Notice of Issuance of Final Determination Concerning Printer Cartridges, 44566-44568 [E7-15484]
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44566
Federal Register / Vol. 72, No. 152 / Wednesday, August 8, 2007 / Notices
DEPARTMENT OF HOMELAND
SECURITY
DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
Bureau of Customs and Border
Protection
[FEMA–1709–DR]
Texas; Amendment No. 6 to Notice of
a Major Disaster Declaration
Federal Emergency
Management Agency, DHS.
AGENCY:
ACTION:
Notice.
This notice amends the notice
of a major disaster declaration for the
State of Texas (FEMA–1709–DR), dated
June 29, 2007, and related
determinations.
SUMMARY:
DATES:
Effective Date: July 25, 2007.
FOR FURTHER INFORMATION CONTACT:
Peggy Miller, Disaster Assistance
Directorate, Federal Emergency
Management Agency, Washington, DC
20472, (202) 646–2705.
The notice
of a major disaster declaration for the
State of Texas is hereby amended to
include the following areas among those
areas determined to have been adversely
affected by the catastrophe declared a
major disaster by the President in his
declaration of June 29, 2007.
sroberts on PROD1PC70 with NOTICES
SUPPLEMENTARY INFORMATION:
Cherokee, Runnels, Smith, and Travis
Counties for Individual Assistance.
Brown, Comanche, Hamilton, and Llano
Counties for Individual Assistance (already
designated for Public Assistance, including
direct Federal assistance.)
Hunt, Kaufman, Lamar, McCulloch,
Menard, and Stephens Counties for Public
Assistance, including direct Federal
assistance.
Victoria and Williamson Counties for
Public Assistance, including direct Federal
assistance (already designated for Individual
Assistance.)
(The following Catalog of Federal Domestic
Assistance Numbers (CFDA) are to be used
for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora
Brown Fund Program; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services
Program; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management
Assistance; 97.048, Individuals and
Households Housing; 97.049, Individuals and
Households Disaster Housing Operations;
97.050 Individuals and Households ProgramOther Needs, 97.036, Public Assistance
Grants; 97.039, Hazard Mitigation Grant
Program.)
R. David Paulison,
Administrator, Federal Emergency
Management Agency.
[FR Doc. E7–15449 Filed 8–7–07; 8:45 am]
BILLING CODE 9110–10–P
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Notice of Issuance of Final
Determination Concerning Printer
Cartridges
U.S. Customs and Border
Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
AGENCY:
SUMMARY: This document provides
notice that the Bureau of Customs and
Border Protection (CBP) has issued a
final determination concerning the
country of origin of certain printer
cartridges which may be offered to the
United States Government under an
undesignated government procurement
contract. CBP has concluded that, based
upon the facts presented, the operations
performed at the United States facility
do not result in a substantial
transformation of the goods. Therefore,
the goods will not be considered to be
products of the United States.
DATES: The final determination was
issued on August 2, 2007. A copy of the
final determination is attached. Any
party-at-interest, as defined in 19 CFR
177.22(d), may seek judicial review of
this final determination within 30 days
of August 8, 2007.
FOR FURTHER INFORMATION CONTACT:
Gerry O’Brien, Valuation and Special
Programs Branch, Regulations and
Rulings, Office of International Trade
(202–572–8792).
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on August 2, 2007,
pursuant to subpart B of part 177,
Customs Regulations (19 CFR part 177,
subpart B), CBP issued a final
determination concerning the country of
origin of certain printer cartridges
which may be offered to the United
States Government under an
undesignated government procurement
contract. This final determination, in
HQ H009107, was issued at the request
of Nukote International, Inc. under
procedures set forth at 19 CFR part 177,
subpart B, which implements Title III of
the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511–18).
In the final determination, CBP
concluded that, based upon the facts
presented, the operations performed at
the United States facility do not result
in a substantial transformation of the
goods. Therefore, the goods will not be
considered to be products of the United
States.
Section 177.29, Customs Regulations
(19 CFR 177.29), provides that notice of
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final determinations shall be published
in the Federal Register within 60 days
of the date the final determination is
issued. Section 177.30, CBP Regulations
(19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR
177.22(d), may seek judicial review of a
final determination within 30 days of
publication of such determination in the
Federal Register.
