Notice of Issuance of Final Determination Concerning Iridium Satellite Telephones, 46313-46317 [2011-19559]
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Federal Register / Vol. 76, No. 148 / Tuesday, August 2, 2011 / Notices
• Mail: Ms. Wanda Tate, Office of
Trade Relations, U.S. Customs and
Border Protection, 1300 Pennsylvania
Avenue, NW., Room 5.2A, Washington,
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must include the words ‘‘Department of
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read background documents or
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August 18, 2011. On-site speakers are
requested to limit their comments to 3
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FOR FURTHER INFORMATION CONTACT: Ms.
Wanda Tate, Office of Trade Relations,
U.S. Customs and Border Protection,
Department of Homeland Security, 1300
Pennsylvania Avenue, NW., Room 5.2A,
Washington, DC 20229; telephone 202–
344–1440; facsimile 202–325–4290.
SUPPLEMENTARY INFORMATION: Notice of
this meeting is given under the Federal
Advisory Committee Act, 5 U.S.C. App.
(Pub. L. 92–463). The COAC provides
advice to the Secretary of Homeland
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and the Commissioner of U.S. Customs
and Border Protection (CBP) on matters
pertaining to the commercial operations
of CBP and related functions within
DHS or the Department of the Treasury.
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Agenda
The COAC will meet to review,
discuss next steps and formulate
recommendations on the following two
issues:
• Review and Discuss Managing by
Account: Center of Excellence and
Expertise (CEE) and Account Executive
Pilot Programs.
• Review and Discuss Role of the
Broker, A Broker Revision Project.
Prior to the COAC taking action on
either of these two issues, members of
the public will have an opportunity to
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provide comments orally or, for
comments submitted electronically
during the meeting, by reading the
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The COAC will receive an update on
the following Customs and Border
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issues:
• Update on Automated Commercial
Environment (ACE): What’s new?
What’s planned?
• Update on the Work of the
Enhancing Air Cargo Security
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• Update on the Work of Land Border
Security Initiatives Subcommittee.
• Update on the Work of the One U.S.
Government at the Border—Interagency
Issues Subcommittee.
• Update on the Work of the
Antidumping and Countervailing Duties
(AD/CVD) Enhancements
Subcommittee.
• Update on the Work of the
Enhancing Intellectual Property Rights
Enforcement Efforts Subcommittee.
Dated: July 28, 2011.
Maria Luisa O’Connell,
Senior Advisor for Trade and Public
Engagement, Office of Trade Relations.
[FR Doc. 2011–19560 Filed 8–1–11; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final
Determination Concerning Iridium
Satellite Telephones
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 satellite telephones. We were
asked to consider six scenarios. Based
upon the facts presented, CBP has
concluded in the final determination
that the application board and
transceiver board together convey the
essential character of the phones and it
is at their assembly and programming
where the last substantial
transformation occurs. Therefore, when
the boards are assembled and
programmed in Malaysia, the country of
origin of the phones for purposes of U.S.
government procurement is Malaysia.
When the boards are assembled and
programmed in Singapore, the country
of origin of the phones for purposes of
SUMMARY:
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U.S. government procurement is
Singapore.
The final determination was
issued on July 28, 2011. 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
September 1, 2011.
DATES:
FOR FURTHER INFORMATION CONTACT:
Heather K. Pinnock, Valuation and
Special Programs Branch: (202) 325–
0034.
Notice is
hereby given that on July 28, 2011,
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 satellite telephones which may
be offered to the U.S. Government under
an undesignated government
procurement contract. This final
determination, HQ H130306, was issued
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 application board and
transceiver board together convey the
essential character of the phones and it
is at their assembly and programming
where the last substantial
transformation occurs. Therefore, when
the boards are assembled and
programmed in Malaysia, the country of
origin of the phones for purposes of U.S.
government procurement is Malaysia.
When the boards are assembled and
programmed in Singapore, the country
of origin of the phones for purposes of
U.S. government procurement is
Singapore.
Section 177.29, Customs Regulations
(19 CFR 177.29), provides that a notice
of final determination 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.
SUPPLEMENTARY INFORMATION:
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Federal Register / Vol. 76, No. 148 / Tuesday, August 2, 2011 / Notices
Dated: July 28, 2011.
Sandra L. Bell,
Executive Director, Regulations and Rulings,
Office of International Trade.
Attachment
HQ H170315
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July 28, 2011
MAR–2 OT:RR:CTF:VS H170315 HKP
CATEGORY: Origin Marking
Kevin P. Connelly, Esq.
Seyfarth Shaw, LLP
975 F Street, N.W.
Washington, D.C. 20004–1454
RE: U.S. Government Procurement;
Country of Origin of Iridium 9555
Satellite Telephones; Substantial
Transformation; Marking
Dear Mr. Connelly:
This is in response to your letter,
dated October 21, 2010, requesting a
final determination on behalf of Iridium
Satellite, LLC (‘‘Iridium’’), pursuant to
subpart B of part 177 of the U.S.
Customs and Border Protection (CBP)
Regulations (19 CFR 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 the Iridium 9555
satellite telephone. We note that as a
U.S. importer, Iridium is a party-atinterest within the meaning of 19 CFR
177.22(d)(1) and is entitled to request
this final determination. In reaching our
decision we have taken into account
additional information submitted to this
office on January 30, February 4, May
11, and May 31, 2011.
