MAR-2-85:OT:RR:NC:N2:209

Monica Lo
Etherwan Systems, Inc.
33F, No. 93, Sec. 1, Xintai 5th Rd., Xizhi Dist.,
New Taipei City, 221
Taiwan

RE: The country of origin and marking of a media converter

Dear Ms. Lo:

In your letter dated September 17, 2020, you requested a country of origin ruling.

The item concerned is referred to as a media converter (model # EL8020-V1E). It provides media conversion between 10/100/1000BASE-TX (cable) and 100/1000 SFP Fiber (cable). This unit is built specifically for mission critical applications in harsh environments.

The media converter is designed and assembled in Taiwan. It consists of a main printed circuit board assembly (PCBA), and various housing/mounting/electrical components. A bill of materials listing all sub-assemblies and components with their countries of origin has been submitted.

The manufacturing process that takes place within Taiwan involves the manufacturing of the printed circuit board assembly (PCBA) using surface mount technology (SMT) and dual in-line processing (DIP). During this process electrical elements (i.e. diodes, transistors, capacitors, etc.) are placed on a printed circuit board and soldered into the circuitry. Once completed, each PCBA is tested. A manufacturing narrative and various flow charts, photographs and diagrams explaining the manufacturing process have been submitted.

Next, the completed PCBA and other housing/support/electrical components from various countries of origin, are assembled into the finished device.

Finally, firmware is installed into the device, and the finished products are inspected.

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).

However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).

Based upon the facts presented, it is the opinion of this office that the manufacturing and assembly processes that take place in Taiwan are substantial and complex. The PCBA which is the dominant component of this device is manufactured within Taiwan and additionally the final assembly processes (housing/brackets/etc.) also takes place within Taiwan. As a result, the country of origin of the finished media converter (model # EL8020-V1E) will be Taiwan for origin and marking purposes at time of importation into the United States.

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 Steven Pollichino at steven.pollichino@cbp.dhs.gov.

Sincerely,

Steven A. Mack
Director
National Commodity Specialist Division