CLA-2-85:OT:RR:NC:N2:212
Paula Connelly
Sandler, Travis and Rosenberg, P.A.
100 Trade Center, Suite G-100
Woburn, MA 01801
RE: The country of origin of fiber optic cable assemblies
Dear Ms. Connelly:
In your letter dated July 16, 2020, you requested a tariff classification ruling on behalf of your client, Senko Advanced Components, Inc.
The merchandise under consideration is identified as the Planar Lightwave Circuit (PLC) splitter cable assembly and described as a fiber optic assembly used for various telecommunications and data communication applications. The assembly consists of a single fiber optic wire split into an array of individual wires. Your request covers the module imported in two forms, one without termination connectors attached and one finished with termination connections.
In your request, you state that individual jacketed optical fibers, originating in the U.S., are sent to China. In China, the fibers are bundled and attached to input and output arrays of Chinese origin. A splitter module of South Korean origin is then assembled around the arrayed fibers, splitting the fibers for multiple individual cables. This concludes the process for those imported without termination connections.
For those assemblies that are imported with terminations, you state that connector parts of both Chinese and Taiwanese origin are added to the ends of each optical fiber. The process includes exposing the bare fiber and adhering the ferule module onto the end prior to adding the connector housings.
The “country of origin” is defined in 19 CFR 134.1(b), in pertinent part, 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.”
For tariff purposes, the courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
Further, in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer, the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted, “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article.
With regard to the country of origin of the subject cable assemblies, it is the opinion of this office that the U.S. origin optical fibers are the essential functional component of the finished article. While the processing and assembly completed in China is integral to the function of the assembly in its finished state, we find that the addition of the splitter module and connectors does not substantially transform the U.S. parts into a new and different article of commerce with a name, character, and use distinct from the article exported. Based upon the facts presented, it is the opinion of this office that the origin of the PLC splitter cable assembly, either with or without termination connectors, is the United States.
Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the USA.
This ruling is being issued under the provisions of Part 177 of the Customs 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, contact National Import Specialist Luke LePage at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division