FACTS:
Iridium imports Iridium 9555 satellite
telephones from Singapore. The
telephones are composed of the
following components: (1) Transceiver
Board, (2) Application Board,
(3) Conductive Spacer, (4) Receiver, (5)
Clik Dome Array (provides feedback on
switch closure), (6) Vibrator, (7) Display,
(8) Radio frequency (RF) emission
shields (can lids), (9) Hands Free (HF)
Speaker/Cable, (10) Antenna Bearing
Housing 1, (11) Antenna Bearing
Housing 2, (12) Keypad, (13) HF
Speaker Housing, (14) Rear Housing
Assembly, (15) Front Assembly,
(16) Bezel, (17) USB Cover, (18) Headset
Jack (HSJ) Cover, (19) Screw Caps, (20)
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RF Cap (external antenna connector
cover), (21) Antenna Plunger, (22)
Antenna Plunger Spring, (23) Bezel
Film, and assorted screws.
The transceiver board (no. 1 above) is
the radio transceiver that communicates
with the Iridium satellite. It
demodulates data from the satellite link
and sends it to the application board
(no. 2 above). In addition, the
transceiver board receives commands
and voice and data streams from the
application board (described infra) and
formats and modulates them into radio
streams that communicate with the
Iridium gateway network infrastructure
using a GSM-like communication
protocol. Among the components on the
transceiver board are two digital base
band (DBB) chips, which contain the
microcontroller for the board, and two
digital signal processor (DSP) cores,
made in China, and two radio frequency
(RF) backend chips, made in Taiwan.
The bill of materials for the transceiver
board was submitted for our review. The
board is assembled in Malaysia.
The application board is a circuit
board that contains all of the user
interfaces for the handsets, i.e., the
display, user connector, key pad and
other buttons, microphone, speaker, and
ear piece. The board also contains
software for SMS messaging, predictive
text, multilingual support, handset
configuration, and phone menu items
such as contacts. The bill of materials
for the application board was submitted
for our review. The board is assembled
in Malaysia.
The other listed components are
manufactured in Singapore, Malaysia,
Hong Kong, China, Korea, the United
Kingdom, and the United States. With
the exception of the components made
in Singapore, all of the components are
shipped to Singapore, where they are
placed in stock until used to
manufacture the satellite telephone.
Handset software programming
consists of programming the transceiver
board using JTAG, a programming
process, and separately downloading
software to the application board. The
software programs for the application
board and for the transceiver board are
developed in the United Kingdom.
Unless otherwise described, as in
scenario six below, handset
programming occurs in Malaysia and/or
Singapore at the board level after the
pertinent chips and circuits have been
installed onto the relevant board, prior
to assembly of the boards with the other
components into phones in Singapore.
In scenario six, the integrated circuit
(IC) for the transceiver board is
programmed before it is incorporated
into the board.
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Six alternative manufacturing
scenarios for the Iridium 9555 satellite
telephones have been described to CBP.
Scenario I:
(1) The Malaysian-origin transceiver
and application boards, both
programmed in Malaysia, are shipped to
Singapore.
(2) The antenna plunger housing 1 is
placed into the antenna plunger spring
insertion jig, and both are inserted into
the antenna bearing housing 1. The
antenna cable is fitted and secured with
clips onto bearing housing 2, and the
bearing housings are fitted together. The
antenna assembly is then inserted into
the antenna bearing housing with the
antenna cable.
(3) The antenna assembly, antenna
cable, and vibrator are inserted into the
rear housing and fitted with clips.
(4) The rear speaker is placed onto the
rear housing and the speaker cable is
positioned. The LCD flex cable that is
connected to the display is inserted into
the connector on the application board
and fastened with clips. The application
board, assembled with the LCD and the
rear housing, is moved to the next
station.
(5) The application board with LCD is
removed from the rear housing. The
receiver is placed on the back of the
LCD display, oriented, and pinned with
a guide pin to the application board.
The transceiver board is stacked on top
of the conductive space gasket, which is
stacked on top of the application board.
The boards are screwed together.
(6) The various can lids are placed on
the assembly. The antenna cable and
rear speaker cable are plugged into the
connectors on the boards.
(7) The HSJ cover and USB cover are
inserted into the front housing. The
keypad is placed onto the front housing.
The rear housing with the stack of
boards is assembled with the bezel onto
the front housing. The front and rear
housings are screwed together.
(8) The phones are scanned, given
serial numbers, and shipped to Malaysia
for testing, labeling, and packaging for
export.
Scenario II:
The application board and transceiver
board are programmed and tested in
Malaysia and shipped to Singapore.
However, the application board is
shipped without an audio jack or a
power jack. The jacks are soldered onto
the board in Singapore. The telephones
are then manufactured in Singapore, as
in Scenario I.
Scenario III:
The application board and the
transceiver board undergo programming
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and functional testing in Singapore, not
in Malaysia. The telephones are then
manufactured in Singapore, as in
Scenario I.
Scenario IV:
The transceiver board undergoes
programming and functional testing in
Singapore, not in Malaysia. The
application board is programmed and
tested in Malaysia and shipped to
Singapore. The telephones are then
manufactured in Singapore, as in
Scenario I.
Scenario V:
The application board is programmed
and tested in Singapore, not in
Malaysia. The transceiver board is
programmed and tested in Malaysia and
shipped to Singapore. The telephones
are then manufactured in Singapore, as
in Scenario I.
Scenario VI:
The IC that stores the firmware which
controls the functionality of the phone
is programmed in Singapore and then
shipped to Malaysia, where it is
incorporated into the transceiver board.
