MAR-2 OT: RR: NC: N4:410
Mr. George R. Tuttle
Tuttle Law Offices
3950 Civic Center Drive
San Rafael, CA 94903
RE: The country of origin of calculators
Dear Mr. Tuttle:
This is in response to your letter dated February 27, 2022, on behalf of your client Calculated Industries, Inc., requesting a country of origin determination for calculators.
The merchandise under consideration is calculators identified as the Calculator Models 4065, 4095, 44080, 4065-UBC and 4019 (the “calculators”). They are used to calculate the necessary metrics to construct roofs, stairs, piping systems, etc. The Calculators each consist of a cover, keypad, case, battery, PCBA (printed circuit board assembly), an LCD (liquid crystal display), and IC (integrated circuit). Most of the components, e.g., covers, cases, batteries, PCBs, LCDs, rubber keys, resistors, capacitors, oscillators, lead wires, screws, etc., are imported from China; and the CPUs (central processing units), etc. are imported from Taiwan.
The manufacturing processing scenario in the Philippines for the country of origin determination of the calculators is described as follows:
Main PCBA Assembly
The printed circuit board (PCB) mechanically supports and electrically connects the electronic components and/or electrical components using conductive tracks, pads, and other features etched from one or more sheets of copper laminated onto and/or between sheets of a non-conductive substrate.
The components for the PCB assembly (“PCBA”) are sourced from various suppliers in China and other countries. The PCBA assembly process takes place in the Philippines. The components that make up the PCBA include (but are not limited to) the printed circuit board (a resin matrix reinforced with glass fibers) and 16 plus components, including design-specified capacitors, resistors, an integrated circuit, and an oscillator.
The components are soldered onto the PCB to both electrically connect and mechanically fasten them to it. The PCB is also printed with conductive carbon-filled inks to provide contact pads and conductors for the rubbery keypad sheet used for the user interface.
Surface Mount Technology (SMT)
Surface-mount equipment (SME), surface-mount device (SMD) and surface-mount technology (SMT) are terms used to describe the process of mounting very small electronic devices to a PCB. The initial step is to program the machine which will place components onto the PCB.
Before entering the SMD, solder paste is applied to the panel with a solder paste printer. A template assures that the application of the paste is limited to the points on the panel where the SMD components are to be placed. The panel enters the SMD where all small electronic components, stored on rotating reels, are placed onto the panel. Some 16 plus capacitors, resistors, an integrated circuit, and an oscillator are rapidly placed onto the panel to the exact location programmed into the SME.
Once populated in a process called “reflow”, the panel passes through an oven causing the soldering paste to liquefy, bonding the components firmly to the board and establishing electrical connectivity of all components of the PCBA. The panel is then cooled, solidifying the solder and fixing the electronic components in position.
Chip-on-Board (“COB”) Mounting
The “brains” of the Calculator Models 4065, 4095, 44080, 4065-UBC, and 4019 are provided by an IC, a microprocessor that is attached to the PCB. The IC is made in Taiwan. In a controlled environment, each utilized pad of the device is then welded to the PCB. The IC is directly attached to the PCB. A device called a “Wire Bonder” is positioned with microscopic precision on each conduction pad used, and then bonds the die to the PCB via ultrasonic vibrations. It will then move to the mating conduction pad on the PCB and weld that wire to the conduction pad used on the printed circuit board. A human operator oversees the operation of the wire bonder to reposition it if needed. The last part of the COB process involves adding a thermal epoxy compound over the die, bonding wires, and connection pads for environmental and mechanical protection of the IC. Calculated Industries’ units mostly use custom-designed IC’s that are proprietary to the Company. They are pre-programmed (in the IC fabrication process), so no programming step is required.
Calculator Assembly
In the Philippines, the Chinese origin LCD will be assembled to one end of a flexible multi-conductor electrical cable using a heat press process. Then the other end of the flexible cable will be heat pressed to the PCB.
A protective sheet is added to the back of the LCD to protect it during battery changes. Small pieces of elastomer are added to assist in shock absorption, and foam glue pads are added to fasten the LCD to the housing.
i) Battery Holder and Contact Assembly
In the Philippines, the battery holder subassembly for Model 4019 will be completed using two plastic parts that are heat-sealed together using an ultrasonic bonding machine. Models 4065, 4095, 44080, and 4065-UBC have a single-piece molded battery cover. Battery clips will then be pressed into specifically designed recesses in plastic housing. Two wires will then be routed through guides and soldered to the PCB to complete the connection.
ii) Mounting the Keypad Membrane Assembly on the PCB and Finishing Steps
In the Philippines, a Chinese origin rubber keypad membrane is combined with the calculator PCB assembly for Models 4065, 4095, 4065-UBC, and 4019. The same process occurs but utilizes hard plastic keys atop a rubber membrane sheet for Model 44080. As mentioned above, the front side of the PCB is selectively printed with conductive carbon patterns. When a key is pressed on the calculator keypad, the conductive pad on the backside of each key selectively presses on a pair of conductive pads on the PCB, completing an electrical circuit that allows the Microprocessor on the PCB to determine which key is being pressed. Individually, neither the PCB nor the membrane rubber is a complete functional keypad, but only can operate as such when mounted together.
After testing, the top of the housing is placed over the rubber pad and LCD and fastened with screws. Once completed, the calculator is laser engraved for lot tracking.
Testing
Extensive testing algorithms are performed. Testing each circuit on the board ensures that all electrical connections are of proper electrical function and quality. Function and parametric tests are performed. A Final Sampling Quality Control is done on select completed calculators.
Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines "country of origin" 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”.
In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative.
Based on the information submitted, the components and parts are imported into the Philippines where they are manufactured into different subassemblies, which are ultimately assembled into the subject calculators. We find that the processing performed in the Philippines with respect to the calculators in the scenario does constitute a substantial transformation of the imported components and parts into "products of" the Philippines. The manufacturing process in the Philippines transforms the non-originating components and parts to produce the finished calculators. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into the Philippines. Therefore, it is of the opinion of this office that the country of origin for the calculators will be the Philippines. As such, the Section 301 trade remedy duties applicable to goods from China will not apply.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Michael Chen at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division