CLA-2-85:OT:RR:E:NC:N1:109
Mr. Jeff Chiu
Global4PL Supply Chain Services
2953 Bunker Hill Lane, Suite 400
Santa Clara, CA 95054
RE: The tariff classification of printed circuit board sub-assemblies, the country of origin, and the country of origin marking from Thailand
Dear Mr. Chiu:
This is in response to your letter dated April 28, 2008, which you filed on behalf of your client, Infinera Corporation, 1322 Bordeaux Drive, Sunnyvale, California 94089.
Your letter requests the classification of printed circuit board sub-assemblies utilized in Infinera’s DTN switched wavelength division multiplexing (WDM) system. You have also inquired as to the country of origin and country of origin marking requirements for this merchandise.
It is explained in your letter that Infinera Corporation imports printed circuit board sub-assemblies that have been populated with various electronic components in Thailand. The printed circuit board sub-assemblies, which are also referred to as part number 800-0005-001 and an “optics box”, are designed to be integrated into one of Infinera’s printed circuit board assemblies, the Digital Line Module (“DLM”).
The applicable subheading for the printed circuit board sub-assemblies (part number 800-0005-001, also known as an “optics box”) will be 8517.70.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527, or 8528; parts thereof: Parts." The rate of duty will be free.
You propose not to individually mark the printed circuit board sub-assemblies with their country of origin because they will be further manufactured in the United States by Infinera Corporation. However, upon importation into the United States, the outer shipping cartons containing the printed circuit board sub-assemblies will bear the country of origin “Made in Thailand.”
Your letter states that the imported printed circuit board sub-assemblies are not functional on their own as “stand alone” units and require physical incorporation (via mechanical fastening and optical fiber connections) into a Digital Line Module (DLM) printed circuit board assembly, as well as calibration and testing based on customer specifications. These printed circuit board sub-assemblies are not intended for retail sale in its imported condition because they cannot function in their imported state. It is only upon a sales transaction between Infinera Corporation and its customer that Infinera Corporation executes the further processing on each printed circuit board sub-assembly in the United States by incorporating it into a DLM, as well as calibration and testing, which in turn is installed into an appropriate chassis, along with other required printed circuit board assemblies to comprise a complete Infinera DTN switched wavelength division multiplexing (WDM) system. Based on the information provided, a substantial transformation occurs as a result of the assembly process performed in the United States, yielding the complete Infinera DTN switched WDM system.
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.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 C.F.R. 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d) defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 C.F.R. 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed, and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See 19 C.F.R. 134.35.
In this case, Infinera Corporation is the ultimate purchaser because it subjects the imported printed circuit board sub-assemblies to a process in the United States that substantially transforms them into an article having a different use and character than that of the imported article. Pursuant to 19 C.F.R. 134.35 (a), the imported article itself would be exempt from marking upon importation into the United States. Only the outermost container in which the hardware is imported must be marked to indicate Thailand as the country of origin. Therefore, your proposed marking of “Made in Thailand”, to the outer shipping cartons, is an acceptable country of origin marking.
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 World Wide Web at http://www.usitc.gov/tata/hts/.
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 Linda M. Hackett at 646-733-3015.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division