Dated: August 2, 2007.
Sandra L. Bell,
Executive Director, Office of Regulations and
Rulings, Office of International Trade.
HQ H009107
August 2, 2007.
MAR–2–05 OT:RR:CTF:VS H009107 GOB
CATEGORY: Marking.
G. Matthew Koehl, Esq., Kirkpatrick &
Lockhart Preston Gates Ellis LLP., 1735
New York Avenue NW., Suite 500,
Washington, DC 20006–5221.
RE: U.S. Government Procurement; Title III,
Trade Agreements Act of 1979 (19 U.S.C.
2511); Subpart B, Part 177, CBP Regulations;
Country of Origin of Printer Cartridges
Dear Mr. Koehl:
This is in response to your letter of March
26, 2007, requesting a final determination on
behalf of Nukote International, Inc.
(‘‘Nukote’’), pursuant to subpart B of Part
177, Customs and Border Protection (‘‘CBP’’)
Regulations (19 CFR 177.21 et seq.). Under
these regulations, which implement Title III
of the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511 et seq.), CBP issues
country of origin advisory rulings and final
determinations as to whether an article is or
would be a product of a designated country
or instrumentality for the purpose of granting
waivers of certain ‘‘Buy American’’
restrictions in U.S. law or practice for
products offered for sale to the U.S.
Government.
This final determination concerns the
country of origin of certain laser printer
cartridge models. We note that Nukote is a
party-at-interest within the meaning of 19
CFR 177.22(d)(1) and is entitled to request
this final determination.
FACTS
You request a final determination with
respect to three manufacturing process
scenarios and resulting end products. The
first scenario involves laser toner cartridges
for color laser printers, including both color
and monochrome (black) cartridges. The
second scenario involves monochrome
(black) laser toner cartridges for conventional
laser printers with an electronic chip. The
third scenario involves monochrome (black)
laser toner cartridges for conventional laser
printers without an electronic chip.
You describe the first process as follows.
Nukote collects empty toner cartridges from
end users at collection sites in the United
States and, to a substantially lesser extent, in
Canada, Singapore, the United Kingdom,
Hong Kong and China. Nukote also purchases
used printer cartridges from United States-
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08AUN1
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based brokers. These used printer cartridges
were originally manufactured at various
locations in different countries. Nukote has
no process for identifying the country of
origin of the empty cartridges.
Nukote then sends the cartridges to a
foreign country, where they are sorted to
remove units which cannot be
remanufactured. This process identifies
cartridge type and printer type, and removes
damaged and broken parts and units that
cannot be processed. The cartridges which
can be remanufactured are then shipped to a
different foreign facility, where Nukote has
direct management and operational
responsibility and where the operations
performed are based on proprietary
specifications developed by Nukote. At this
facility, the used cartridges are split open,
disassembled and separated into three subassemblies—the developer section, the toner
hopper, and the waste hopper. The original
doctor blade is cleaned and the original
primary charge roller is sandblasted and
recoated. The drum is removed from the
waste hopper, which, along with the toner
hopper, is scraped to remove plastic flash
and residual foam seal material, and then
blown out to remove residual toner from the
original manufacturer. New foam seals are
installed on the toner hopper and waste
hopper units. New waste hopper drums,
recovery blades and wiper blades are also
installed. After being rebuilt with a clean
blade, roller and gears, the developer section
is temporarily assembled with a ‘‘host’’ toner
section (the ‘‘host’’ hopper is used repeatedly
for this test; it is not a part of an operating
toner cartridge) and the rebuilt waste hopper.
The temporarily-assembled unit is inserted in
a printer which has been ‘‘hot-wired’’ to
bypass the need for an electronic chip, which
has not been installed. The cartridge then
undergoes a test print to check that the seals
do not leak and are capable of producing
acceptable quality print. This mechanical test
does not evaluate whether the cartridge will
operate on its own in a printer. It could not
do so, as the cartridge has not been charged
with toner and the electronic chip has not
been installed; without the chip, the cartridge
is not operable, as it cannot communicate
with the printer. The ‘‘host’’ hopper is then
removed and the three main sub-assembly
components (the developer section, the toner
hopper, and the waste hopper) are prepared
for shipment to Nukote’s Rochester facility.
