Notice of Issuance of Final Determination Concerning APC InfraStruXure® Solutions and of Certain Units, 56124-56127 [2010-22928]

Download as PDF 56124 Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices 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. DEPARTMENT OF HOMELAND SECURITY U.S. Customs and Border Protection Notice of Issuance of Final Determination Concerning APC InfraStruXure® Solutions and of Certain Units U.S. Customs and Border Protection, Department of Homeland Security. ACTION: Notice of final determination. AGENCY: This document provides notice that U.S. Customs and Border Protection (‘‘CBP’’) has issued a final determination concerning the country of origin of InfraStruXure Solutions and of certain units. Based upon the facts presented, CBP has concluded in the final determination that the United States is the country of origin of InfraStruXure Solutions and of certain units for purposes of U.S. Government procurement. DATES: The final determination was issued on September 9, 2010. 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 on or before October 15, 2010. FOR FURTHER INFORMATION CONTACT: Heather K. Pinnock, Valuation and Special Programs Branch: (202) 325– 0034. SUMMARY: Notice is hereby given that on September 9, 2010, 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 InfraStruXure Solutions and of certain units which may be offered to the U.S. Government under an undesignated government procurement contract. This final determination, in HQ H107335, was issued at the request of APC by Schneider Electric (‘‘APC’’), 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, InfraStruXure Solutions and certain units, assembled to completion in the United States from parts made in non-TAA countries, TAA countries and in the United States, and programmed and installed in the United States are substantially transformed in the United States, such that the United States is the country of origin of the finished articles for purposes of U.S. Government procurement. srobinson on DSKHWCL6B1PROD with NOTICES SUPPLEMENTARY INFORMATION: VerDate Mar<15>2010 18:57 Sep 14, 2010 Jkt 220001 Dated: September 9, 2010. Sandra L. Bell, Executive Director, Regulations and Rulings, Office of International Trade. Attachment HQ H107335 September 9, 2010 OT:RR:CTF:VS H107335 HkP CATEGORY: Marking Stuart P. Seidel, Esq. Baker & McKenzie LLP 815 Connecticut Avenue, NW. Washington, DC 20006–4078. RE: Request for Final Determination on the Country of Origin of APC InfraStruXure® Solutions and of certain Units Dear Mr. Seidel: This is in response to your letter dated May 19, 2010, requesting a final determination on behalf of APC by Schneider Electric (‘‘APC’’), pursuant to subpart B of part 177 of the U.S. Customs and Border Protection (‘‘CBP’’) Regulations (19 C.F.R. Part 177). Under these regulations, which implement Title III of the Trade Agreements Act of 1979 (‘‘TAA’’), 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. This final determination concerns the country of origin of APC’s ‘‘InfraStruXure®’’ Solutions (‘‘ISX’’) that are assembled at customer’s premises to provide uninterruptible power supplies (UPS). This final determination also concerns certain individual units of the ISX: (1) the Symmetra PX UPS, and (2) the Symmetra MW UPS. At your request, the final determination on the Rack Enclosures/Assemblies for the ISX, when imported separately, will be addressed in other correspondence. We note that as a U.S. manufacturer, producer and/or importer of the named products, APC is a party-atinterest within the meaning of 19 C.F.R. § 177.22(d)(1) and is entitled to request this final determination. Photographs were submitted with your request. FACTS: According to the information submitted, an ISX provides a systematic approach to building data center infrastructure utilizing standardized and reassembled components. They can be contained in a wiring closet, computer room, or a small, medium or large PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 data center. In this case, the ISX incorporates UPS units (either Symmetra PX UPS or Symmetra MW UPS), power distribution units (PDUs), cooling or chilling units such as computer room air conditioners and InRow Cooling Units, Rack PDUs, Rack Assemblies and Enclosures, and a thermal containment system. The units will be integrated and monitored by the NetBotz and InfraStruXure Central Security environmental appliances and centralized management systems. These items are independently shipped and are assembled at the end user’s (customer’s) premises in the United States. Every ISX in the U.S. is designed by certified APC sales/systems engineers based in the U.S. The design process involves site visits, surveys and audits of the customer’s facility and can take from several hours to several days. Once the customer’s requirements are known and the components imported, the systems are assembled, configured, networked, programmed and integrated by APC field service engineers at the customer’s facility. This process can take from several hours for small systems to several weeks for large systems and must be performed by trained technicians and licensed electricians. InfraStruXure Solution (ISX) For purposes of this request, ‘‘typical’’ small, medium and large ISX have been described as having the following units (described infra). Small system: 1 40 kW N+1 Symmetra PX UPS 1 40 kW InfraStruXure PDU with prefabricated circuits 10 NetShelter SX enclosures 20 Rack power distribution units 4 InRow RD air-cooled cooling units and condensers 4 NetBotz security and environmental appliances 1 InfraStruXure central basic monitoring/ management system Start-up, assembly and configuration services Programming, assembly and installation of a small system typically take three days to complete. Medium system: 1 250 kW Symmetra PX UPS 1 288 kW InfraStruXure PDU with prefabricated circuits 50 NetShelter SX enclosures 50 Rack power distribution units 16 InRow RC water-cooled cooling units and chillers 17 NetBotz security and environmental appliances 1 InfraStruXure central basic monitoring/ management system Start-up, assembly and configuration services Programming, assembly and installation of a medium system typically take five to seven days to complete. Large system: 1 1000 kW (1 MW) Symmetra MW UPS 16 288 kW InfraStruXure PDU with prefabricated circuits 200 NetShelter SX enclosures E:\FR\FM\15SEN1.SGM 15SEN1 Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices srobinson on DSKHWCL6B1PROD with NOTICES 200 Rack power distribution units 64 InRow RC chilled water-cooled cooling units and chillers 68 NetBotz security and environmental appliances 1 InfraStruXure central basic monitoring/ management system Start-up, assembly and configuration services Programming, assembly and installation of a large system typically take 12–15 days to complete. Units As noted above, the ISX is comprised of various units. One unit, a UPS, is described as power protection for servers and voice and data networks. Specifically, the Symmetra PX UPS is a modular system made up of dedicated and redundant modules: Power, intelligence, battery, and bypass. Its architecture can scale power and runtime as demand grows or as higher levels of availability are required. The Symmetra PX is referred to as a ‘‘family’’ as it is available in different sizes. It serves as the core powertrain that drives the APC InfraStruXure systems for small and medium data centers but can also power individual zones of larger data centers. It has self-diagnostic capabilities and standardized modules which mitigate the risk of human error. The UPS modules for the Symmetra PX are assembled in the Philippines. The total assembly time depends on the specific modules or components to be included. Power