MAR-2-85:OT:RR:NC:N2:209
Anthony Jay Chapek
Barco, Inc.
3059 Premiere Pkwy
Duluth, Georgia 30097
RE: The country of origin and marking of a wireless presentation and collaboration system from China
Dear Mr. Chapek:
In your letter dated October 28, 2019, you requested a country of origin marking ruling.
The item concerned is referred to as the CSE-200+ set. This set is a wireless presentation and collaboration system utilized in and designed for medium sized meeting rooms, board rooms, and conference rooms.
The system allows users to share content from their laptop, tablet, or smartphone directly to a presentation screen. Each set contains one base unit, two ClickShare buttons, a power supply, packaging material, and a safety guide. Each set is packaged together in a manner suitable for sale directly to users without repacking.
In use, the buttons, which are transmission devices, are plugged into a laptop, etc. The buttons wirelessly transmit data from the laptop to the base station. The base station receives the transmission and displays the data on a monitor/screen via an HDMI connection. The buttons have an encoder to encode and prepare the audio/video data for transmission. The base unit contains a decoder to decode the received audio/video data. The base unit receives the wireless input from the buttons and controls the content of the meeting room display and the sound of the meeting room’s audio system.
The production of the Clickshare CSE-200+ base unit starts at the SMT (surface-mount technology) line at Qisda in China. Different electrical elements/components sourced in China and abroad are assembled onto one printed circuit board assembly (PCBA). This PCBA is the main/sole processor board within the base unit. Once the PCBA is manufactured, it is tested and then shipped to Taiwan for final assembly and programing.
The PCBA is shipped from Qisda China to the Qisda Taiwan production facility. In Taiwan, the PCBA is assembled into a plastic housing to create the CSE-200+ base unit. The plastic materials used for the assembly are sourced from China.
In addition, the PCBA is programmed/flashed within Taiwan. The Barco flashing of software onto the base unit contains/provides:
• Installation Barco firmware with all Clickshare functionalities
• Assigning serial number to the device
• Assigning MAC addresses to the LAN modules (Local Area Network)
• Setting device country codes and corresponding supported WIFI channels and frequency.
• Flashing a unique security key into the device enabling optimal secured data transfer between the Barco developed ClickShare application and the Barco CSE-200+ base unit.
The Barco Software is developed and designed by the Barco R&D teams located in Belgium (35%), India (29%), Romania (18%), and Taiwan (18%). Before the Barco Software is flashed into the base unit, the PCBA, and therefore the base unit as a whole is non-functional. The Barco software works as the operating system of the PCBA and enables the communication and integration of all hardware components on the PCBA, including the CSE-200+ power management.
Next, the CSE-200+ base unit is paired with the two ClickShare buttons. The ClickShare buttons are made in China. Pairing the two buttons with the base unit and running the Barco ClickShare software enables Barco to deliver an out-of-the-box working device. Before leaving the Qisda Taiwan factory location, all functionalities of the CSE-200+ are validated. To enable the validation of the product, a product specific test software is used. This validation software is designed by the Qisda Taiwan R&D.
After validation of the complete CSE200+ base unit and the paired buttons setting, a visual inspection is performed as a last check to ensure the product quality. At this point, the set is packed with a sellable design and packaged in a manner suitable for sale directly to users without repacking. Each packaged set includes one base unit, two buttons, one power supply, packaging material, and a safety guide.
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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.”
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 PCBA manufactured in China does not undergo a substantial transformation as a result of the assembly and program flashing process that takes place in Taiwan. The PCBA retains its identity as the processor board with a predetermined end use. Therefore, since the PCBA does not undergo a substantial transformation as a result of the Taiwanese processing and the fact that all other components are of Chinese origin, the country of origin of the finished base unit and the packaged set will be China.
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 [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division