Final assembly of the printer cartridges
occurs at Nukote’s Rochester, New York
facility. You state that the substantial
majority of the operations at this facility are
performed by skilled Nukote quality control
and technical operations staff, which must
complete a minimum of three to four weeks
of training in order to become certified to
engage in this activity. These operations
consist of the following: (1) Incoming Quality
Inspection. You state that the goods arrive
without the electronic chip and toner that are
necessary for the printer cartridge to perform
any useful function. (2) Filling and Sealing.
The toner hopper is filled with new chemical
toner and the hopper is sealed with a plug.
The toner in the first manufacturing process
scenario is either of U.S. or foreign origin. (3)
Mechanical Assembly. The waste hopper,
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developer section and toner hopper are
assembled with screws, springs and clips. (4)
Testing. Nukote ‘‘process tests’’ ten percent
of the units for print quality and leakage. All
of this testing is performed by a Nukote
quality control technician and/or quality
engineer. Nukote also ‘‘life tests’’ one to two
percent of the units. During this process, all
seals, clips, blades, PCRs, and rollers are
visually inspected for cleanliness and proper
assembly. (5) Inspection. One hundred
percent of the units are visually inspected
against a defined inspection criteria. (6)
External Cleaning. The exterior of the units
is cleaned by a pneumatic air line, a toner
dust cloth and a dust collection device. (7)
Installation of a Computer Chip. A customengineered and IP-protected chip, developed
and manufactured in the United States, is
manually installed in each unit. The chip
enables the printer software to recognize the
correct laser cartridge and permits the printer
to tabulate the page count and toner volume
level. The cartridge is non-functional without
this chip. (8) Advance Preparation for
Shipment. A shipping protector, lot control
tag and shipping seals are applied. (9)
Packaging for Shipment. The unit is placed
in a shipping bag, protective endcaps are
installed, an instruction sheet is added, a
customer label is applied, and the unit is
sealed in a customer-specific box. (10)
Skidding and Shipment. The units are placed
on a skid and sent to the shipping warehouse
for movement to a distribution center in
Tennessee. The cost of U.S. origin
components for this scenario will vary from
approximately 21% to 74%, depending on
whether the toner is of U.S. or foreign origin.
The second process scenario involves
conventional monochrome printer cartridges
with computer chips. This process is
substantially the same as the first process,
with the following exceptions. The
disassembly process at the foreign facility is
slightly less complex because the cartridge
itself is less complex than a chemical toner
color cartridge. The toner is always of U.S.
origin and is much less expensive than the
toner for the color cartridge. The cost of the
drum is considerably less than in the first
scenario. The cost of U.S. origin components
will range from approximately 69% to 76%,
depending on whether certain components
are of U.S. or foreign origin. As in the first
scenario, a custom-engineered and IPprotected chip, developed and manufactured
in the United States, is manually installed in
each unit. The chip enables the printer
software to recognize the correct laser
cartridge and permits the printer to tabulate
the page count and toner volume level.
The third manufacturing process scenario
is different from the second only in that there
is no computer chip in the third scenario.
The cost of U.S. origin components will
range from approximately 60% to 68%,
depending on whether certain components
are of U.S. or foreign origin. As in the second
scenario, the toner is always of U.S. origin.
Issue
What is the country of origin of the subject
laser printer cartridge models for the purpose
of U.S. Government procurement?
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44567
Law and Analysis
Pursuant to Subpart B of Part 177, 19 CFR
177.21 et seq., which implements Title III of
the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511 et seq.), CBP issues
country of origin advisory rulings and final
determinations as to whether an article is or
would be a product of a designated country
or instrumentality for the purposes of
granting waivers of certain ‘‘Buy American’’
restrictions in U.S. law or practice for
products offered for sale to the U.S.
Government.
Under the rule of origin set forth under 19
U.S.C. 2518(4)(B):
An article is a product of a country or
instrumentality only if (i) it is wholly the
growth, product, or manufacture of that
country or instrumentality, or (ii) in the case
of an article which consists in whole or in
part of materials from another country or
instrumentality, it has been substantially
transformed into a new and different article
of commerce with a name, character, or use
distinct from that of the article or articles
from which it was so transformed.
See also, 19 CFR 177.22(a).