modules are the main component and take approximately one hour to be assembled. Subcomponents require under an hour to be assembled and the UPS frame takes approximately two hours to be assembled. The assembly operation involves soldering, welding, and the installation of firmware (programming instructions stored in the read only memory (ROM) rather than being implemented through software) at the board and module levels. The firmware provides the functionality for diagnostic testing. Fully functioning firmware is installed in the United States after complete assembly and integration of the full system at the end user’s premises. Also installed in the Philippines is a version of the operating system (OS) 1 developed in the U.S., Denmark and Ireland. However, the OS is configured to the customer’s requirements at the customer’s premises in the U.S. when the system is assembled to completion. This configuration is a separate step from the system configuration that is required at the time of start up. The components of the Symmetra PX UPS unit are imported from the Philippines in basic modules and take about one to three days to be assembled. The technicians inspect the components, assemble the modules, level the UPS enclosure/frame, and connect the UPS units to the frame and to other components in the system through 1 ‘‘The computer’s master control program * * * It sets the standard for all application programs that run in the computer. Applications ‘talk to’ the operating system for all user interface and file management operations.’’ Computer Desktop Encyclopedia (2010), available at www.answers.com/topic/operating-systemtechnology. VerDate Mar<15>2010 18:57 Sep 14, 2010 Jkt 220001 cables and other wiring (ground and control). In order to physically attach the UPS enclosure to other enclosures, the side panels of the UPS enclosure, which has no wiring knock-outs, must be swapped with the opposite side panels from the PDU and XR Battery enclosures. In addition, the battery enclosure communication cables must be connected and the XR frame addresses selected, and the control wiring between the PDU and UPS and between various boards and enclosures must be installed. Symmetra MW UPS—a high-power faulttolerant UPS in the 400–1600 kW range. It is designed for large data centers, complete buildings, healthcare and other critical facility protection requirements. As with the Symmetra PX, the MW UPS is available in different sizes. It can be scaled for rigorous and changing electrical demands and provides increased availability through internal N+1 configurability, predictive failure notification and multi-module paralleling features. It features slide-in/out power modules, manageable external batteries and self-diagnosis, can be combined with a wide range of line-up and match options, and is a customizable system in a standardized design for any large on-demand network-critical physical infrastructure. The main components of the Symmetra MW are assembled in India by soldering, welding and screwing. Each module takes two to three days to be completed. In the U.S., certified technicians assemble the full system to completion at the customer’s premises from the basic modules assembled in India. The installation of the complete system takes seven to 10 days for a two-man crew. As described above in relation to the assembly of the PX UPS, technicians inspect the components, assemble the modules, level the UPS enclosure/frame, and connect the UPS units to the frame and to other components in the system through cables and other wiring. Firmware, partly developed in the United States, is stored and updated on an internal memory chip in the UPS unit and is custom configured in the U.S. during installation based on the options required for that particular installation. Power Distribution Unit (PDU)—the PDU has a logic controller which serves as the PDU’s brain. It includes a network management card, the input/output contacts and the memory chips for the PDU firmware. The logic card is located in the Row PDU and not in the UPS. Row PDU—a modular power distribution unit mitigates the need to predict the future requirements and configurations of an end user’s data center. It enables rapid expansion or reconfiguration through expansion modules (including circuit breaker, power cord, and power connection) which can be plugged into a touch-safe backplane in minutes, eliminating the need for risky hot work and shielding users from dangerous amperage. It also features output metering, branch current/circuit monitoring and autodetection by the InfraStruXure suite of management options. The Modular Remote Power Panel 2 and Row PDU are 2 This component was not described in the submission. PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 56125 manufactured in the Philippines, while the distribution modules are manufactured in the United States. Rack PDU—provides power distribution via a single input with multiple output receptacles and distributes power from low amperage single phase circuits to higher power 3-phase solutions. Rack PDUs are available in basic, metered and switched versions. Most component parts are manufactured in India and China and a small number in the United States and European Union countries. Complete testing of each part is performed in the country of manufacture. Firmware for diagnostic testing is developed in the U.S. but used in the country of manufacture. After testing, it is removed and replaced with firmware for operations, which is developed in the U.S. and India. Final configuration for the metered and switched versions of the Rack PDU is performed at the customer’s premises in the U.S. NetShelter SX Rack Enclosure—rack enclosures/assemblies have a strong focus on cooling, power distribution, cable management, and environmental monitoring. Their main components are: A vertical cable organizer, split doors, side panels with locks (and keys), frame posts, adjustable leveling feet, casters, a reversible curved door, vertical mounting flanges, a 1070-mm roof, and a 1200-mm roof. The hardware necessary to assemble the pieces together is: Plastic cup washers, M6x16 Phillips slot screws, M5x12 screws, cage nuts, and 7-mm hole plugs. The main components are mostly sourced in China and account for 25.3% of the enclosures and 90% of their cost. Some of the minor components, such as bolts, washers, hole plugs and cable ties, come from suppliers in the U.S., as do labels, packaging sheets, product literature, warranty cards, and installation manuals. Shipping and packaging materials for the enclosures, such as corner posts, a pallet, and fork-lift guards are also sourced in the U.S. Together, these U.S.