in different forms and
methods, including voice, display, and manual interactions.
The Smart Glasses are projected to contain between 800 and 900 components that will be
incorporated into several modules. Between 600 and 700 of these components are mounted to
the MLB, and between 20 and 30 are mounted to the SLB. The modules of the Smart Glasses
include:
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The MLB (surface-mounted in Vietnam), which contains between 600 and 700
components that collectively drive and manage the Smart Features. Among other
components, it will include a [ ] chipset package that manages the flow of data,
power, and communication between the major components, a high-powered
processing MCU, components that provide memory storage, a lens display function
that allows the user to interface with visual content arising from the Smart Features,
and components providing image data retrieval, processing, and rendering
capabilities. The combination of these components in their specific configurations on
the MLB imparts the ability of the MLB to connect to a smartphone and to conduct,
enable, and drive its Smart Features.
The Chipset, which manages the flow of data, power, and communication between
the major components, and enables the Smart Features. Within the Chipset are: (1) an
applications processor that handles instructions, manages memory, manages power,
processes all multimedia (i.e., data, audio, photo and video processing), and ensures
that all parts and components “talk” to each other to establish fully integrated
operations; and (2) a WiFi/Bluetooth chip that imparts WiFi and Bluetooth
connectivity for the device. The Chipset also hosts the operating system (“OS”) that
enables the Smart Glasses’ wearer to access and execute applications for the use of
the Smart Features.
The SLB (surface-mounted in Vietnam), which provides interconnections for critical
signals and power traces from the MLB to various modules and components,
including the battery, the right temple flex, right temple microphones, and right
temple speakers. The SLB also helps produce clear audio for the user. As such, it
serves as an extension of the MLB to ensure proper execution of user commands and
the Smart Features.
The Eyepiece (waveguide manufactured in Malaysia and remaining operations
performed in China), which consists of two components: the waveguide, which is
manufactured through a complex production operation that involves a series of
between 300 and 400 manufacturing steps; a photochromic dimming sub-component
(“VID2 lens”) and a component that sets the distance of the virtual image on the
lenses (“VID1 lens”) (collectively, the “VID lenses”). The waveguide is incorporated
into the larger eyepiece in China through a simple lamination process, wherein
adhesive is dispensed on the VID dimming lenses, then the VID lenses and
waveguide are bonded together.
The Display Engine (manufactured in China), which receives data from the MLB
and uses this data to project high-quality virtual images to the above-described
waveguide of the Eyepiece and ultimately to the user’s eye. Additionally, the module
uses feedback that it receives from an ambient light sensor to adjust the brightness of
the image. To perform these functions, the Display Engine depends on information
received by the MLB, specifically the chipset, which provides detailed instructions as
to the image to project and the proper level of brightness.
The Battery (manufactured in China), which is responsible for storing energy that
can be used to power the Smart Glasses. The chipset on the MLB ensures efficient
energy usage as it controls the power management system of the battery.
Audio (Speakers and Microphones) (manufactured in China), which are responsible
for the sound input and output of the Smart Glasses. The chipset on the MLB is
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critical to managing the input data through the microphones to then communicate
with the other components for the user to access key device functionalities such as the
use of speakers to play audio.
Various structural components (manufactured in China), which include: a front
frame, right and left temple arms, and two lenses. The lenses will have different
available configurations based on user need or preference—for example, prescription
or non-prescription.
The manufacturing steps for the Smart Glasses occur in three main stages: (1) the
production of individual components in nine countries (including Taiwan, Japan, China, the
United States, the Philippines, South Korea, Germany, Malaysia, and Thailand); (2) the
production of the MLB and the SLB in Vietnam by means of SMT; (3) and FATP in China.
Between 200 and 300 of the components are manufactured in China. The Chinese origin parts
make up almost half of the component costs. These components include the PCB, memory,
mechanicals, display engine components, other electronic engineering, interconnect, flexes,
eyepiece, critical integrated circuits, camera, battery, and audio. The display engine components,
waveguide, and flexes provide nearly 40 percent of the components cost and are of Malaysian
origin. The chipset, display engine components, flexes, memory, critical integrated circuits, and
other electronic engineering are from Taiwan. These components make up 11 percent of the
total components’ cost, nearly 80 percent of the MLB components cost, and over 40 percent of
the SLB cost.
SMT of the MLB line cycle takes several hours to complete, and SMT of the SLB line
cycle takes about two hours to complete. The SMT of the SLB involves dozens of steps and
takes about two hours to complete. FATP of the Smart Glasses occurs in China. FATP involves
front frame assembly, rear frame assembly, left temple assembly, right temple assembly, main
line assembly, testing, and packaging. The FATP process takes over 5 hours. It is stated that
none of the steps involved in FATP will alter the characteristics of the MLB and/or SLB that will
emerge during the SMT process.
ISSUES:
(1) What is the country of origin for marking purposes of the Smart Glasses?
(2) Whether the Smart Glasses are subject to Section 301 measures?