In determining whether the combining of
parts or materials constitutes a substantial
transformation, the determinative issue is the
extent of operations performed and whether
the parts lose their identity and become an
integral part of the new article. Belcrest
Linens v. United States, 573 F. Supp. 1149
(Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368
(Fed. Cir. 1984). Assembly operations that are
minimal or simple, as opposed to complex or
meaningful, will generally not result in a
substantial transformation. See, C.S.D. 80–
111, C.S.D. 85–25, C.S.D. 89–110, C.S.D. 89–
118, C.S.D. 90–51, and C.S.D. 90–97. In
C.S.D. 85–25, 19 Cust. Bull. 844 (1985), CBP
held that for purposes of the Generalized
System of Preferences (‘‘GSP’’), the assembly
of a large number of fabricated components
onto a printed circuit board in a process
involving a considerable amount of time and
skill resulted in a substantial transformation.
In that case, in excess of 50 discrete
fabricated components (such as resistors,
capacitors, diodes, integrated circuits,
sockets, and connectors) were assembled.
Whether an operation is complex and
meaningful depends on the nature of the
operation, including the number of
components assembled, number of different
operations, time, skill level required,
attention to detail, quality control, the value
added to the article, and the overall
employment generated by the manufacturing
process.
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, or use are primary considerations
in such cases. Additionally, factors such as
the resources expended on product design
and development, extent and nature of post-
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Federal Register / Vol. 72, No. 152 / Wednesday, August 8, 2007 / Notices
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.
Nukote collects empty toner cartridges
from end users at collection sites in the
United States and, to a substantially lesser
extent, in Canada, Singapore, the United
Kingdom, Hong Kong and China. Nukote also
purchases used printer cartridges from
United States-based brokers. These used
printer cartridges were originally
manufactured at various locations in
different countries. The cartridges are sorted
at one foreign location and are then
processed at a second foreign location and
subsequently in the United States.
At the second foreign location, the
cartridges are split open, disassembled, and
separated into three sub-assemblies. Worn
components of the sub-assemblies are
replaced and made operational again. This
work constitutes disassembly of the used
cartridges, as well as certain preparation for
the processing which will occur in the
United States. At this point the goods are
tested. It is claimed that the sub-assemblies
are not functional without the chip which is
later installed in the United States (at least
in the two scenarios where the chip is
involved).
The processing which occurs at Nukote’s
Rochester, New York facility includes
inspection, filling and sealing, mechanical
assembly, testing, cleaning, installation of a
computer chip, preparation and packaging
for shipment, and shipment. We do not
believe these operations are complex enough
to result in a substantial transformation of the
sub-assemblies. The sub-assemblies are
essentially made functional again at the
foreign facility. While the chip which makes
the cartridge work (in two of the three
scenarios) is inserted in the United States, we
find that the bringing together of the subassemblies in the United States does not
result in a substantial transformation of the
goods. For example, these operations in the
United States are not as significant as those
in NY G87305, where the cartridges were
completely disassembled; salvageable parts
were sorted into bins, cleaned, and
reconditioned; major components, including
the OPC drum and toner were replaced; and
other new components were added.
In HQ 561232, dated April 20, 2004, CBP
considered the steps necessary to create a
fully functional FM tuner, including
adjustments to the oscillator coil, two filter
coils, and the demodulator coil, selecting and
installing two resistors, and enclosing the
item in a metal case. CBP held that ‘‘while
these additional operations are required to
create a fully functional product, and are of
a certain complexity requiring technical skill,
they do not change the essential character of
the PCBA [printed circuit board assembly],
which at this stage of production has the
characteristics of the imported FM tuner but
has not quite achieved full functionality.’’
Therefore, CBP held that there was not a
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second substantial transformation in the
Philippines. We believe that HQ 561232 is
relevant here as the imported sub-assemblies
possess the characteristics of the printer
cartridge but, as imported, have not achieved
full functionality.
Holding
The operations performed at Nukote’s
Rochester, New York facility do not result in
a substantial transformation of the cartridges.
Therefore, the cartridges will not be
considered to be products of the United
States.
Sincerely,
Sandra L. Bell,
Executive Director, Office of Regulations and
Rulings, Office of International Trade.
[FR Doc. E7–15484 Filed 8–7–07; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5117–N–63]
Notice of Submission of Proposed
Information Collection to OMB;
Assessment of FHA Lender Customer
Satisfaction-Survey of Businesses
Office of the Chief Information
Officer, HUD.
