OT:RR:NC:N1:118
Aaron Marx
Crowell & Moring, LLP
1001 Pennsylvania Ave. NW
Washington, DC 20004
RE: The country of origin of a banknote sorting machine
Dear Mr. Marx:
In your letter dated January 23, 2026, on behalf of your client, Giesecke+Devrient Currency Technology
America, Inc., you requested a ruling on the country of origin of a ProNote 1.5 Gen4 banknote sorting
machine. A comprehensive bill of materials and descriptions of the components and subassemblies of the
machine were included with your submission.
The primary functions of the ProNote 1.5 Gen4 banknote sorting machine are the feeding, sorting,
processing, and verifying of banknotes. The operator places the banknotes into the hopper located at the top
of the machine. The banknotes are then fed into the sorting mechanism for further processing.
The banknote sorting machine will be manufactured in India from components made in various countries.
You state in your submission that the manufacturing process falls into three major phases. First, certain
components and sub-components are manufactured in China for use in the final assembly. Those components
include the Main Body Subassembly, Top Cover Subassembly, Control Panel Subassembly, and other minor
components. These Chinese components are shipped to India for assembly into the final machine.
Second, six printed circuit board assemblies (PCBAs) are manufactured in India from imported components.
The function of each PCBA is identified below:
Core Board Assembly: the “motherboard” of the machine, it is responsible for information collection,
computing and operation of the whole machine.
Main Board Assembly: handles sensor signal switching, necessary signal pre-processing, power
conversion and other functions.
Magnetism Board Subassembly: MG head power supply, magnetic signal amplification, and B infrared
signal transfer.
Key Press Control Board: communicates with the main board, display and control the buttons.
Power Switching Board: handles the conversion from alternating current (AC) to direct current (DC) to
provide low-voltage DC power supply for the control circuit of the whole machine.
External Interface Board: handles data transfer between the external display, serial port, printers,
network, and USB signals.
You state that the assembly process for the PCBAs include several intricate stages, reflecting high to medium
complexity and requires specialized technical expertise.
In the third and final phase of production, the banknote sorting machine is assembled in India from
components sourced in various countries. This includes the Chinese-origin Main Body Subassembly, Top
Cover Subassembly and the Control Panel Subassembly.
When determining the country of origin for purposes of applying current trade remedies under Section 301
and additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling
Letter H301619, dated November 6, 2018. 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, 681 F.2d 778
(C.C.P.A. 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).
Additionally, Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless
excepted, every article of foreign origin imported into the United States 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 United States, the English name of the country of origin
of the article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be
able to know by an inspection of the marking on the imported goods the country of which the goods is the
product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may,
by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should
influence his will.” See United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940).
Part 134 of the U.S. Customs and Border Protection (CBP) Regulations (19 CFR 134) implements the
country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP
Regulations (19 CFR 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” within the meaning of the marking laws and regulations.
Regarding the finished banknote sorting machine, it is our view that the manufacturing and assembly
operations performed in India constitute a substantial transformation of the raw materials and foreign
subassemblies. Although most of the raw material components of the banknote counter originate in China,
the manufacturing process is complicated and requires specialized manufacturing and machines. The
imported materials used to manufacture the ProNote 1.5 Gen4 do not impart the identity or character of a
banknote counter and have no functionality without the PCBAs, which are manufactured in India. It is
therefore the opinion of our office that the country of origin of the ProNote 1.5 Gen4 banknote sorting
machine is India.
The holding set forth above applies only to the specific factual situation and merchandise description as
identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations
(CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the
information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and
complete in every material respect. In the event that the facts are modified in any way, or if the goods do not
conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and
Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2.
Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic
verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection
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, please contact
National Import Specialist Anthony Grossi at [email protected].
Sincerely,
(for)
Denise Faingar
Designated Official Performing the Duties of the Division Director
National Commodity Specialist Division