OT:RR:NC:N1:105
M. Jason Cunningham
Sonnenberg & Cunningham PA
780 Fifth Ave. South
Naples, FL 34102
RE: The country of origin of a laser distance measurer
Dear Mr. Cunningham:
In your letter dated May 5, 2020, on behalf of your client, Great Star Tools, you requested a country of origin ruling.
The merchandise under consideration is identified as a laser distance measurer (“LDM”), also referred to as a laser distance measuring device. LDM’s are utilized by many different trades to accurately, quickly and conveniently measure distances. The device can replace a traditional metal measuring tape and provide additional functionality, such as calculating the area or volume of multiple measurements. The user aims the end of the LDM at an object, such as a wall, and presses the laser-on button to obtain a measurement. Nearly instantly, the LDM emits a laser beam that hits the object, bounces back to the device, and provides an accurate measurement of distance in either metric or imperial units. The device is powered by a rechargeable battery and has an inverted backlight liquid crystal display that indicates the distances and other features. The device can provide single or continuous measurements.
The laser measuring device parts are made in Hungary, China, and Taiwan. In Hungary, the electronic distance measurer (“EDM”) is constructed by soldering a laser diode from Taiwan with a printed circuit board (“PCB”) that was assembled in Hungary from “globally sourced” components. The PCB includes programming code, designed in Switzerland, that is burned onto the Application Specific Integrated Circuit (“ASIC”). All of the components of the EDM circuit board are attached to the printed circuit board in Hungary, including the ASIC which was originally produced in Taiwan. In Hungry, the device is temporarily connected to an external power source and an external display for calibration, testing and laser adjustment, which includes setting each EDM’s software parameters.
A Chinese origin laser lens, consisting of an emitting lens and receiving lens, is attached, then adjusted and calibrated. The emitting lens ensures that the laser beam is emitted parallel to the target, while the receiving lens ensures that the beam is focused upon its return into the detectors. A Chinese metal shielding device is added for safety and performance via soldering. After a final check, the EDM is sent from Hungary to China. In China, final assembly is completed using Chinese parts such as the back and front shell, various rubber and plastic parts, a battery, and a secondary PCB board to connect the battery and liquid crystal display (“LCD”). This process includes some simple soldering, final testing and calibration to ensure the EDM components are properly connected to the remaining parts without compromising its highly accurate measuring. Once assembled, the items are placed in retail packaging for final shipment to the United States.
With regard to your request for the appropriate country of origin of the laser distance measurer, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: “‘Country of origin’ means 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. As stated in HQ 735009 dated July 30, 1993, “The country of origin is the country where the article last underwent a ‘substantial transformation,’ that is, processing which results in a change in the article’s name, character, and use.” In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” 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. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive. Assembly operations that are minimal will generally not result in a substantial transformation.
In this instance, the Hungarian EDM, which contains the range and distance measuring software embedded onto the ASIC, generates and directs the LDM’s laser. While the LCD, battery, and other components are added in China, the processing in Hungary completes an LDM article that is able to be fully tested and calibrated for use as a laser distance measuring device. In fact, during the testing phase of each EDM, an EDM is connected to external power supplies and secondary displays to ensure each unit properly and accurately measures. It is this office’s opinion that the Hungarian EDM, which contains the vast majority of unit’s value and contains the necessary software to perform the precision laser measuring, is not substantially transformed in China, as the addition of the remaining components does not result in an article with a new character and use. In view of these facts, the country of origin for the LDM is Hungary.
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 Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division