ACTION: Notice.
AGENCY:
SUMMARY: The proposed information
collection requirement described below
has been submitted to the Office of
Management and Budget (OMB) for
review, as required by the Paperwork
Reduction Act. The Department is
soliciting public comments on the
subject proposal.
HUD has recently undertaken efforts
to modernize programs and processes in
order to maintain a strong lending
position with underserved and
underserved borrowers. This
information collection will serve to
evaluate the level of satisfaction
customers have with these new
initiatives. The sample will consist of
1,000 FHA originating lenders with a
production level of at least 28 loans for
FY 2005.
DATES: Comments Due Date: September
7, 2007.
ADDRESSES: Interested persons are
invited to submit comments regarding
this proposal. Comments should refer to
the proposal by name and/or OMB
approval Number (2502–NEW) and
should be sent to: HUD Desk Officer,
Office of Management and Budget, New
Executive Office Building, Washington,
DC 20503; fax: 202–395–6974.
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FOR FURTHER INFORMATION CONTACT:
Lillian Deitzer, Departmental Reports
Management Officer, QDAM,
Department of Housing and Urban
Development, 451 Seventh Street, SW.,
Washington, DC 20410; e-mail:
Lillian_L._Deitzer@HUD.gov or
telephone (202) 708–2374. This is not a
toll-free number. Copies of available
documents submitted to OMB may be
obtained from Ms. Deitzer or from
HUD’s Web site at https://
www5.hud.gov:63001/po/i/icbts/
collectionsearch.cfm.
This
notice informs the public that the
Department of Housing and Urban
Development has submitted to OMB a
request for approval of the information
collection described below. This notice
is soliciting comments from members of
the public and affecting agencies
concerning the proposed collection of
information to: (1) Evaluate whether the
proposed collection of information is
necessary for the proper performance of
the functions of the agency, including
whether the information will have
practical utility; (2) Evaluate the
accuracy of the agency’s estimate of the
burden of the proposed collection of
information; (3) Enhance the quality,
utility, and clarity of the information to
be collected; and (4) Minimize the
burden of the collection of information
on those who are to respond; including
through the use of appropriate
automated collection techniques or
other forms of information technology,
e.g., permitting electronic submission of
responses.
This notice also lists the following
information:
Title of Proposal: Assessment of FHA
Lender Customer Satisfaction-Survey of
Businesses.
OMB Approval Number: 2502–NEW.
Form Numbers: None.
Description of the Need for the
Information and its Proposed Use:
HUD has recently undertaken efforts
to modernize programs and processes in
order to maintain a strong lending
position with underserved and
underserved borrowers. This
information collection will serve to
evaluate the level of satisfaction
customers have with these new
initiatives. The sample will consist of
1,000 FHA originating lenders with a
production level of at least 28 loans for
FY 2005.
Frequency of Submission: On
occasion, annually.
SUPPLEMENTARY INFORMATION:
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Agencies
[Federal Register Volume 72, Number 152 (Wednesday, August 8, 2007)]
[Notices]
[Pages 44566-44568]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15484]
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Bureau of Customs and Border Protection
Notice of Issuance of Final Determination Concerning Printer
Cartridges
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
-----------------------------------------------------------------------
SUMMARY: This document provides notice that the Bureau of Customs and
Border Protection (CBP) has issued a final determination concerning the
country of origin of certain printer cartridges which may be offered to
the United States Government under an undesignated government
procurement contract. CBP has concluded that, based upon the facts
presented, the operations performed at the United States facility do
not result in a substantial transformation of the goods. Therefore, the
goods will not be considered to be products of the United States.
DATES: The final determination was issued on August 2, 2007. A copy of
the final determination is attached. Any party-at-interest, as defined
in 19 CFR 177.22(d), may seek judicial review of this final
determination within 30 days of August 8, 2007.
FOR FURTHER INFORMATION CONTACT: Gerry O'Brien, Valuation and Special
Programs Branch, Regulations and Rulings, Office of International Trade
(202-572-8792).
