OT:RR:NC:N2:220
Tiffany Lo
SMS InfoComm Corporation
4051 N Highway 121 Suite 200
Grapevine, TX 76051
RE: The country of origin of a motherboard
Dear Ms. Lo:
In your letter dated November 8, 2022, you requested a country of origin ruling.
The merchandise under consideration is identified as the Motherboard, PN N10384-001, which is described as a printed circuit board assembly (PCBA) for use in a commercially available laptop personal computer. In your request, you state that a semi-finished PCBA is shipped from China to the Philippines where additional components are added by soldering.
In your letter, you describe the production process for the Motherboard as beginning in China where numerous integrated circuits (ICs), electronic components, etc. are soldered onto a bare PCB using surface mount and through-hole insertion processes. Specifically absent from the board’s production in China are the BIOS and the CPU ICs. You state that the PCBA is sent to the Philippines where the boards are baked, a solder paste machine applies solder, the Vietnamese origin CPU IC is placed onto the board and soldered using a thermal rework machine, the board is X-rayed and inspected, and the CPU is bonded to the PCBA. Next, you describe the BIOS IC as being programmed and manually soldered onto the PCBA, the fan and heat sink assembly are mounted to the PCBA, and mylar insulation is added to produce a functioning Motherboard. Lastly, you explain that the Motherboard is inspected, tested, and packaged for export to the United States.
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.”
The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
Regarding the country of origin of the Motherboard, in our view and based on the facts presented, the assembly operations conducted in the Philippines are considered complex, where soldering the CPU and the BIOS components onto a semi-finished PCBA produces a physical change in the PCBA to produce a functional Motherboard. Furthermore, while recognized as the processing component, the CPU is also transformed into a new article in name, character, and use as a result of being soldered into the circuit. Therefore, it is the opinion of this office that the assembly operations conducted in the Philippines results in a substantial transformation of the individual components and the Motherboard, PN N10384-001, is a considered a product of the Philippines for origin and marking purposes at the 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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division