The programmed transceiver board is
then shipped to Singapore. The
application board is programmed and
tested in Malaysia and shipped to
Singapore. The telephones are then
manufactured in Singapore, as in
Scenario I.
ISSUE:
For each scenario, what is the country
of origin of the Iridium 9555 satellite
telephone for purposes of U.S.
government procurement and country of
origin marking?
LAW AND ANALYSIS:
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Country of Origin
Pursuant to Subpart B of Part 177, 19
C.F.R. § 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
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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 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. In Customs Service
Decisions (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.
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 ReadOnly 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 U.S.
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 altered the character of a
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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 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.
Scenario I:
In this scenario, the application and
transceiver boards are assembled and
programmed in Malaysia with U.K.origin software and shipped to
Singapore. After importation into
Singapore, the boards are assembled
with other originating and nonoriginating components into satellite
phones. The completed phones are then
shipped to Malaysia for testing, labeling
and packaging.
You claim that as a result of the
assembly operations performed in
Singapore, the application board and
the transceiver board from Malaysia as
well as the other non-originating
components undergo a substantial
transformation, such that the finished
telephones become products of
Singapore for purposes of U.S.
Government procurement. You cite
Headquarters Ruling Letter (HQ) 557208
(July 24, 1993), and New York Ruling
Letter (NY) R02686 (Oct. 28, 2005), in
support of your position.
HQ 557208 concerned the eligibility
of cordless phones imported from
Mexico to benefit from the Generalized
System of Preferences (GSP). The
phones were manufactured in Mexico
by assembling three PCB subassemblies
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(a base unit circuit board, a base unit
control board, and a handset main
board) of Mexican origin with various
other components, such as speakers,
microphones, and antennas. CBP found
that the process of assembling the
various components onto the three
boards resulted in a substantial
transformation of the imported
components, such that the PCB
subassemblies were new and different
articles with a new name, character, and
use. CBP also found that the assembly
operations in Mexico substantially
transformed the PCB subassemblies into
cordless telephones. We note that HQ
557208 is distinguishable from the
instant case because all the operations
in HQ 557208, including the assembly
of the PCBs, were performed in one
country (Mexico). In this case,
manufacturing operations take place in
both Malaysia and Singapore.
NY R02686 concerned the country of
origin marking of a cellular phone. CBP
found that a digital mobile telephone
was substantially transformed in China,
where final assembly took place,
although the manufacturing process
took place in both Korea and China. The
phone’s printed circuit board was fully
fabricated in Korea and then shipped to
China, where it was combined with the
keypad, housing, antenna, and battery
pack to form a complete and fully
functional cellular phone. The decision
does not indicate the origin of these
components. CBP found that the
Chinese manufacturing operations
produced a new and different article of
commerce with a distinctive name,
character and use, such that the phone
should be marked ‘‘Made in China’’.
In this case, the transceiver board
causes the phone to communicate with
the satellite and demodulates its signals,
which it sends on to the application
board. The transceiver board also
receives commands from the application
board and modulates its signals so that
the phone can communicate with the
Iridium network. The application board
contains all the interfaces that allow a
user to use the phones, significantly, the
microphone, speaker, earpiece and
keypad, which control the functionality
of the phones and convey their essential
character.
In Scenario I, a large number of parts
are assembled in Malaysia and
programmed to form the Malaysianorigin boards. Upon importation into
Singapore, the boards are assembled
with components such as covers,
housing, an antenna, and cables by
means of insertion, stacking, screwing,
and fitting together with clips. We find
that these operations are not sufficiently
complex and meaningful to transform
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the Malaysian boards, which are the
essence of the phones, into a new article
with a new name, use and identity.
Moreover, these boards are combined
with components of various origins in a
third country, namely Singapore, which
is a distinguishable fact from HQ
557208 and NY R02686. See Belcrest
Linens supra. As a result, in Scenario I
we find that the country in which the
last substantial transformation takes
place is Malaysia, which is the country
of origin of the phones.
Scenario II:
For Scenarios II through VI, you argue
that because U.K.-origin software is
loaded onto certain components in
Singapore, additional value is added by
the Singaporean operations, and that the
components and subassemblies are,
therefore, substantially transformed in
Singapore. In support of your view you
cite Data General, discussed supra,
Customs Service Decisions (C.S.D.) 84–
85 (April 2, 1984), and HQ 733085 (July
13, 1990). At issue in C.S.D. 84–85 was
whether the programming of an EPROM
(erasable programmable read only
memory) was a manufacturing process
that resulted in a new article for
purposes of determining country of
origin. CBP found that the rationale of
the court in Data General, that is,
programming a PROM is no less a
substantial transformation than the
manual interconnection of the
components on a circuit board, could be
applied to support the principle that the
essence of an integrated circuit memory
storage device is established by
programming. Consequently, in C.S.D.
84–85 the programming or
reprogramming of an EPROM was found
to result in a new and different article
of commerce. In HQ 733085, applying
Data General, CBP found that
programming in the United States of a
foreign identification card to make it
secure changed the name, character and
use of the card. The card could not
function with the computer security
system for which it was designed until
it had been properly programmed.
Programming done in the United States
using a binary code of U.S. origin
substantially transformed the ID cards.
As in Scenario I, in Scenario II the
application board and transceiver board
are assembled and programmed with
U.K.-origin software in Malaysia.
However, in this scenario, the audio
jack and the power jack for the
application board are soldered onto it in
Singapore, not Malaysia. Once in
Singapore, the boards are assembled
with other originating and nonoriginating components into satellite
phones. The phones are then shipped to
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Malaysia for testing, labeling, and
packaging.