-sourced materials account for 68.7% of the total material used in the assembly of rack enclosures and 8.4% of their cost. The remaining components are from Germany and Korea. The rack assemblies are imported unassembled and are assembled in the U.S. by teams of six people. Final set-up is at the customer’s premises and involves unpacking, setting in place and setting-up for the mounting of equipment—lowering of leveling feet, screwing and otherwise assembling together vertical and horizontal pieces, resetting the mounting rail depth, attaching grounding to the enclosure, securing the enclosures to the floor and, when attaching two or more enclosures together, baying them in a row. Based on the diagrams submitted, a fully assembled enclosure resembles a large rectangular three-dimensional frame, with panels on two opposing sides and on the top but not on any of the remaining three sides (including the side secured to the floor). Setup takes between 15 minutes and two hours per enclosure, depending on customer requirements. InRow Cooling Units—prevent hot air recirculation from IT loads while improving cooling predictability and allowing for a ‘‘pay E:\FR\FM\15SEN1.SGM 15SEN1 56126 Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices srobinson on DSKHWCL6B1PROD with NOTICES as you grow’’ environment. The units are available with and without humidity control and are designed to meet the diverse requirements for medium to large data centers. They are assembled in China and firmware, designed in the U.S. but installed in China, is used in the units. The firmware is upgraded when the unit is installed in a completed system at the customer’s premises in the U.S. Installation of the unit requires on-site piping and connection to building systems. InRoom Cooling Units—offer cooling solutions for lower density racked and nonracked IT loads as well as a flexible, assemble-to-order solution that provides variable fan technology and intelligent control for greater efficiency. They are manufactured in the United States using processes involving sheet metal work, soldering, brazing, and welding. The units use firmware developed and installed in the United States. Chillers—air-cooled chillers are used for large data center environments. They are manufactured in the U.S. in a process that involves brazing and/or welding. The chillers use firmware that completely controls the chiller and that interfaces with building management and other systems. Thermal Containment System—available in rack or aisle level configurations and is designed to completely separate the supply and return air paths of IT equipment. Thermal containment is available for 300 mm, 600 mm and 750 mm wide NetShelter Racks, UPS and PDU units, and InRow Cooling products. The units are manufactured in Canada and require additional assembly at the customer’s premises. NetBotz and InfraStruXure Central—a management system that provides a centralized dashboard to the client’s InfraStruXure system and offers features such as a centralized repository, trending, alerting, alarming and escalation. The units are manufactured in the Philippines and India and have printed circuit board (PCB) and sheet metal components. Firmware, which is installed in India or in the Philippines, is designed in the U.S. and can be further tailored to meet customer requirements on installation by APC trained engineers. Additional assembly is required at the customer’s premises. Assembly and Installation The assembly and installation process for an ISX in the U.S. is as follows: 1. Position the ISX power system, UPS and external battery cabinets in accordance with the site plan; 2. Assemble racks and enclosures; 3. Install all applicable system modules and rack mounted devices; 4. Ensure that the enclosures are aligned, leveled, and the brackets tightened; verify rack mounted ISX distribution systems are installed to manufacturer specifications; 5. Install NetShelter accessories (cabling, troughs, ladders, baying units); 6. Route all power cabling through the troughs; 7. Install data distribution system including cable heads and data distribution panel; VerDate Mar<15>2010 18:57 Sep 14, 2010 Jkt 220001 8. Move cooling system into place and assemble ductwork; 9. Install PEX flexible fluid piping, terminate connections, check for leaks; 10. Mount any remote sensors; 11. Install cooling system modules and rack mounted devices; and 12. Unpack management components and mount devices in the rack, install data cabling to all devices to be managed. All firmware is proprietary to APC and is developed by APC in the United States, Denmark, and Ireland. Each release costs significant amounts of money and requires several thousand man-hours to develop. It takes trained and certified technicians several hours to install and configure the firmware at customers’ premises. 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 C.F.R. § 177.22(a). In rendering advisory rulings and final determinations for purposes of U.S. Government procurement, CBP applies the provisions of subpart B of Part 177 consistent with the Federal Procurement Regulations. See 19 C.F.R. § 177.21. In this regard, CBP recognizes that the Federal Procurement Regulations restrict the U.S. Government’s purchase of products to U.S.-made or designated country end products for acquisitions subject to the TAA. See 48 C.F.R. § 25.403(c)(1). You contend that the final assembly, integration, configuration or programming results in a substantial transformation in the U.S., in which the individual modules, components, parts and accessories are substantially transformed into a new end product (‘‘ISX’’). In Data General v. United States, 4 Ct. Int’l Trade 182 (1982), the court determined that for purposes of determining eligibility under item 807.00, Tariff Schedules of the United States (predecessor to subheading 9802.00.80, Harmonized Tariff Schedule of the United States), the programming of a foreign PROM (Programmable Read-Only Memory chip) in the United States substantially transformed the PROM into a U.S. article. In programming the imported PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 PROMs, the U.S. engineers systematically caused various distinct electronic interconnections to be formed within each integrated circuit. The programming bestowed upon each circuit its electronic function. That is, its ‘‘memory’’ which could be retrieved. A distinct physical change was effected in the PROM by the opening or closing of the fuses, depending on the method of programming. This physical alteration, not visible to the naked eye, could be discerned by electronic testing of the PROM. The court noted that the programs were designed by a project engineer with many years of experience in ‘‘designing and building hardware.’’ While replicating the program pattern from a ‘‘master’’ PROM may be a quick one-step process, the development of the pattern and the production of the ‘‘master’’ PROM required much time and expertise. The court noted that it was undisputed that programming alters the character of a PROM. The essence of the article, its interconnections or stored memory, was established by programming. The court concluded that altering the nonfunctioning circuitry comprising a PROM through technological expertise in order to produce a functioning read only memory device possessing a desired distinctive circuit pattern was no less a ‘‘substantial transformation’’ than the manual interconnection of transistors, resistors and diodes upon a circuit board creating a similar pattern. 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). See also Carlson Furniture Industries v. United States, 65 Cust. Ct. 474, 482 (1970) (‘‘And the end result of the activities performed on the imported articles … is the transformation of parts into a functional whole—giving rise to a new and different article within the principle of the Gibson-Thomsen case.’’) Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. 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. In HQ 559255, dated August 21, 1995, a device referred to as a ‘‘CardDock’’ was under E:\FR\FM\15SEN1.SGM 15SEN1 srobinson on DSKHWCL6B1PROD with NOTICES Federal Register / Vol. 75, No. 178 / Wednesday, September 15, 2010 / Notices consideration for country of origin marking purposes. The CardDock was a device which was installed in IBM PC compatible computers. After installation, the units were able to accept PCMCIA cards for the purpose of interfacing such PCMCIA cards with the computer in which the CardDock unit was installed. The CardDock units were partially assembled abroad but completed in the United States. The overseas processing included manufacturing the product’s injection molded plastic frame and installing integrated circuits onto a circuit board along with various diodes, resistors and capacitors. After such operations, these items were shipped to the United States for further processing that included mating a U.S.