CLA-2-85:OT:RR:NC:N2:212
Jeffrey Richardson
Miller, Canfield, Paddock and Stone, PLC
840 West Long Lake Road, Suite 150
Troy, MI 48098
RE: The country of origin of automotive center stack assembly
Dear Mr. Richardson:
In your letter dated April 20, 2022, you requested a country of origin ruling on behalf of your client, Tianma America, Inc.
The merchandise under consideration is described as an automotive integrated center stack assembly, which you state is a control interface used in vehicles to allow the driver to monitor and control vehicle functions. These functions include infotainment systems, climate control, navigation systems, and a variety of others. The finished unit is located in the dash of the vehicle and is comprised of a Printed Circuit Board Assembly (PCBA), a backlight, and a glass LCD display.
You state that there are four primary constituent components that are assembled together in order to form the finished unit. These are referred to as the PCBA, BLU-subassembly, glass panel subassembly, and the deco-class A plastics. The PCBA is manufactured in Malaysia via surface-mount technology. This process adheres all of the components to the bare board including the micro-controller unit, deserializer, LED driver, voltage generators, and various resistors and capacitors.
The BLU-subassembly is a backlight unit manufactured in Japan. The unit is comprised of an LED bar, light guide, and films set within a housing. This subassembly is used to provide a light source to the glass panel.
The glass panel subassembly is manufactured in China and is described as the LCD glass sandwich used for the unit’s display. The subassembly consists of a thin-film transistor (TFT) array, color filter, and liquid crystal layer encapsulated within a housing.
The deco-class A plastics are described as various components that finish out the manufacture of the finished unit. These include front and rear covers, trim, brackets, knobs, switches, and mounting screws. You state that these are sourced from a variety of countries of origin.
The above-referenced subassemblies and components are sent to the company’s facility in Japan for final assembly. The four parts are assembled together via a semi-automated process prior to software being loaded on the device. The unit is then tested and inspected for form and function before it is readied for export 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 assemblies, it is the opinion of this office that the PCBA subassembly manufactured in Malaysia, represents the essential functional component of the finished article. The complex manufacturing process performed in that location renders the end-use predetermined. Though the assembly process performed in Japan adds significant functionality, we find that it does not substantially transform the PCBA into a new and different article of commerce with a name, character, and use distinct from the exported good. Therefore, based upon the facts presented, the country of origin of the automotive integrated center stack assembly will be Malaysia.
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