LAW AND ANALYSIS:
(1) Country of Origin Marking
The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. §
1304(a)), provides that unless excepted, “every article of foreign origin (or its container …)
imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and
permanently as the nature of the article (or container) will permit in such manner as to indicate to
an ultimate purchaser in the United States the English name of the country of origin of the
article.” Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser
should be able to know by an inspection of the marking on imported goods the country of which
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the goods {are} the product. The evident purpose is to mark the goods so that at the time of
purchase the ultimate purchaser may, by knowing where the goods were produced, be able to
buy or refuse to buy them, if such marking should influence his will.” United States v.
Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Part 134 of Title 19 of the Code of Federal
Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C.
§ 1304. 19 C.F.R. § 134.1(b) provides as follows:
(b) Country of origin. “Country of origin” means 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 {the marking laws and regulations}.
The test for determining whether a substantial transformation occurs 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. Texas Instruments Inc. v. United States, 681 F.2d 778 (CCPA 1982).
This determination is based on the totality of the evidence. National Hand Tool Corp. v. United
States, 16 Ct. Int’l Trade 308, 312 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). The U.S. Court
of International Trade (“CIT”) has stated that “if the manufacturing or combining process is
merely a minor one which leaves the identity of the imported article intact, a substantial
transformation has not occurred.” Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 1029 (Ct.
Int’l Trade 1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (per curiam).
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, or use are primary considerations in such cases.
Additionally, factors such as the resources expended on product design and development, the
extent and nature of post-assembly inspection and testing procedures, and worker skill required
during the manufacturing process may be considered when determining whether a substantial
transformation has occurred. No one factor is determinative. See e.g., Headquarters Ruling
Letter (“HQ”) H311606, dated June 16, 2021, and HQ H302801, dated October 3, 2019.
The CIT has indicated that “{f}or courts to find a change in character, there often needs
to be a substantial alteration in the characteristics of the article or components.” Energizer
Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1318 (2016) (citing Ran-Paige Co., Inc. v.
United States, 35 Fed. Cl. 117, 121 (1996) and National Hand Tool Corp. v. United States, 16
Ct. Int’l Trade 311 . Courts have also considered “the ‘essence’ of a completed article to
determine whether an imported article has undergone a change in character as a result of post
importation processing.” Id. (citing Uniden America Corp. v. United States, 120 F. Supp. 2d
1091, 1095-1098 (Ct. Int’l Trade 2000) and Uniroyal, Inc., 542 F. Supp. 1030). In Uniroyal,
Inc., the court determined that the shoe upper was “the very essence of the completed shoe” and
that the attachment of the imported shoe uppers to an outer sole in the United States was a
“minor manufacturing or combining process which leaves the identity of the upper intact,”
therefore, the shoe upper was not substantially transformed in the United States. 542 F. Supp. at
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1029-1030. The court also noted that the minor assembly operation in the United States
“require{d} only a small fraction of the time and cost involved in producing the uppers.” Id. at
1030.
“CBP has consistently held that the assembly of components onto a printed circuit board
is a substantial transformation.” HQ H311447, dated September 10, 2020. “With respect to
printed circuit boards, Customs has ruled that the complete assembly of all the components onto
a printed circuit board was a substantial transformation of the printed circuit board because the
assembly process was complex and involved a considerable amount of skill and time.” HQ
735306, dated December 21, 1993. “The SMT operations result in a new and different product
with an overall use and function different than any one function of the individual components.
Each individual component serves a particular purpose or function once incorporated into the
PCBA. Prior to the SMT operations, these components are stand-alone, general use items.” HQ
H302801, dated October 3, 2019.
The subject Smart Glasses are similar in some ways to the wearable electronic smart
device in HQ H302801. In that ruling, CBP considered the country of origin of a Fitbit device.
CBP determined that, as in HQ H287548, dated March 23, 2018; NY N303008, dated March 8,
2019; and HQ H301910, dated August 5, 2019, the Fitbit’s PCBA represented the essence of the
Fitbit device because it incorporated the electronic components that together gave the smart
device its functionality and enabled the device to operate as intended. In HQ H302801, CBP
stated that “{t}he unique and full functionality of Fitbit’s devices is only accessed once the
components and subassemblies are integrated and populated into the PCBA,” which is
accomplished by using the SMT process in Taiwan or in another country such as Malaysia or
Indonesia. The individual components, such as the Bluetooth transceivers, once incorporated
into the PCBA through the SMT process, lose their identity because they cannot “individually
carry out the functions of … a smart watch or … track{} the user’s fitness and activity,” and
become “an integral part of the new article.” CBP further stated that the final assembly process
in China, which involved “{a}ttaching the PCBAs into the housing with the vibration motor,
battery, display, and wristband” did not render the PCBAs into a product with a new name,
character, or use. Moreover, CBP determined that the final assembly process required less
training for the workers than the SMT process and was not time intensive. Accordingly, CBP
concluded that the final assembly process in China did not substantially transform the PCBAs.