-origin circuit board to the foreign-origin frame and board. The assembled units were thereafter subjected to various testing procedures. In consideration of the foregoing, CBP held that the foreign-origin components, i.e., the ISA boards, frame assemblies and connector cables, were substantially transformed when assembled to completion in the United States. In finding that the name, character, and use of the foreign-origin components had changed during processing in the United States, CBP noted that the components had lost their separate identity during assembly and had become an integral part of a new and distinct item which was visibly different from any of the individual foreign-origin components. In HQ 735027, dated September 7, 1993, a device that software companies used to protect their software from piracy was under consideration for country of origin marking purposes. The device, referred to as the ‘‘MemoPlug’’, was assembled in Israel from parts that were obtained from Taiwan (such as various connectors and an Electronically Erasable Programmable Read Only Memory, or ‘‘EEPROM’’) and Israel (such as an internal circuit board). After assembly, these components were shipped to a processing facility in the United States where the EEPROM was programmed with special software. Such processing in the United States accounted for approximately 50 percent of the final selling price of the MemoPlugs. In finding that the foreign-origin components were substantially transformed in the United States, CBP noted that the U.S. processing transformed a blank media, the EEPROM, into a device that performed functions necessary to the prevention of software piracy. In Headquarters Ruling Letter (HQ) 563012, dated May 4, 2004, CBP considered whether components of various origins would be substantially transformed when assembled to form a fabric switch. Most of the assembly of computer hardware was to be performed in China. Then, in either Hong Kong or the U.S., the hardware would be completed and the U.S.-origin software, which would provide the finished product with its ‘‘distinctive functional characteristics,’’ would be downloaded onto the hardware. In the scenario where the fabric switch would be assembled to completion in Hong Kong and the software downloaded to the switch in that country, CBP determined that the country of origin for marking purposes would be Hong Kong. Likewise, were assembly and VerDate Mar<15>2010 18:57 Sep 14, 2010 Jkt 220001 configuration to take place in the United States, CBP concluded that the country of origin would be the U.S. InfraStruXure Solutions We note that while several subassemblies and components are manufactured in other countries, after importation these individual units are assembled into systems at the customer’s premises in the United States by trained technicians. As discussed below, several of the units comprising the ISX undergo assembly and programming in the U.S. Further, some of the units, the InRoom Cooling Units and Chillers, are entirely manufactured in the U.S. As a part of the assembly and installation process, the diagnostic firmware present in many of the units (UPS, Rack PDU, InRow Cooling units, NetBotz and InfraStruXure Central) is either replaced or upgraded, that is, the systems are programmed to perform their operational function by trained technicians. Most of the design and a high percentage of the original firmware and OS programming are developed in the U.S. See FACTS supra. Depending on the size of the system, programming, assembly and installation generally take from three to 15 days to complete. As a result of the assembling, programming and installation of the units by highly trained APC technicians that takes place after importation, we agree with your contention that the units are substantially transformed in the U.S. from non-functional or partly functional devices into an intelligent and fully functional network or data center UPS system. Consequently, the country of origin of the typical small, medium and large InfraStruXure Solutions will be the United States. In addition, you seek a final determination on certain units that may be sold separately (most likely as add-ons after the ISX has been in use for a while, but sometimes as replacement units). Symmetra PX UPS and Symmetra MW UPS After importation, the components of the UPS units (power, intelligence, battery, and bypass/static switch modules) must be assembled together in the UPS frame by trained technicians. Both models of UPS units are imported with firmware installed for diagnostic testing. In addition the Symmetra PX UPS is imported with a version of the operating system which APC technicians configure to the customer’s requirements. APC technicians also install fully functional firmware onto both models of UPS units after complete assembly and integration into the full ISX system at the customer’s premises. Assembly, installation and programming take between one and 10 days depending on the model of UPS unit. Given the complexity of the devices and of the mechanical and electrical connections which must be made in the U.S. by highly trained technicians, and the fact that the units will be programmed in the United States using firmware developed in part in the U.S., we find that both models of UPS units would be substantially transformed in the United States and that the U.S. would be their country of origin. See Data General and Belcrest Linens, supra. PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 56127 HOLDING: Based on the facts provided, the assembly and programming operations performed in the United States on the units of the ISX give rise to a new and different article (an ISX) and impart the essential character of the ISX. Likewise, the assembly and programming operations performed in the United States on the components of the UPS units of the ISX give rise to a new and different article (a UPS unit). As such, the ISX and the UPS units described in this ruling are to be considered products of the United States for purposes of government procurement. Notice of this final determination will be given in the Federal Register, as required by 19 C.F.R. § 177.29. Any party-at-interest other than the party which requested this final determination may request, pursuant to 19 C.F.R. § 177.31, that CBP reexamine the matter anew and issue a new final determination. Pursuant to 19 C.F.R. § 177.30, any party-at-interest may, within 30 days of publication of the Federal Register Notice referenced above, seek judicial review of this final determination before the Court of International Trade. Sincerely, Sandra L. Bell, Executive Director, Regulations and Rulings, Office of International Trade. [FR Doc. 2010–22928 Filed 9–14–10; 8:45 am] BILLING CODE 9111–14–P DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency [Docket ID FEMA–2010–0032] Federal Radiological Preparedness Coordinating Committee Federal Emergency Management Agency, DHS. ACTION: Notice of public meeting. AGENCY: The Federal Radiological Preparedness Coordinating Committee is holding a public meeting on September 28, 2010 in Arlington, VA. DATES: The meeting will take place on September 28, 2010. The session is open to the public and will take place from 9 a.m. to 11 a.m. Send written statements and requests to make oral statements to the person listed in the SUMMARY: FOR FURTHER INFORMATION CONTACT section by close of business September 25, 2010. ADDRESSES: The meeting will be held at the Marriott Crystal Gateway located at 1700 Jefferson Davis Highway, Arlington, VA 22202, in the Alexandria Room. FOR FURTHER INFORMATION CONTACT: Timothy Greten, FRPCC Executive Secretary, DHS/FEMA, 1800 South Bell Street—CC847, Mail Stop 3025, E:\FR\FM\15SEN1.SGM 15SEN1

