Notice of Issuance of Final Determination Concerning Iridium Satellite Telephones, 46313-46317 [2011-19559]

Download as PDF 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, DC 20229. Instructions: All submissions received must include the words ‘‘Department of Homeland Security’’ and the docket number for this action. Comments received will be posted without alteration at https://www.regulations.gov, including any personal information provided. Docket: For access to the docket to read background documents or comments received by the COAC, go to https://www.regulations.gov. There will be two public comment periods held during the meeting on August 18, 2011. On-site speakers are requested to limit their comments to 3 minutes. Contact the individual listed below to register as a speaker. Please note that the public comment period for on-site speakers may end before the time indicated on the schedule that is posted on the CBP Web page at the time of the meeting. Comments can also be made electronically anytime during the COAC meeting webcast, but please note that webcast participants will not be able to provide oral comments. Comments submitted electronically will be read into the record at some time during the meeting. 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 Security, the Secretary of the Treasury, 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. erowe on DSK5CLS3C1PROD with NOTICES 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 VerDate Mar<15>2010 15:03 Aug 01, 2011 Jkt 223001 provide comments orally or, for comments submitted electronically during the meeting, by reading the comments into the record. The COAC will receive an update on the following Customs and Border Protection Initiatives and Subcommittee issues: • Update on Automated Commercial Environment (ACE): What’s new? What’s planned? • Update on the Work of the Enhancing Air Cargo Security Subcommittee. • 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: PO 00000 Frm 00047 Fmt 4703 Sfmt 4703 46313 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: E:\FR\FM\02AUN1.SGM 02AUN1 46314 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 erowe on DSK5CLS3C1PROD with NOTICES 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) VerDate Mar<15>2010 15:03 Aug 01, 2011 Jkt 223001 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. PO 00000 Frm 00048 Fmt 4703 Sfmt 4703 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 E:\FR\FM\02AUN1.SGM 02AUN1 Federal Register / Vol. 76, No. 148 / Tuesday, August 2, 2011 / Notices 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: erowe on DSK5CLS3C1PROD with NOTICES 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 VerDate Mar<15>2010 15:03 Aug 01, 2011 Jkt 223001 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 PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 46315 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 E:\FR\FM\02AUN1.SGM 02AUN1 erowe on DSK5CLS3C1PROD with NOTICES 46316 Federal Register / Vol. 76, No. 148 / Tuesday, August 2, 2011 / Notices (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 VerDate Mar<15>2010 15:03 Aug 01, 2011 Jkt 223001 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 PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 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 E:\FR\FM\02AUN1.SGM 02AUN1 Federal Register / Vol. 76, No. 148 / Tuesday, August 2, 2011 / Notices erowe on DSK5CLS3C1PROD with NOTICES 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– 443–2898. 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]


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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]
BILLING CODE P
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