As discussed under Scenario I, as a
result of the assembly and programming
operations in Malaysia, we find that the
boards are products of Malaysia and
convey the essential character of the
phones. Applying the principle in
Belcrest Linens and C.S.D. 85–25, we
find that soldering the jacks onto the
application board in Singapore is not a
sufficiently complex and meaningful
process that transforms the Malaysian
application board into a new article
with a new name, use and identity. As
in Scenario I, we find that the assembly
in Singapore of the transceiver and
application boards with components
such as covers and housing by means of
inserting, screwing, clipping together
and the like, does not substantially
transform the boards, which convey the
essential character of the phones, into a
new and different article. Further,
unlike HQ 733085 where U.S. code was
programmed onto cards in the U.S., here
U.K. software is programmed in
Malaysia. Consequently, we find that
the country of origin of the phones in
this scenario is Malaysia.
Scenario III:
In the rest of the scenarios, handset
programming may take place wholly, or
in part, in Singapore.
In this scenario, the application and
transceiver boards are assembled in
Malaysia, but programmed with U.K.origin software in Singapore. The
phones are then assembled in
Singapore, as described in Scenario I.
Accordingly, in this scenario, there are
three countries under consideration
where programming and/or assembly
operations take place, the last of which
is Singapore. In this scenario, no one
country’s operations dominate the
manufacturing operations of the
telephones. The boards assembled in
Malaysia are important to the function
of the phone, as is the U.K. software.
But the assembly in Singapore
completed the phone. Therefore, we
find that the last substantial
transformation occurred in Singapore.
Consequently, we find that the country
of origin of the phones in this scenario
is Singapore.
Scenario IV:
In this scenario, the transceiver board
is assembled in Malaysia and
programmed in Singapore. However, the
application board is assembled and
programmed in Malaysia. The phones
are assembled in Singapore, as
described in Scenario I.
Relying on previous discussion, we
find that the programming and assembly
operations performed in Singapore
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substantially transform the boards into
products of Singapore. Consequently,
we find that the country of origin of the
phones in this scenario is Singapore.
Scenario V:
This scenario is the inverse of
Scenario IV. Here, the application board
is assembled in Malaysia and
programmed in Singapore. The
transceiver board is assembled and
programmed in Malaysia. The phones
are assembled in Singapore, as
described in Scenario I.
Similar to Scenario IV, we find that
the programming and assembly
operations in Singapore substantially
transform the boards into products of
Singapore. Consequently, we find that
the country of origin of the phones in
this scenario is Singapore.
Scenario VI:
In this scenario, the ICs for the
transceiver boards that store the phones’
U.K.-origin firmware are programmed in
Singapore, prior to being incorporated
into the transceiver boards assembled in
Malaysia. The application board is
assembled and programmed in
Malaysia. The phones are then
assembled in Singapore, as described in
Scenario I.
As in Scenario I, we find that the
country where the last substantial
transformation takes place is Malaysia,
which is the country of origin of the
phones.
Marking
Section 304 of the Tariff Act of 1930,
as amended (19 U.S.C. § 1304), provides
that unless excepted, every article of
foreign origin imported into the United
States shall be marked in a conspicuous
place as legibly, indelibly, and
permanently as the nature of the article
(or its container) will permit, in such a
manner as to indicate to the ultimate
purchaser in the United States, the
English name of the country of origin of
the article. Congressional intent in
enacting 19 U.S.C. § 1304 was ‘‘that the
ultimate purchaser should be able to
know by an inspection of the marking
on the imported goods the country of
which the goods is the product. The
evident purpose is to mark the goods so
that at the time of purchase the ultimate
purchaser may, by knowing where the
goods were produced, be able to buy or
refuse to buy them, if such marking
should influence his will.’’ United
States v. Friedlander & Co., 27 C.C.P.A.
297 at 302; C.A.D. 104 (1940).
Part 134, CBP Regulations (19 C.F.R.
§ 134) implements the country of origin
marking requirements and exceptions of
19 U.S.C. § 1304. Section 134.1(b), CBP
Regulations (19 C.F.R. § 134.1(b)),
VerDate Mar<15>2010
15:03 Aug 01, 2011
Jkt 223001
defines ‘‘country of origin’’ as ‘‘the
country of manufacture, production, or
growth of any article of foreign origin
entering the United States. Further work
or material added to an article in
another country must effect a
substantial transformation in order to
render such other country the ‘country
of origin’ within the meaning of [the
marking laws and regulations].’’ For
country of origin marking purposes, a
substantial transformation of an article
occurs when it is used in manufacture,
which results in an article having a
name, character, or use differing from
that of the article before the processing.
However, if the manufacturing or
combining process is merely a minor
one that leaves the identity of the article
intact, a substantial transformation has
not occurred. See Uniroyal, Inc. v.
United States, 3 Ct. Int’l Trade 220, 543
F. Supp. 1026, 1029 (1982), aff’d, 702
F.2d 1022 (Fed. Cir. 1983).
In Scenarios I, II, and VI, the country
where the last substantial
transformation occurs is Malaysia.
Accordingly, in these scenarios the
country of origin for marking purposes
is Malaysia, and the phones may be
marked ‘‘Made in Malaysia’’. In
Scenarios III through V, the country
where the last substantial
transformation takes place is Singapore.