Agencies

[Federal Register Volume 75, Number 178 (Wednesday, September 15, 2010)]
[Notices]
[Pages 56124-56127]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-22928]



[[Page 56124]]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning APC 
InfraStruXure[supreg] Solutions and of Certain Units

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (``CBP'') has issued a final determination concerning the 
country of origin of InfraStruXure Solutions and of certain units. 
Based upon the facts presented, CBP has concluded in the final 
determination that the United States is the country of origin of 
InfraStruXure Solutions and of certain units for purposes of U.S. 
Government procurement.

DATES: The final determination was issued on September 9, 2010. 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 on or before October 15, 2010.

FOR FURTHER INFORMATION CONTACT: Heather K. Pinnock, Valuation and 
Special Programs Branch: (202) 325-0034.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on September 9, 
2010, 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 InfraStruXure Solutions and of certain units which 
may be offered to the U.S. Government under an undesignated government 
procurement contract. This final determination, in HQ H107335, was 
issued at the request of APC by Schneider Electric (``APC''), 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, InfraStruXure Solutions and certain units, 
assembled to completion in the United States from parts made in non-TAA 
countries, TAA countries and in the United States, and programmed and 
installed in the United States are substantially transformed in the 
United States, such that the United States is the country of origin of 
the finished articles for purposes of U.S. Government procurement.
    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: September 9, 2010.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.

Attachment

HQ H107335

September 9, 2010

OT:RR:CTF:VS H107335 HkP
CATEGORY: Marking

Stuart P. Seidel, Esq.
Baker & McKenzie LLP
815 Connecticut Avenue, NW.
Washington, DC 20006-4078.

RE: Request for Final Determination on the Country of Origin of APC 
InfraStruXure[supreg] Solutions and of certain Units

    Dear Mr. Seidel: This is in response to your letter dated May 
19, 2010, requesting a final determination on behalf of APC by 
Schneider Electric (``APC''), pursuant to subpart B of part 177 of 
the U.S. Customs and Border Protection (``CBP'') Regulations (19 
C.F.R. Part 177). Under these regulations, which implement Title III 
of the Trade Agreements Act of 1979 (``TAA''), 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.
    This final determination concerns the country of origin of APC's 
``InfraStruXure[supreg]'' Solutions (``ISX'') that are assembled at 
customer's premises to provide uninterruptible power supplies (UPS). 
This final determination also concerns certain individual units of 
the ISX: (1) the Symmetra PX UPS, and (2) the Symmetra MW UPS. At 
your request, the final determination on the Rack Enclosures/
Assemblies for the ISX, when imported separately, will be addressed 
in other correspondence. We note that as a U.S. manufacturer, 
producer and/or importer of the named products, APC is a party-at-
interest within the meaning of 19 C.F.R. Sec.  177.22(d)(1) and is 
entitled to request this final determination. Photographs were 
submitted with your request.

FACTS:

    According to the information submitted, an ISX provides a 
systematic approach to building data center infrastructure utilizing 
standardized and reassembled components. They can be contained in a 
wiring closet, computer room, or a small, medium or large data 
center. In this case, the ISX incorporates UPS units (either 
Symmetra PX UPS or Symmetra MW UPS), power distribution units 
(PDUs), cooling or chilling units such as computer room air 
conditioners and InRow Cooling Units, Rack PDUs, Rack Assemblies and 
Enclosures, and a thermal containment system. The units will be 
integrated and monitored by the NetBotz and InfraStruXure Central 
Security environmental appliances and centralized management 
systems. These items are independently shipped and are assembled at 
the end user's (customer's) premises in the United States.
    Every ISX in the U.S. is designed by certified APC sales/systems 
engineers based in the U.S. The design process involves site visits, 
surveys and audits of the customer's facility and can take from 
several hours to several days. Once the customer's requirements are 
known and the components imported, the systems are assembled, 
configured, networked, programmed and integrated by APC field 
service engineers at the customer's facility. This process can take 
from several hours for small systems to several weeks for large 
systems and must be performed by trained technicians and licensed 
electricians.

InfraStruXure Solution (ISX)

    For purposes of this request, ``typical'' small, medium and 
large ISX have been described as having the following units 
(described infra).

Small system:

1 40 kW N+1 Symmetra PX UPS
1 40 kW InfraStruXure PDU with pre-fabricated circuits
10 NetShelter SX enclosures
20 Rack power distribution units
4 InRow RD air-cooled cooling units and condensers
4 NetBotz security and environmental appliances
1 InfraStruXure central basic monitoring/management system
Start-up, assembly and configuration services

    Programming, assembly and installation of a small system 
typically take three days to complete.

Medium system:

1 250 kW Symmetra PX UPS
1 288 kW InfraStruXure PDU with pre-fabricated circuits
50 NetShelter SX enclosures
50 Rack power distribution units
16 InRow RC water-cooled cooling units and chillers
17 NetBotz security and environmental appliances
1 InfraStruXure central basic monitoring/management system
Start-up, assembly and configuration services

    Programming, assembly and installation of a medium system 
typically take five to seven days to complete.

Large system:

1 1000 kW (1 MW) Symmetra MW UPS
16 288 kW InfraStruXure PDU with pre-fabricated circuits
200 NetShelter SX enclosures

[[Page 56125]]

200 Rack power distribution units
64 InRow RC chilled water-cooled cooling units and chillers
68 NetBotz security and environmental appliances
1 InfraStruXure central basic monitoring/management system
Start-up, assembly and configuration services

    Programming, assembly and installation of a large system 
typically take 12-15 days to complete.