SUPPLEMENTARY INFORMATION: Notice is hereby given that on August 2,
2007, pursuant to subpart B of part 177, Customs Regulations (19 CFR
part 177, subpart B), CBP issued a final determination concerning the
country of origin of certain printer cartridges which may be offered to
the United States Government under an undesignated government
procurement contract. This final determination, in HQ H009107, was
issued at the request of Nukote International, Inc. under procedures
set forth at 19 CFR part 177, subpart B, which implements Title III of
the Trade Agreements Act of 1979, as amended (19 U.S.C. 2511-18).
In the final determination, CBP concluded that, based upon the
facts presented, the operations performed at the United States facility
do not result in a substantial transformation of the goods. Therefore,
the goods will not be considered to be products of the United States.
Section 177.29, Customs Regulations (19 CFR 177.29), provides that
notice of final determinations shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial
review of a final determination within 30 days of publication of such
determination in the Federal Register.
Dated: August 2, 2007.
Sandra L. Bell,
Executive Director, Office of Regulations and Rulings, Office of
International Trade.
HQ H009107
August 2, 2007.
MAR-2-05 OT:RR:CTF:VS H009107 GOB
CATEGORY: Marking.
G. Matthew Koehl, Esq., Kirkpatrick & Lockhart Preston Gates Ellis
LLP., 1735 New York Avenue NW., Suite 500, Washington, DC 20006-
5221.
RE: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country of
Origin of Printer Cartridges
Dear Mr. Koehl:
This is in response to your letter of March 26, 2007, requesting
a final determination on behalf of Nukote International, Inc.
(``Nukote''), pursuant to subpart B of Part 177, Customs and Border
Protection (``CBP'') Regulations (19 CFR 177.21 et seq.). Under
these regulations, which implement Title III of the Trade Agreements
Act of 1979, as amended (19 U.S.C. 2511 et seq.), CBP issues country
of origin advisory rulings and final determinations as to whether an
article is or would be a product of a designated country or
instrumentality for the purpose of granting waivers of certain ``Buy
American'' restrictions in U.S. law or practice for products offered
for sale to the U.S. Government.
This final determination concerns the country of origin of
certain laser printer cartridge models. We note that Nukote is a
party-at-interest within the meaning of 19 CFR 177.22(d)(1) and is
entitled to request this final determination.
FACTS
You request a final determination with respect to three
manufacturing process scenarios and resulting end products. The
first scenario involves laser toner cartridges for color laser
printers, including both color and monochrome (black) cartridges.
The second scenario involves monochrome (black) laser toner
cartridges for conventional laser printers with an electronic chip.
The third scenario involves monochrome (black) laser toner
cartridges for conventional laser printers without an electronic
chip.
You describe the first process as follows. Nukote collects empty
toner cartridges from end users at collection sites in the United
States and, to a substantially lesser extent, in Canada, Singapore,
the United Kingdom, Hong Kong and China. Nukote also purchases used
printer cartridges from United States-
[[Page 44567]]
based brokers. These used printer cartridges were originally
manufactured at various locations in different countries. Nukote has
no process for identifying the country of origin of the empty
cartridges.
Nukote then sends the cartridges to a foreign country, where
they are sorted to remove units which cannot be remanufactured. This
process identifies cartridge type and printer type, and removes
damaged and broken parts and units that cannot be processed. The
cartridges which can be remanufactured are then shipped to a
different foreign facility, where Nukote has direct management and
operational responsibility and where the operations performed are
based on proprietary specifications developed by Nukote. At this
facility, the used cartridges are split open, disassembled and
separated into three sub-assemblies--the developer section, the
toner hopper, and the waste hopper. The original doctor blade is
cleaned and the original primary charge roller is sandblasted and
recoated. The drum is removed from the waste hopper, which, along
with the toner hopper, is scraped to remove plastic flash and
residual foam seal material, and then blown out to remove residual
toner from the original manufacturer. New foam seals are installed
on the toner hopper and waste hopper units. New waste hopper drums,
recovery blades and wiper blades are also installed. After being
rebuilt with a clean blade, roller and gears, the developer section
is temporarily assembled with a ``host'' toner section (the ``host''
hopper is used repeatedly for this test; it is not a part of an
operating toner cartridge) and the rebuilt waste hopper. The
temporarily-assembled unit is inserted in a printer which has been
``hot-wired'' to bypass the need for an electronic chip, which has
not been installed. The cartridge then undergoes a test print to
check that the seals do not leak and are capable of producing
acceptable quality print. This mechanical test does not evaluate
whether the cartridge will operate on its own in a printer. It could
not do so, as the cartridge has not been charged with toner and the
electronic chip has not been installed; without the chip, the
cartridge is not operable, as it cannot communicate with the
printer. The ``host'' hopper is then removed and the three main sub-
assembly components (the developer section, the toner hopper, and
the waste hopper) are prepared for shipment to Nukote's Rochester
facility.