Therefore, in these scenarios the
country of origin for marking purposes
is Singapore, and the phones may be
marked ‘‘Made in Singapore’’. Your
suggested marking, ‘‘Substantially
Transformed in [country]’’, would be
confusing to the ultimate purchaser.
HOLDING:
Based on the facts of this case, we
find that in Scenarios I, II and VI, the
country where the last substantial
transformation takes place is Malaysia.
The country of origin of the Iridium
9555 satellite phones is Malaysia for
purposes of U.S. Government
procurement and country of origin
marking.
In Scenarios III through V, the country
where the last substantial
transformation takes place is Singapore.
The country of origin of the Iridium
9555 satellite phones is Singapore for
purposes of U.S. Government
procurement and country of origin
marking.
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.
PO 00000
Frm 00051
Fmt 4703
Sfmt 4703
46317
§ 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. 2011–19559 Filed 8–1–11; 8:45 am]
BILLING CODE P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
[FWS–R5–R–2009–N184; BAC–4311–K9–S3]
Nantucket National Wildlife Refuge,
Nantucket, MA; Draft Comprehensive
Conservation Plan, Land Protection
Plan, and Environmental Assessment
Fish and Wildlife Service,
Interior.
ACTION: Notice of availability; request
for comments.
AGENCY:
We, the U.S. Fish and
Wildlife Service (Service), announce the
availability of a draft comprehensive
conservation plan (CCP), including a
land protection plan (LPP), and
environmental assessment (EA) for
Nantucket National Wildlife Refuge
(NWR) for public review and comment.
The draft CCP/EA describes our
proposal for managing the refuge for the
next 15 years.
DATES: To ensure consideration, please
send your written comments by
September 1, 2011. We will hold at least
one public meeting in Nantucket, MA,
during the public comment period to
receive comments and provide
information on the draft plan. We will
also announce opportunities for public
input in local news media, our project
mailing list, and on our regional
planning Web site: https://www.fws.gov/
northeast/planning/nantucket/
ccphome.html.
SUMMARY:
You may submit comments
or requests for copies or more
information by any one of the following
methods. You may request hard copies
or a CD–ROM of the documents.
E-mail: northeastplanning@fws.gov.
Include ‘‘Nantucket NWR draft CCP/
EA’’ in the subject line of the message.
Fax: Attention: Carl Melberg, 978–
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U.S. Mail: Eastern Massachusetts
NWR Complex, 73 Weir Hill Road,
Sudbury, MA 01776.
In-Person Drop-off, Viewing, or
Pickup: Call 978–443–4661 to make an
ADDRESSES:
E:\FR\FM\02AUN1.SGM
02AUN1
Agencies
[Federal Register Volume 76, Number 148 (Tuesday, August 2, 2011)]
[Notices]
[Pages 46313-46317]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19559]
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning Iridium
Satellite Telephones
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
-----------------------------------------------------------------------
SUMMARY: This document provides notice that U.S. Customs and Border
Protection (``CBP'') has issued a final determination concerning the
country of origin of satellite telephones. We were asked to consider
six scenarios. Based upon the facts presented, CBP has concluded in the
final determination that the application board and transceiver board
together convey the essential character of the phones and it is at
their assembly and programming where the last substantial
transformation occurs. Therefore, when the boards are assembled and
programmed in Malaysia, the country of origin of the phones for
purposes of U.S. government procurement is Malaysia. When the boards
are assembled and programmed in Singapore, the country of origin of the
phones for purposes of U.S. government procurement is Singapore.
DATES: The final determination was issued on July 28, 2011. 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 September 1, 2011.
FOR FURTHER INFORMATION CONTACT: Heather K. Pinnock, Valuation and
Special Programs Branch: (202) 325-0034.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on July 28,
2011, 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 satellite telephones which may be offered to the
U.S. Government under an undesignated government procurement contract.
This final determination, HQ H130306, was issued 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 application board and transceiver board together convey
the essential character of the phones and it is at their assembly and
programming where the last substantial transformation occurs.
Therefore, when the boards are assembled and programmed in Malaysia,
the country of origin of the phones for purposes of U.S. government
procurement is Malaysia. When the boards are assembled and programmed
in Singapore, the country of origin of the phones for purposes of U.S.
government procurement is Singapore.
Section 177.29, Customs Regulations (19 CFR 177.29), provides that
a notice of final determination 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.
[[Page 46314]]
Dated: July 28, 2011.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International
Trade.
Attachment
HQ H170315
July 28, 2011
MAR-2 OT:RR:CTF:VS H170315 HKP
CATEGORY: Origin Marking
Kevin P. Connelly, Esq.
Seyfarth Shaw, LLP
975 F Street, N.W.
Washington, D.C. 20004-1454
RE: U.S. Government Procurement; Country of Origin of Iridium 9555
Satellite Telephones; Substantial Transformation; Marking
Dear Mr. Connelly:
This is in response to your letter, dated October 21, 2010,
requesting a final determination on behalf of Iridium Satellite, LLC
(``Iridium''), pursuant to subpart B of part 177 of the U.S. Customs
and Border Protection (CBP) Regulations (19 CFR Part 177). Under these
regulations, which implement Title III of the Trade Agreements Act of
1979 (TAA), 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.
This final determination concerns the country of origin of the
Iridium 9555 satellite telephone. We note that as a U.S. importer,
Iridium is a party-at-interest within the meaning of 19 CFR
177.22(d)(1) and is entitled to request this final determination. In
reaching our decision we have taken into account additional information
submitted to this office on January 30, February 4, May 11, and May 31,
2011.