Units

    As noted above, the ISX is comprised of various units. One unit, 
a UPS, is described as power protection for servers and voice and 
data networks. Specifically, the Symmetra PX UPS is a modular system 
made up of dedicated and redundant modules: Power, intelligence, 
battery, and bypass. Its architecture can scale power and runtime as 
demand grows or as higher levels of availability are required. The 
Symmetra PX is referred to as a ``family'' as it is available in 
different sizes. It serves as the core powertrain that drives the 
APC InfraStruXure systems for small and medium data centers but can 
also power individual zones of larger data centers. It has self-
diagnostic capabilities and standardized modules which mitigate the 
risk of human error.
    The UPS modules for the Symmetra PX are assembled in the 
Philippines. The total assembly time depends on the specific modules 
or components to be included. Power modules are the main component 
and take approximately one hour to be assembled. Subcomponents 
require under an hour to be assembled and the UPS frame takes 
approximately two hours to be assembled. The assembly operation 
involves soldering, welding, and the installation of firmware 
(programming instructions stored in the read only memory (ROM) 
rather than being implemented through software) at the board and 
module levels. The firmware provides the functionality for 
diagnostic testing. Fully functioning firmware is installed in the 
United States after complete assembly and integration of the full 
system at the end user's premises. Also installed in the Philippines 
is a version of the operating system (OS) \1\ developed in the U.S., 
Denmark and Ireland. However, the OS is configured to the customer's 
requirements at the customer's premises in the U.S. when the system 
is assembled to completion. This configuration is a separate step 
from the system configuration that is required at the time of start 
up.
---------------------------------------------------------------------------

    \1\ ``The computer's master control program * * * It sets the 
standard for all application programs that run in the computer. 
Applications `talk to' the operating system for all user interface 
and file management operations.'' Computer Desktop Encyclopedia 
(2010), available at www.answers.com/topic/operating-system-technology.
---------------------------------------------------------------------------

    The components of the Symmetra PX UPS unit are imported from the 
Philippines in basic modules and take about one to three days to be 
assembled. The technicians inspect the components, assemble the 
modules, level the UPS enclosure/frame, and connect the UPS units to 
the frame and to other components in the system through cables and 
other wiring (ground and control). In order to physically attach the 
UPS enclosure to other enclosures, the side panels of the UPS 
enclosure, which has no wiring knock-outs, must be swapped with the 
opposite side panels from the PDU and XR Battery enclosures. In 
addition, the battery enclosure communication cables must be 
connected and the XR frame addresses selected, and the control 
wiring between the PDU and UPS and between various boards and 
enclosures must be installed.
    Symmetra MW UPS--a high-power fault-tolerant UPS in the 400-1600 
kW range. It is designed for large data centers, complete buildings, 
healthcare and other critical facility protection requirements. As 
with the Symmetra PX, the MW UPS is available in different sizes. It 
can be scaled for rigorous and changing electrical demands and 
provides increased availability through internal N+1 
configurability, predictive failure notification and multi-module 
paralleling features. It features slide-in/out power modules, 
manageable external batteries and self-diagnosis, can be combined 
with a wide range of line-up and match options, and is a 
customizable system in a standardized design for any large on-demand 
network-critical physical infrastructure.
    The main components of the Symmetra MW are assembled in India by 
soldering, welding and screwing. Each module takes two to three days 
to be completed. In the U.S., certified technicians assemble the 
full system to completion at the customer's premises from the basic 
modules assembled in India. The installation of the complete system 
takes seven to 10 days for a two-man crew. As described above in 
relation to the assembly of the PX UPS, technicians inspect the 
components, assemble the modules, level the UPS enclosure/frame, and 
connect the UPS units to the frame and to other components in the 
system through cables and other wiring. Firmware, partly developed 
in the United States, is stored and updated on an internal memory 
chip in the UPS unit and is custom configured in the U.S. during 
installation based on the options required for that particular 
installation.
    Power Distribution Unit (PDU)--the PDU has a logic controller 
which serves as the PDU's brain. It includes a network management 
card, the input/output contacts and the memory chips for the PDU 
firmware. The logic card is located in the Row PDU and not in the 
UPS.
    Row PDU--a modular power distribution unit mitigates the need to 
predict the future requirements and configurations of an end user's 
data center. It enables rapid expansion or reconfiguration through 
expansion modules (including circuit breaker, power cord, and power 
connection) which can be plugged into a touch-safe backplane in 
minutes, eliminating the need for risky hot work and shielding users 
from dangerous amperage. It also features output metering, branch 
current/circuit monitoring and auto-detection by the InfraStruXure 
suite of management options. The Modular Remote Power Panel \2\ and 
Row PDU are manufactured in the Philippines, while the distribution 
modules are manufactured in the United States.
---------------------------------------------------------------------------

    \2\ This component was not described in the submission.
---------------------------------------------------------------------------

    Rack PDU--provides power distribution via a single input with 
multiple output receptacles and distributes power from low amperage 
single phase circuits to higher power 3-phase solutions. Rack PDUs 
are available in basic, metered and switched versions.
    Most component parts are manufactured in India and China and a 
small number in the United States and European Union countries. 
Complete testing of each part is performed in the country of 
manufacture. Firmware for diagnostic testing is developed in the 
U.S. but used in the country of manufacture. After testing, it is 
removed and replaced with firmware for operations, which is 
developed in the U.S. and India. Final configuration for the metered 
and switched versions of the Rack PDU is performed at the customer's 
premises in the U.S.
    NetShelter SX Rack Enclosure--rack enclosures/assemblies have a 
strong focus on cooling, power distribution, cable management, and 
environmental monitoring. Their main components are: A vertical 
cable organizer, split doors, side panels with locks (and keys), 
frame posts, adjustable leveling feet, casters, a reversible curved 
door, vertical mounting flanges, a 1070-mm roof, and a 1200-mm roof. 
The hardware necessary to assemble the pieces together is: Plastic 
cup washers, M6x16 Phillips slot screws, M5x12 screws, cage nuts, 
and 7-mm hole plugs.
    The main components are mostly sourced in China and account for 
25.3% of the enclosures and 90% of their cost. Some of the minor 
components, such as bolts, washers, hole plugs and cable ties, come 
from suppliers in the U.S., as do labels, packaging sheets, product 
literature, warranty cards, and installation manuals. Shipping and 
packaging materials for the enclosures, such as corner posts, a 
pallet, and fork-lift guards are also sourced in the U.S. Together, 
these U.S.-sourced materials account for 68.7% of the total material 
used in the assembly of rack enclosures and 8.4% of their cost. The 
remaining components are from Germany and Korea.
    The rack assemblies are imported unassembled and are assembled 
in the U.S. by teams of six people. Final set-up is at the 
customer's premises and involves unpacking, setting in place and 
setting-up for the mounting of equipment--lowering of leveling feet, 
screwing and otherwise assembling together vertical and horizontal 
pieces, resetting the mounting rail depth, attaching grounding to 
the enclosure, securing the enclosures to the floor and, when 
attaching two or more enclosures together, baying them in a row. 
Based on the diagrams submitted, a fully assembled enclosure 
resembles a large rectangular three-dimensional frame, with panels 
on two opposing sides and on the top but not on any of the remaining 
three sides (including the side secured to the floor). Set-up takes 
between 15 minutes and two hours per enclosure, depending on 
customer requirements.
    InRow Cooling Units--prevent hot air recirculation from IT loads 
while improving cooling predictability and allowing for a ``pay