CBP concluded that the SMT operations in Taiwan or in another country, such as Malaysia or
Indonesia, “result{ed} in a substantial transformation of the electronic components from Taiwan
and the Philippines into a new and different article of commerce with a new name, character, and
use distinct from the components.” Accordingly, CBP determined that the country of origin for
the Fitbit device was where the SMT operations occurred.
Further, in HQ H322417, dated February 23, 2022, CBP found that the PCBAs were the
essence of a smartwatch with a different name, character and use from the components and the
blank circuit board that underwent the SMT process. The smartwatch was composed of between
800 and 900 components, more than 700 of which were incorporated into two PCBAs using the
SMT process in Taiwan. When incorporated onto the printed circuit board, the individual
components and the blank printed circuit board developed a new name, a PCBA. See HQ
H311447, dated September 10, 2020 (stating that “CBP has consistently held that the assembly
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of components onto a printed circuit board is a substantial transformation”), and HQ H302801,
dated October 3, 2019.
However, the country of origin of a PCBA does not automatically determine an article’s
country of origin. In HQ H328859, dated June 10, 2024, CBP found that, even though the PCBA
of a printer was manufactured in Japan, the country of origin of the printer was China. By
quantity, approximately 97 percent of all components for the printer were produced in China.
Further, CBP found that, although the PCBA and Japanese-origin firmware enabled the thermal
printers to communicate with external devices and process the images to be printed, other
components and assemblies were also critical in enabling the printer to form text or images and
apply heat to the paper to create text or images.
In this case, the individual components and the blank circuit board undergo a change in
character when the components are assembled onto the blank circuit board and become PCBAs
via the SMT process. The PCBAs in the instant case, like the PCBAs in HQ H302801, form the
“brain” of the device and enable the device to function as intended by design. Through the SMT
process, the components, including the [ ] chipsets in each set of glasses, change the character
from individual components capable of limited functions and a blank circuit board incapable of
any functions, to PCBAs that represent the essence of the Smart Glasses, because they enable the
Smart Glasses to function.
The individual components and the blank circuit board undergo a change in use when the
components are assembled onto the blank circuit board and become the PCBA via the SMT
process. Like some of the components in HQ H302801, the individual components and blank
circuit board are “stand-alone, general use items” that are usable in other devices and do not
alone accomplish the full functionality of the Smart Glasses. In this case, the MLBs allow the
device to use AI functionality, capture photos and videos for consumption or sharing through the
companion app, listen to audio, make and receive voice calls, and send and receive text
messages. Before the components are assembled onto the blank circuit board, each of the
individual components is only capable of limited functions and the blank circuit board is not
capable of any functions. The functionality of the Smart Glasses is dependent on the collective
capabilities of the PCBAs.
Further, even though a majority of the components in these glasses, as in HQ H328859,
are of Chinese origin, CBP does not find that the country of origin of these Smart Glasses is
China. Unlike HQ H328859, the MLB and SLB are the essence or brain of these devices. The
Smart Glasses cannot perform any of their unique, technological functions without them.
Although these glasses may have prescription lenses, we believe that the technological abilities
of these Smart Glasses are the driving force for consumer desire of this product. The other
elements of the Smart Glasses provide ancillary benefits but primarily allow users to access the
content of the MLB and SLB. The additional components added, as in Uniroyal, do not change
the essence of the Smart Glasses provided by these PCBAs.
Although the FATP process occurring in China also takes a significant amount of time,
CBP is satisfied that, because the MLB and SLB are the “brain” of the Smart Glasses, the FATP
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does not result in a substantial transformation. After the MLB and SLB have been assembled, the
Smart Glasses do not undergo any operations that change their name, character, or use.
Based on the facts presented, we conclude that the PCBAs are the essence of the Smart
Glasses, and the Smart Glasses are products of Vietnam, where the PCBAs are manufactured
through SMT. The Smart Glasses should be marked accordingly at the time of importation into
the United States.
(2) Section 301 measures
The United States Trade Representative has determined that an additional ad valorem
duty will be imposed on certain Chinese imports pursuant to USTR’s authority under Section
301(b) of the Trade Act of 1974 (“Section 301 measures”). See Section XXII, Chapter 99,
Subchapter III, U.S. Note 20, HTSUS. The substantial transformation analysis is applicable
when determining the country of origin for purposes of applying Section 301 measures. See HQ
H301494, dated October 29, 2019, and HQ H301619, dated November 6, 2018.
In this case, the Smart Glasses are not subject to the additional Section 301 measures
because the country of origin of the Smart Glasses is Vietnam, where the PCBAs are
manufactured by SMT operations.
HOLDING:
The country of origin of the Smart Glasses for purposes of marking and for purposes of
additional Section 301 measures is Vietnam. Therefore, the Smart Glasses are not subject to
Section 301 measures.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “{e}ach ruling letter is issued on
the assumption that all of the information furnished in connection with the ruling request and
incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and
complete in every material respect. The application of a ruling letter by a Customs Service field
office to the transaction to which it is purported to relate is subject to the verification of the facts
incorporated in the ruling letter, a comparison of the transaction described therein to the actual
transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this
merchandise is entered. If the documents have been filed without a copy, this ruling should be
brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch
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