FACTS:
Iridium imports Iridium 9555 satellite telephones from Singapore.
The telephones are composed of the following components: (1)
Transceiver Board, (2) Application Board, (3) Conductive Spacer, (4)
Receiver, (5) Clik Dome Array (provides feedback on switch closure),
(6) Vibrator, (7) Display, (8) Radio frequency (RF) emission shields
(can lids), (9) Hands Free (HF) Speaker/Cable, (10) Antenna Bearing
Housing 1, (11) Antenna Bearing Housing 2, (12) Keypad, (13) HF Speaker
Housing, (14) Rear Housing Assembly, (15) Front Assembly, (16) Bezel,
(17) USB Cover, (18) Headset Jack (HSJ) Cover, (19) Screw Caps, (20) RF
Cap (external antenna connector cover), (21) Antenna Plunger, (22)
Antenna Plunger Spring, (23) Bezel Film, and assorted screws.
The transceiver board (no. 1 above) is the radio transceiver that
communicates with the Iridium satellite. It demodulates data from the
satellite link and sends it to the application board (no. 2 above). In
addition, the transceiver board receives commands and voice and data
streams from the application board (described infra) and formats and
modulates them into radio streams that communicate with the Iridium
gateway network infrastructure using a GSM-like communication protocol.
Among the components on the transceiver board are two digital base band
(DBB) chips, which contain the microcontroller for the board, and two
digital signal processor (DSP) cores, made in China, and two radio
frequency (RF) backend chips, made in Taiwan. The bill of materials for
the transceiver board was submitted for our review. The board is
assembled in Malaysia.
The application board is a circuit board that contains all of the
user interfaces for the handsets, i.e., the display, user connector,
key pad and other buttons, microphone, speaker, and ear piece. The
board also contains software for SMS messaging, predictive text,
multilingual support, handset configuration, and phone menu items such
as contacts. The bill of materials for the application board was
submitted for our review. The board is assembled in Malaysia.
The other listed components are manufactured in Singapore,
Malaysia, Hong Kong, China, Korea, the United Kingdom, and the United
States. With the exception of the components made in Singapore, all of
the components are shipped to Singapore, where they are placed in stock
until used to manufacture the satellite telephone.
Handset software programming consists of programming the
transceiver board using JTAG, a programming process, and separately
downloading software to the application board. The software programs
for the application board and for the transceiver board are developed
in the United Kingdom. Unless otherwise described, as in scenario six
below, handset programming occurs in Malaysia and/or Singapore at the
board level after the pertinent chips and circuits have been installed
onto the relevant board, prior to assembly of the boards with the other
components into phones in Singapore. In scenario six, the integrated
circuit (IC) for the transceiver board is programmed before it is
incorporated into the board.
Six alternative manufacturing scenarios for the Iridium 9555
satellite telephones have been described to CBP.
Scenario I:
(1) The Malaysian-origin transceiver and application boards, both
programmed in Malaysia, are shipped to Singapore.
(2) The antenna plunger housing 1 is placed into the antenna
plunger spring insertion jig, and both are inserted into the antenna
bearing housing 1. The antenna cable is fitted and secured with clips
onto bearing housing 2, and the bearing housings are fitted together.
The antenna assembly is then inserted into the antenna bearing housing
with the antenna cable.
(3) The antenna assembly, antenna cable, and vibrator are inserted
into the rear housing and fitted with clips.
(4) The rear speaker is placed onto the rear housing and the
speaker cable is positioned. The LCD flex cable that is connected to
the display is inserted into the connector on the application board and
fastened with clips. The application board, assembled with the LCD and
the rear housing, is moved to the next station.
(5) The application board with LCD is removed from the rear
housing. The receiver is placed on the back of the LCD display,
oriented, and pinned with a guide pin to the application board. The
transceiver board is stacked on top of the conductive space gasket,
which is stacked on top of the application board. The boards are
screwed together.
(6) The various can lids are placed on the assembly. The antenna
cable and rear speaker cable are plugged into the connectors on the
boards.
(7) The HSJ cover and USB cover are inserted into the front
housing. The keypad is placed onto the front housing. The rear housing
with the stack of boards is assembled with the bezel onto the front
housing. The front and rear housings are screwed together.
(8) The phones are scanned, given serial numbers, and shipped to
Malaysia for testing, labeling, and packaging for export.
Scenario II:
The application board and transceiver board are programmed and
tested in Malaysia and shipped to Singapore. However, the application
board is shipped without an audio jack or a power jack. The jacks are
soldered onto the board in Singapore. The telephones are then
manufactured in Singapore, as in Scenario I.
Scenario III:
The application board and the transceiver board undergo programming
[[Page 46315]]
and functional testing in Singapore, not in Malaysia. The telephones
are then manufactured in Singapore, as in Scenario I.
Scenario IV:
The transceiver board undergoes programming and functional testing
in Singapore, not in Malaysia. The application board is programmed and
tested in Malaysia and shipped to Singapore. The telephones are then
manufactured in Singapore, as in Scenario I.
Scenario V:
The application board is programmed and tested in Singapore, not in
Malaysia. The transceiver board is programmed and tested in Malaysia
and shipped to Singapore. The telephones are then manufactured in
Singapore, as in Scenario I.
Scenario VI:
The IC that stores the firmware which controls the functionality of
the phone is programmed in Singapore and then shipped to Malaysia,
where it is incorporated into the transceiver board. The programmed
transceiver board is then shipped to Singapore. The application board
is programmed and tested in Malaysia and shipped to Singapore. The
telephones are then manufactured in Singapore, as in Scenario I.