[[Page 56126]]

as you grow'' environment. The units are available with and without 
humidity control and are designed to meet the diverse requirements 
for medium to large data centers. They are assembled in China and 
firmware, designed in the U.S. but installed in China, is used in 
the units. The firmware is upgraded when the unit is installed in a 
completed system at the customer's premises in the U.S. Installation 
of the unit requires on-site piping and connection to building 
systems.
    InRoom Cooling Units--offer cooling solutions for lower density 
racked and non-racked IT loads as well as a flexible, assemble-to-
order solution that provides variable fan technology and intelligent 
control for greater efficiency. They are manufactured in the United 
States using processes involving sheet metal work, soldering, 
brazing, and welding. The units use firmware developed and installed 
in the United States.
    Chillers--air-cooled chillers are used for large data center 
environments. They are manufactured in the U.S. in a process that 
involves brazing and/or welding. The chillers use firmware that 
completely controls the chiller and that interfaces with building 
management and other systems.
    Thermal Containment System--available in rack or aisle level 
configurations and is designed to completely separate the supply and 
return air paths of IT equipment. Thermal containment is available 
for 300 mm, 600 mm and 750 mm wide NetShelter Racks, UPS and PDU 
units, and InRow Cooling products. The units are manufactured in 
Canada and require additional assembly at the customer's premises.
    NetBotz and InfraStruXure Central--a management system that 
provides a centralized dashboard to the client's InfraStruXure 
system and offers features such as a centralized repository, 
trending, alerting, alarming and escalation. The units are 
manufactured in the Philippines and India and have printed circuit 
board (PCB) and sheet metal components. Firmware, which is installed 
in India or in the Philippines, is designed in the U.S. and can be 
further tailored to meet customer requirements on installation by 
APC trained engineers. Additional assembly is required at the 
customer's premises.

Assembly and Installation

    The assembly and installation process for an ISX in the U.S. is 
as follows:
    1. Position the ISX power system, UPS and external battery 
cabinets in accordance with the site plan;
    2. Assemble racks and enclosures;
    3. Install all applicable system modules and rack mounted 
devices;
    4. Ensure that the enclosures are aligned, leveled, and the 
brackets tightened; verify rack mounted ISX distribution systems are 
installed to manufacturer specifications;
    5. Install NetShelter accessories (cabling, troughs, ladders, 
baying units);
    6. Route all power cabling through the troughs;
    7. Install data distribution system including cable heads and 
data distribution panel;
    8. Move cooling system into place and assemble ductwork;
    9. Install PEX flexible fluid piping, terminate connections, 
check for leaks;
    10. Mount any remote sensors;
    11. Install cooling system modules and rack mounted devices; and
    12. Unpack management components and mount devices in the rack, 
install data cabling to all devices to be managed.
    All firmware is proprietary to APC and is developed by APC in 
the United States, Denmark, and Ireland. Each release costs 
significant amounts of money and requires several thousand man-hours 
to develop. It takes trained and certified technicians several hours 
to install and configure the firmware at customers' premises.

LAW AND ANALYSIS:

    Pursuant to Subpart B of Part 177, 19 CFR Sec.  177.21 et seq., 
which implements Title III of the Trade Agreements Act of 1979, as 
amended (19 U.S.C. Sec.  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. Sec.  
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 C.F.R. Sec.  177.22(a).
    In rendering advisory rulings and final determinations for 
purposes of U.S. Government procurement, CBP applies the provisions 
of subpart B of Part 177 consistent with the Federal Procurement 
Regulations. See 19 C.F.R. Sec.  177.21. In this regard, CBP 
recognizes that the Federal Procurement Regulations restrict the 
U.S. Government's purchase of products to U.S.-made or designated 
country end products for acquisitions subject to the TAA. See 48 
C.F.R. Sec.  25.403(c)(1).
    You contend that the final assembly, integration, configuration 
or programming results in a substantial transformation in the U.S., 
in which the individual modules, components, parts and accessories 
are substantially transformed into a new end product (``ISX'').
    In Data General v. United States, 4 Ct. Int'l Trade 182 (1982), 
the court determined that for purposes of determining eligibility 
under item 807.00, Tariff Schedules of the United States 
(predecessor to subheading 9802.00.80, Harmonized Tariff Schedule of 
the United States), the programming of a foreign PROM (Programmable 
Read-Only Memory chip) in the United States substantially 
transformed the PROM into a U.S. article. In programming the 
imported PROMs, the U.S. engineers systematically caused various 
distinct electronic interconnections to be formed within each 
integrated circuit. The programming bestowed upon each circuit its 
electronic function. That is, its ``memory'' which could be 
retrieved. A distinct physical change was effected in the PROM by 
the opening or closing of the fuses, depending on the method of 
programming. This physical alteration, not visible to the naked eye, 
could be discerned by electronic testing of the PROM. The court 
noted that the programs were designed by a project engineer with 
many years of experience in ``designing and building hardware.'' 
While replicating the program pattern from a ``master'' PROM may be 
a quick one-step process, the development of the pattern and the 
production of the ``master'' PROM required much time and expertise. 
The court noted that it was undisputed that programming alters the 
character of a PROM. The essence of the article, its 
interconnections or stored memory, was established by programming. 
The court concluded that altering the non-functioning circuitry 
comprising a PROM through technological expertise in order to 
produce a functioning read only memory device possessing a desired 
distinctive circuit pattern was no less a ``substantial 
transformation'' than the manual interconnection of transistors, 
resistors and diodes upon a circuit board creating a similar 
pattern.
    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). See also Carlson Furniture 
Industries v. United States, 65 Cust. Ct. 474, 482 (1970) (``And the 
end result of the activities performed on the imported articles 
[hellip] is the transformation of parts into a functional whole--
giving rise to a new and different article within the principle of 
the Gibson-Thomsen case.'') Assembly operations that are minimal or 
simple, as opposed to complex or meaningful, will generally not 
result in a substantial transformation.
    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.
    In HQ 559255, dated August 21, 1995, a device referred to as a 
``CardDock'' was under

