CLA-2-85:OT:RR:NC:N2:201
Mr. Kevin Lai
Laster Tech Co., Ltd
Building F, No. 4, Minxiang St. Zhonghe Dist.
New Taipei City, 235
Taiwan
RE: The tariff classification and country of origin of a Multipurpose LED Driver (MLD) Module from Taiwan
Dear Mr. Lai:
In your letter dated November 17, 2020, you requested a tariff classification and country of origin ruling on behalf of your customer, H.A. Automotive Systems Inc., who will be a supplier for General Motors (GM).
The item under consideration has been identified as a MLD module. It is an electronic device for automotive LED lighting equipment. The module acts as the main processor to control the exterior LED lighting. The materials are purchased from eight (8) countries. The surface-mount technology (SMT) and product assembly process takes place at the Laster Tech Taiwan factory.
In your submission, you present a document overview of a Multipurpose (MLD) LED Driver Module into a lamp assembly. The production procedure is as follows:
SMT Manufacturing Process
SMC Preparation
Solder Paste Printing
Automatic Optical Inspection (AOI)
Components Placement
Automatic Optical Inspection (AOI)
Reflow Soldering
Inspection & ICT Testing
Laser engraving (the Base)
Engraving
Automatic Optical Inspection (AOI)
Plasma Cleaning
Assembly Process
Thermal Paste
PCBA Assembly
Sealing with O ring
Sealing Process (cover)
Final Process
EOL Test
Software Install
QC Inspection
Packaging
QC
The MLD module (final product) will be exported from Taiwan to the main principle, GM, in the United States. The components are manufactured and purchased in China, Malaysia, USA, Japan, Philippines, Korea and Germany. You furnished this information and provided the purchasing cost ratio on the breakdown list.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
The “country of origin” is defined in 19 CFR 134.1(b) 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 country of origin of the MLD module, in our view the assembly operations performed in Taiwan are complex and substantially transform the articles being assembled. Therefore, based upon the facts presented, the MLD is considered a product of Taiwan for origin and marking purposes at time of importation into the United States.
Regarding the classification, in your request you suggest that the item should be classified under subheading 8512.90.6000, Harmonized Tariff Schedule of the United States. You state that the MLD module is similar to the LCU (lighting control unit) found in NY Ruling N313188 (dated August 10, 2020). We agree.
The applicable subheading for the MLD module will be 8512.90.6000, HTSUS, which provides for Electrical lighting or signaling equipment (excluding articles of heading 8539), windshield wipers, defrosters and demisters, of a kind used for cycles or motor vehicles; parts thereof: Parts: Of lighting equipment: Other. The rate of duty will be Free.
The 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 Matthew Sullivan at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division