ISSUE:
For each scenario, what is the country of origin of the Iridium
9555 satellite telephone for purposes of U.S. government procurement
and country of origin marking?
LAW AND ANALYSIS:
Country of Origin
Pursuant to Subpart B of Part 177, 19 C.F.R. 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 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. In Customs Service
Decisions (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.
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 U.S.
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
altered 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 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.
Scenario I:
In this scenario, the application and transceiver boards are
assembled and programmed in Malaysia with U.K.-origin software and
shipped to Singapore. After importation into Singapore, the boards are
assembled with other originating and non-originating components into
satellite phones. The completed phones are then shipped to Malaysia for
testing, labeling and packaging.
You claim that as a result of the assembly operations performed in
Singapore, the application board and the transceiver board from
Malaysia as well as the other non-originating components undergo a
substantial transformation, such that the finished telephones become
products of Singapore for purposes of U.S. Government procurement. You
cite Headquarters Ruling Letter (HQ) 557208 (July 24, 1993), and New
York Ruling Letter (NY) R02686 (Oct. 28, 2005), in support of your
position.
HQ 557208 concerned the eligibility of cordless phones imported
from Mexico to benefit from the Generalized System of Preferences
(GSP). The phones were manufactured in Mexico by assembling three PCB
subassemblies
[[Page 46316]]
(a base unit circuit board, a base unit control board, and a handset
main board) of Mexican origin with various other components, such as
speakers, microphones, and antennas. CBP found that the process of
assembling the various components onto the three boards resulted in a
substantial transformation of the imported components, such that the
PCB subassemblies were new and different articles with a new name,
character, and use. CBP also found that the assembly operations in
Mexico substantially transformed the PCB subassemblies into cordless
telephones. We note that HQ 557208 is distinguishable from the instant
case because all the operations in HQ 557208, including the assembly of
the PCBs, were performed in one country (Mexico). In this case,
manufacturing operations take place in both Malaysia and Singapore.
NY R02686 concerned the country of origin marking of a cellular
phone. CBP found that a digital mobile telephone was substantially
transformed in China, where final assembly took place, although the
manufacturing process took place in both Korea and China. The phone's
printed circuit board was fully fabricated in Korea and then shipped to
China, where it was combined with the keypad, housing, antenna, and
battery pack to form a complete and fully functional cellular phone.
The decision does not indicate the origin of these components. CBP
found that the Chinese manufacturing operations produced a new and
different article of commerce with a distinctive name, character and
use, such that the phone should be marked ``Made in China''.
In this case, the transceiver board causes the phone to communicate
with the satellite and demodulates its signals, which it sends on to
the application board. The transceiver board also receives commands
from the application board and modulates its signals so that the phone
can communicate with the Iridium network. The application board
contains all the interfaces that allow a user to use the phones,
significantly, the microphone, speaker, earpiece and keypad, which
control the functionality of the phones and convey their essential
character.
In Scenario I, a large number of parts are assembled in Malaysia
and programmed to form the Malaysian-origin boards. Upon importation
into Singapore, the boards are assembled with components such as
covers, housing, an antenna, and cables by means of insertion,
stacking, screwing, and fitting together with clips. We find that these
operations are not sufficiently complex and meaningful to transform the
Malaysian boards, which are the essence of the phones, into a new
article with a new name, use and identity. Moreover, these boards are
combined with components of various origins in a third country, namely
Singapore, which is a distinguishable fact from HQ 557208 and NY
R02686. See Belcrest Linens supra. As a result, in Scenario I we find
that the country in which the last substantial transformation takes
place is Malaysia, which is the country of origin of the phones.
Scenario II:
For Scenarios II through VI, you argue that because U.K.-origin
software is loaded onto certain components in Singapore, additional
value is added by the Singaporean operations, and that the components
and subassemblies are, therefore, substantially transformed in
Singapore. In support of your view you cite Data General, discussed
supra, Customs Service Decisions (C.S.D.) 84-85 (April 2, 1984), and HQ
733085 (July 13, 1990). At issue in C.S.D. 84-85 was whether the
programming of an EPROM (erasable programmable read only memory) was a
manufacturing process that resulted in a new article for purposes of
determining country of origin. CBP found that the rationale of the
court in Data General, that is, programming a PROM is no less a
substantial transformation than the manual interconnection of the
components on a circuit board, could be applied to support the
principle that the essence of an integrated circuit memory storage
device is established by programming. Consequently, in C.S.D. 84-85 the
programming or reprogramming of an EPROM was found to result in a new
and different article of commerce. In HQ 733085, applying Data General,
CBP found that programming in the United States of a foreign
identification card to make it secure changed the name, character and
use of the card. The card could not function with the computer security
system for which it was designed until it had been properly programmed.
Programming done in the United States using a binary code of U.S.
origin substantially transformed the ID cards.
As in Scenario I, in Scenario II the application board and
transceiver board are assembled and programmed with U.K.-origin
software in Malaysia. However, in this scenario, the audio jack and the
power jack for the application board are soldered onto it in Singapore,
not Malaysia. Once in Singapore, the boards are assembled with other
originating and non-originating components into satellite phones. The
phones are then shipped to Malaysia for testing, labeling, and
packaging.
As discussed under Scenario I, as a result of the assembly and
programming operations in Malaysia, we find that the boards are
products of Malaysia and convey the essential character of the phones.