Final assembly of the printer cartridges occurs at Nukote's
Rochester, New York facility. You state that the substantial
majority of the operations at this facility are performed by skilled
Nukote quality control and technical operations staff, which must
complete a minimum of three to four weeks of training in order to
become certified to engage in this activity. These operations
consist of the following: (1) Incoming Quality Inspection. You state
that the goods arrive without the electronic chip and toner that are
necessary for the printer cartridge to perform any useful function.
(2) Filling and Sealing. The toner hopper is filled with new
chemical toner and the hopper is sealed with a plug. The toner in
the first manufacturing process scenario is either of U.S. or
foreign origin. (3) Mechanical Assembly. The waste hopper, developer
section and toner hopper are assembled with screws, springs and
clips. (4) Testing. Nukote ``process tests'' ten percent of the
units for print quality and leakage. All of this testing is
performed by a Nukote quality control technician and/or quality
engineer. Nukote also ``life tests'' one to two percent of the
units. During this process, all seals, clips, blades, PCRs, and
rollers are visually inspected for cleanliness and proper assembly.
(5) Inspection. One hundred percent of the units are visually
inspected against a defined inspection criteria. (6) External
Cleaning. The exterior of the units is cleaned by a pneumatic air
line, a toner dust cloth and a dust collection device. (7)
Installation of a Computer Chip. A custom-engineered and IP-
protected chip, developed and manufactured in the United States, is
manually installed in each unit. The chip enables the printer
software to recognize the correct laser cartridge and permits the
printer to tabulate the page count and toner volume level. The
cartridge is non-functional without this chip. (8) Advance
Preparation for Shipment. A shipping protector, lot control tag and
shipping seals are applied. (9) Packaging for Shipment. The unit is
placed in a shipping bag, protective endcaps are installed, an
instruction sheet is added, a customer label is applied, and the
unit is sealed in a customer-specific box. (10) Skidding and
Shipment. The units are placed on a skid and sent to the shipping
warehouse for movement to a distribution center in Tennessee. The
cost of U.S. origin components for this scenario will vary from
approximately 21% to 74%, depending on whether the toner is of U.S.
or foreign origin.
The second process scenario involves conventional monochrome
printer cartridges with computer chips. This process is
substantially the same as the first process, with the following
exceptions. The disassembly process at the foreign facility is
slightly less complex because the cartridge itself is less complex
than a chemical toner color cartridge. The toner is always of U.S.
origin and is much less expensive than the toner for the color
cartridge. The cost of the drum is considerably less than in the
first scenario. The cost of U.S. origin components will range from
approximately 69% to 76%, depending on whether certain components
are of U.S. or foreign origin. As in the first scenario, a custom-
engineered and IP-protected chip, developed and manufactured in the
United States, is manually installed in each unit. The chip enables
the printer software to recognize the correct laser cartridge and
permits the printer to tabulate the page count and toner volume
level.
The third manufacturing process scenario is different from the
second only in that there is no computer chip in the third scenario.
The cost of U.S. origin components will range from approximately 60%
to 68%, depending on whether certain components are of U.S. or
foreign origin. As in the second scenario, the toner is always of
U.S. origin.
Issue
What is the country of origin of the subject laser printer
cartridge models for the purpose of U.S. Government procurement?
Law and Analysis
Pursuant to Subpart B of Part 177, 19 CFR 177.21 et seq., which
implements Title III of the Trade Agreements Act of 1979, as amended
(19 U.S.C. 2511 et seq.), CBP issues country of origin advisory
rulings and final determinations as to whether an article is or
would be a product of a designated country or instrumentality for
the purposes of granting waivers of certain ``Buy American''
restrictions in U.S. law or practice for products offered for sale
to the U.S. Government.