[[Page 56127]]

consideration for country of origin marking purposes. The CardDock 
was a device which was installed in IBM PC compatible computers. 
After installation, the units were able to accept PCMCIA cards for 
the purpose of interfacing such PCMCIA cards with the computer in 
which the CardDock unit was installed. The CardDock units were 
partially assembled abroad but completed in the United States. The 
overseas processing included manufacturing the product's injection 
molded plastic frame and installing integrated circuits onto a 
circuit board along with various diodes, resistors and capacitors. 
After such operations, these items were shipped to the United States 
for further processing that included mating a U.S.-origin circuit 
board to the foreign-origin frame and board. The assembled units 
were thereafter subjected to various testing procedures. In 
consideration of the foregoing, CBP held that the foreign-origin 
components, i.e., the ISA boards, frame assemblies and connector 
cables, were substantially transformed when assembled to completion 
in the United States. In finding that the name, character, and use 
of the foreign-origin components had changed during processing in 
the United States, CBP noted that the components had lost their 
separate identity during assembly and had become an integral part of 
a new and distinct item which was visibly different from any of the 
individual foreign-origin components.
    In HQ 735027, dated September 7, 1993, a device that software 
companies used to protect their software from piracy was under 
consideration for country of origin marking purposes. The device, 
referred to as the ``MemoPlug'', was assembled in Israel from parts 
that were obtained from Taiwan (such as various connectors and an 
Electronically Erasable Programmable Read Only Memory, or 
``EEPROM'') and Israel (such as an internal circuit board). After 
assembly, these components were shipped to a processing facility in 
the United States where the EEPROM was programmed with special 
software. Such processing in the United States accounted for 
approximately 50 percent of the final selling price of the 
MemoPlugs. In finding that the foreign-origin components were 
substantially transformed in the United States, CBP noted that the 
U.S. processing transformed a blank media, the EEPROM, into a device 
that performed functions necessary to the prevention of software 
piracy.
    In Headquarters Ruling Letter (HQ) 563012, dated May 4, 2004, 
CBP considered whether components of various origins would be 
substantially transformed when assembled to form a fabric switch. 
Most of the assembly of computer hardware was to be performed in 
China. Then, in either Hong Kong or the U.S., the hardware would be 
completed and the U.S.-origin software, which would provide the 
finished product with its ``distinctive functional 
characteristics,'' would be downloaded onto the hardware. In the 
scenario where the fabric switch would be assembled to completion in 
Hong Kong and the software downloaded to the switch in that country, 
CBP determined that the country of origin for marking purposes would 
be Hong Kong. Likewise, were assembly and configuration to take 
place in the United States, CBP concluded that the country of origin 
would be the U.S.

InfraStruXure Solutions

    We note that while several subassemblies and components are 
manufactured in other countries, after importation these individual 
units are assembled into systems at the customer's premises in the 
United States by trained technicians. As discussed below, several of 
the units comprising the ISX undergo assembly and programming in the 
U.S. Further, some of the units, the InRoom Cooling Units and 
Chillers, are entirely manufactured in the U.S. As a part of the 
assembly and installation process, the diagnostic firmware present 
in many of the units (UPS, Rack PDU, InRow Cooling units, NetBotz 
and InfraStruXure Central) is either replaced or upgraded, that is, 
the systems are programmed to perform their operational function by 
trained technicians. Most of the design and a high percentage of the 
original firmware and OS programming are developed in the U.S. See 
FACTS supra. Depending on the size of the system, programming, 
assembly and installation generally take from three to 15 days to 
complete.
    As a result of the assembling, programming and installation of 
the units by highly trained APC technicians that takes place after 
importation, we agree with your contention that the units are 
substantially transformed in the U.S. from non-functional or partly 
functional devices into an intelligent and fully functional network 
or data center UPS system. Consequently, the country of origin of 
the typical small, medium and large InfraStruXure Solutions will be 
the United States.
    In addition, you seek a final determination on certain units 
that may be sold separately (most likely as add-ons after the ISX 
has been in use for a while, but sometimes as replacement units).

Symmetra PX UPS and Symmetra MW UPS

    After importation, the components of the UPS units (power, 
intelligence, battery, and bypass/static switch modules) must be 
assembled together in the UPS frame by trained technicians. Both 
models of UPS units are imported with firmware installed for 
diagnostic testing. In addition the Symmetra PX UPS is imported with 
a version of the operating system which APC technicians configure to 
the customer's requirements. APC technicians also install fully 
functional firmware onto both models of UPS units after complete 
assembly and integration into the full ISX system at the customer's 
premises. Assembly, installation and programming take between one 
and 10 days depending on the model of UPS unit.
    Given the complexity of the devices and of the mechanical and 
electrical connections which must be made in the U.S. by highly 
trained technicians, and the fact that the units will be programmed 
in the United States using firmware developed in part in the U.S., 
we find that both models of UPS units would be substantially 
transformed in the United States and that the U.S. would be their 
country of origin. See Data General and Belcrest Linens, supra.

HOLDING:

    Based on the facts provided, the assembly and programming 
operations performed in the United States on the units of the ISX 
give rise to a new and different article (an ISX) and impart the 
essential character of the ISX. Likewise, the assembly and 
programming operations performed in the United States on the 
components of the UPS units of the ISX give rise to a new and 
different article (a UPS unit). As such, the ISX and the UPS units 
described in this ruling are to be considered products of the United 
States for purposes of government procurement.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 C.F.R. Sec.  177.29. Any party-at-
interest other than the party which requested this final 
determination may request, pursuant to 19 C.F.R. Sec.  177.31, that 
CBP reexamine the matter anew and issue a new final determination. 
Pursuant to 19 C.F.R. Sec.  177.30, any party-at-interest may, 
within 30 days of publication of the Federal Register Notice 
referenced above, seek judicial review of this final determination 
before the Court of International Trade.

    Sincerely,

Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.

[FR Doc. 2010-22928 Filed 9-14-10; 8:45 am]
BILLING CODE 9111-14-P