CLA-2-85:OT:RR:NC:N2:212
Thomas King
Harmonized Tariff Services
37 Cobble Creek Road
Victor, NY 14564
RE: The tariff classification and country of origin of an LCD touchscreen
Dear Mr. King:
In your letter dated January 29, 2020, you requested a tariff classification and country of origin ruling on behalf of your client, E3 Displays, LLC.
The merchandise under consideration is described as an LCD touchscreen display that will be used as a display and control interface for a variety of finished devices. In particular, you state that the touchscreens are typically used in emergency vehicle computers including those used by police, fire, and medical emergency personnel. The display is comprised of an LCD module, capacitive touch sensor, glass cover, flexible printed circuit connector, and a printed circuit assembly. The printed circuit assembly contains driver and control electronics as well as the connections for the unit into which the display will be incorporated.
The applicable subheading for the LCD touchscreen display will be 8543.70.8700, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: …; flat panel displays other than for articles of 8528, except for subheadings 8528.52 or 8528.62…”. The general rate of duty will be free.
You also request a decision as to the country of origin of the subject touchscreen display and describe the manufacturing process as detailed in this paragraph. The capacitive touch sensor and printed circuit assembly originate from Taiwan and are shipped to China. In China, the glass cover and touch sensor are bonded, via adhesive, to the LCD module, which is manufactured in Japan. Next, the printed circuit assembly is attached to the flexible connector and adhered to the back of the unit. The completed touchscreen display is then cleaned and packaged for shipment to the United States.
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.
Regarding the origin of the subject touchscreen display, it is the opinion of this office that the assembly process performed in China is not complex and does not result in a physical change to any of the imported components. Therefore, we must determine which of the constituent components imparts the essence of the finished good. In our view, the Taiwanese origin touch sensor and printed circuit assembly add significant functionality to the finished good and, as such, would impart the essence. Based on the facts presented, it is the opinion of this office that the country of origin of the subject touchscreen display is Taiwan.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current.
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