Under the rule of origin set forth under 19 U.S.C. 2518(4)(B):
An article is a product of a country or instrumentality only if
(i) it is wholly the growth, product, or manufacture of that country
or instrumentality, or (ii) in the case of an article which consists
in whole or in part of materials from another country or
instrumentality, it has been substantially transformed into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.
See also, 19 CFR 177.22(a).
In determining whether the combining of parts or materials
constitutes a substantial transformation, the determinative issue is
the extent of operations performed and whether the parts lose their
identity and become an integral part of the new article. Belcrest
Linens v. United States, 573 F. Supp. 1149 (Ct. Int'l Trade 1983),
aff'd, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are
minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. See, C.S.D.
80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51,
and C.S.D. 90-97. In C.S.D. 85-25, 19 Cust. Bull. 844 (1985), CBP
held that for purposes of the Generalized System of Preferences
(``GSP''), the assembly of a large number of fabricated components
onto a printed circuit board in a process involving a considerable
amount of time and skill resulted in a substantial transformation.
In that case, in excess of 50 discrete fabricated components (such
as resistors, capacitors, diodes, integrated circuits, sockets, and
connectors) were assembled. Whether an operation is complex and
meaningful depends on the nature of the operation, including the
number of components assembled, number of different operations,
time, skill level required, attention to detail, quality control,
the value added to the article, and the overall employment generated
by the manufacturing process.
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, or use are primary
considerations in such cases. Additionally, factors such as the
resources expended on product design and development, extent and
nature of post-
[[Page 44568]]
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.
Nukote collects empty toner cartridges from end users at
collection sites in the United States and, to a substantially lesser
extent, in Canada, Singapore, the United Kingdom, Hong Kong and
China. Nukote also purchases used printer cartridges from United
States-based brokers. These used printer cartridges were originally
manufactured at various locations in different countries. The
cartridges are sorted at one foreign location and are then processed
at a second foreign location and subsequently in the United States.
At the second foreign location, the cartridges are split open,
disassembled, and separated into three sub-assemblies. Worn
components of the sub-assemblies are replaced and made operational
again. This work constitutes disassembly of the used cartridges, as
well as certain preparation for the processing which will occur in
the United States. At this point the goods are tested. It is claimed
that the sub-assemblies are not functional without the chip which is
later installed in the United States (at least in the two scenarios
where the chip is involved).
The processing which occurs at Nukote's Rochester, New York
facility includes inspection, filling and sealing, mechanical
assembly, testing, cleaning, installation of a computer chip,
preparation and packaging for shipment, and shipment. We do not
believe these operations are complex enough to result in a
substantial transformation of the sub-assemblies. The sub-assemblies
are essentially made functional again at the foreign facility. While
the chip which makes the cartridge work (in two of the three
scenarios) is inserted in the United States, we find that the
bringing together of the sub-assemblies in the United States does
not result in a substantial transformation of the goods. For
example, these operations in the United States are not as
significant as those in NY G87305, where the cartridges were
completely disassembled; salvageable parts were sorted into bins,
cleaned, and reconditioned; major components, including the OPC drum
and toner were replaced; and other new components were added.
In HQ 561232, dated April 20, 2004, CBP considered the steps
necessary to create a fully functional FM tuner, including
adjustments to the oscillator coil, two filter coils, and the
demodulator coil, selecting and installing two resistors, and
enclosing the item in a metal case. CBP held that ``while these
additional operations are required to create a fully functional
product, and are of a certain complexity requiring technical skill,
they do not change the essential character of the PCBA [printed
circuit board assembly], which at this stage of production has the
characteristics of the imported FM tuner but has not quite achieved
full functionality.'' Therefore, CBP held that there was not a
second substantial transformation in the Philippines. We believe
that HQ 561232 is relevant here as the imported sub-assemblies
possess the characteristics of the printer cartridge but, as
imported, have not achieved full functionality.
Holding
The operations performed at Nukote's Rochester, New York
facility do not result in a substantial transformation of the
cartridges. Therefore, the cartridges will not be considered to be
products of the United States.
Sincerely,
Sandra L. Bell,
Executive Director, Office of Regulations and Rulings, Office of
International Trade.
[FR Doc. E7-15484 Filed 8-7-07; 8:45 am]
BILLING CODE 9111-14-P