Applying the principle in Belcrest Linens and C.S.D. 85-25, we find
that soldering the jacks onto the application board in Singapore is not
a sufficiently complex and meaningful process that transforms the
Malaysian application board into a new article with a new name, use and
identity. As in Scenario I, we find that the assembly in Singapore of
the transceiver and application boards with components such as covers
and housing by means of inserting, screwing, clipping together and the
like, does not substantially transform the boards, which convey the
essential character of the phones, into a new and different article.
Further, unlike HQ 733085 where U.S. code was programmed onto cards in
the U.S., here U.K. software is programmed in Malaysia. Consequently,
we find that the country of origin of the phones in this scenario is
Malaysia.
Scenario III:
In the rest of the scenarios, handset programming may take place
wholly, or in part, in Singapore.
In this scenario, the application and transceiver boards are
assembled in Malaysia, but programmed with U.K.-origin software in
Singapore. The phones are then assembled in Singapore, as described in
Scenario I. Accordingly, in this scenario, there are three countries
under consideration where programming and/or assembly operations take
place, the last of which is Singapore. In this scenario, no one
country's operations dominate the manufacturing operations of the
telephones. The boards assembled in Malaysia are important to the
function of the phone, as is the U.K. software. But the assembly in
Singapore completed the phone. Therefore, we find that the last
substantial transformation occurred in Singapore. Consequently, we find
that the country of origin of the phones in this scenario is Singapore.
Scenario IV:
In this scenario, the transceiver board is assembled in Malaysia
and programmed in Singapore. However, the application board is
assembled and programmed in Malaysia. The phones are assembled in
Singapore, as described in Scenario I.
Relying on previous discussion, we find that the programming and
assembly operations performed in Singapore
[[Page 46317]]
substantially transform the boards into products of Singapore.
Consequently, we find that the country of origin of the phones in this
scenario is Singapore.
Scenario V:
This scenario is the inverse of Scenario IV. Here, the application
board is assembled in Malaysia and programmed in Singapore. The
transceiver board is assembled and programmed in Malaysia. The phones
are assembled in Singapore, as described in Scenario I.
Similar to Scenario IV, we find that the programming and assembly
operations in Singapore substantially transform the boards into
products of Singapore. Consequently, we find that the country of origin
of the phones in this scenario is Singapore.
Scenario VI:
In this scenario, the ICs for the transceiver boards that store the
phones' U.K.-origin firmware are programmed in Singapore, prior to
being incorporated into the transceiver boards assembled in Malaysia.
The application board is assembled and programmed in Malaysia. The
phones are then assembled in Singapore, as described in Scenario I.
As in Scenario I, we find that the country where the last
substantial transformation takes place is Malaysia, which is the
country of origin of the phones.
Marking
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. Sec.
1304), provides that unless excepted, every article of foreign origin
imported into the United States shall be marked in a conspicuous place
as legibly, indelibly, and permanently as the nature of the article (or
its container) will permit, in such a manner as to indicate to the
ultimate purchaser in the United States, the English name of the
country of origin of the article. Congressional intent in enacting 19
U.S.C. Sec. 1304 was ``that the ultimate purchaser should be able to
know by an inspection of the marking on the imported goods the country
of which the goods is the product. The evident purpose is to mark the
goods so that at the time of purchase the ultimate purchaser may, by
knowing where the goods were produced, be able to buy or refuse to buy
them, if such marking should influence his will.'' United States v.
Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).
Part 134, CBP Regulations (19 C.F.R. Sec. 134) implements the
country of origin marking requirements and exceptions of 19 U.S.C.
Sec. 1304. Section 134.1(b), CBP Regulations (19 C.F.R. Sec.
134.1(b)), defines ``country of origin'' as ``the country of
manufacture, production, or growth of any article of foreign origin
entering the United States. Further work or material added to an
article in another country must effect a substantial transformation in
order to render such other country the `country of origin' within the
meaning of [the marking laws and regulations].'' For country of origin
marking purposes, a substantial transformation of an article occurs
when it is used in manufacture, which results in an article having a
name, character, or use differing from that of the article before the
processing. However, if the manufacturing or combining process is
merely a minor one that leaves the identity of the article intact, a
substantial transformation has not occurred. See Uniroyal, Inc. v.
United States, 3 Ct. Int'l Trade 220, 543 F. Supp. 1026, 1029 (1982),
aff'd, 702 F.2d 1022 (Fed. Cir. 1983).
In Scenarios I, II, and VI, the country where the last substantial
transformation occurs is Malaysia. Accordingly, in these scenarios the
country of origin for marking purposes is Malaysia, and the phones may
be marked ``Made in Malaysia''. In Scenarios III through V, the country
where the last substantial transformation takes place is Singapore.
Therefore, in these scenarios the country of origin for marking
purposes is Singapore, and the phones may be marked ``Made in
Singapore''. Your suggested marking, ``Substantially Transformed in
[country]'', would be confusing to the ultimate purchaser.
HOLDING:
Based on the facts of this case, we find that in Scenarios I, II
and VI, the country where the last substantial transformation takes
place is Malaysia. The country of origin of the Iridium 9555 satellite
phones is Malaysia for purposes of U.S. Government procurement and
country of origin marking.
In Scenarios III through V, the country where the last substantial
transformation takes place is Singapore. The country of origin of the
Iridium 9555 satellite phones is Singapore for purposes of U.S.
Government procurement and country of origin marking.
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. 2011-19559 Filed 8-1-11; 8:45 am]
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