Notice of Issuance of Final Determination Concerning Generation II Military Energizer Flashlights, 26058-26061 [2013-10555]
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Federal Register / Vol. 78, No. 86 / Friday, May 3, 2013 / Notices
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[FR Doc. 2013–10524 Filed 5–2–13; 8:45 am]
BILLING CODE 9110–05–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final
Determination Concerning Generation
II Military Energizer Flashlights
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 the Generation II military
Energizer flashlight, with light-emitting
diodes. Based upon the facts presented,
CBP has concluded in the final
determination that China is the country
of origin of the Generation II military
Energizer flashlight, for purposes of U.S.
Government procurement.
DATES: The final determination was
issued on April 29, 2013. A copy of the
final determination is attached. Any
party-at-interest, as defined in 19 CFR
177.22(d), may seek judicial review of
this final determination within June 3,
2013.
FOR FURTHER INFORMATION CONTACT:
Robert Dinerstein, Valuation and
Special Programs Branch, Regulations
and Rulings, Office of International
Trade (202–325–0132).
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on April 29, 2013,
pursuant to subpart B of part 177,
Customs and Border Protection (CBP)
Regulations (19 CFR part 177, subpart
B), CBP issued a final determination
concerning the country of origin of the
Generation II military Energizer
flashlights which may be offered to the
United States Government under an
undesignated government procurement
contract. This final determination, in
HQ H215657, was issued at the request
of Energizer Battery Inc. under
procedures set forth at 19 CFR Part 177,
Subpart B, which implements Title III of
SUMMARY:
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the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511–18). In the
final determination, CBP concluded that
the Generation II military Energizer
flashlights assembled in the United
States from foreign made parts and
programmed with U.S. origin software
in the United States are products of
China for purposes of U.S. Government
procurement.
Section 177.29, CBP Regulations (19
CFR 177.29), provides that notice of
final determinations shall be published
in the Federal Register within 60 days
of the date the final determination is
issued. Section 177.30, CBP Regulations
(19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR
177.22(d), may seek judicial review of a
final determination within 30 days of
publication of such determination in the
Federal Register.
Dated: April 29, 2013.
Sandra L. Bell,
Executive Director, Regulations and Rulings,
Office of International Trade.
HQ H215657
April 29, 2013
MAR–02 OT:RR:CTF:VS H215657 RSD
CATEGORY: MARKING
M. Jason Cunningham, Esq.
30 South Wacker Drive
Suite 2200 No. 41
Chicago, Illinois 60606
RE: Final Determination of U.S. Government
Procurement: Country of Origin of Military
Energizer Flashlight
Dear Mr. Cunningham:
This is in response to your letter dated
March 28, 2012, requesting a final
determination on behalf of Energizer Battery,
Inc. (Energizer), pursuant to subpart B Part
177 Customs and Border Protection (‘‘CBP’’)
Regulations (19 CFR § 177.21 et. seq.). Under
these regulations, which implement Title III
of the Trade Agreements Act of 1979, as
amended (codified at 19 U.S.C. § 2511 et
seq.), CBP issues country of origin advisory
rulings and final determinations as to
whether an article is or would be a product
of a designated country or instrumentality for
the purpose of granting waivers of certain
‘‘Buy American’’ restrictions in U.S. law or
practice for products offered for sale to the
U.S. Government. This final determination
concerns the country of origin of a
Generation II flashlight. You have provided
additional information regarding the
processing operations performed on the
flashlight in the United States in submissions
made through email and a DVD on July 13,
2012, November 8, 2012, and February 14,
2013. We note that Energizer is a party-atinterest within the meaning of 19 CFR
§ 177.22(d)(1) and is entitled to request this
final determination. We regret the delay in
our response
FACTS:
The product at issue is a finished second
generation military flashlight (Generation II)
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Federal Register / Vol. 78, No. 86 / Friday, May 3, 2013 / Notices
produced by Energizer Battery Inc. On
January 3, 2012, our office issued an advisory
ruling, H195536, to Energizer, concerning the
Generation II flashlight, in which we stated
that the assembly of the various foreign parts
and the foreign LED into the Generation II
flashlight was not sufficiently complex and
significant to constitute a substantial
transformation. In the advisory ruling, we
indicated that the origin of the LED would
determine the origin of the finished
flashlight, and because the LED was of
Chinese origin, the country of origin of the
finished flashlight would also be China. You
have subsequently requested that we
reconsider our determination in the advisory
ruling by requesting this final determination.
You have presented additional information
regarding the production of the energizer
flashlight, photographs of the Generation II
flashlight at various stages of manufacture,
and a DVD showing the final assembly
process of the flashlight.
You advise that Energizer intends to sell
the Generation II flashlight to the U.S.
military. The Generation II flashlight is
designed to be extremely rugged so that it can
withstand forceful impacts without
compromising its performance or its
waterproof operation. It also provides longlasting LED and infrared lighting, which is
invisible to the naked eye, but useful for
signaling in military situations. The previous
versions of the generation flashlights relied
more upon mechanical switches, while the
Generation II flashlight uses a microprocessor
and programming control, which requires
more sophisticated hardware and software
programming.
The Generation II flashlight also
incorporates two additional innovations. The
IFF Mode for the infrared light is an infrared
strobe mode used to ‘‘Identify Friend or Foe.’’
Although the flashlight is designed to be
used with two AA batteries in the field, it can
actually operate with a single AA battery
while maintaining the same features, but
with a shorter battery life.
The production process is as follows:
1. The LED wafer is ‘‘grown’’ in the U.S.
and exported to China. In China, the LED
wafer is mounted and coated with resin and
then shipped to the Energizer facility in
Vermont.
2. A third party in the U.S. mounts the
Chinese LED wafer onto a Chinese-origin
‘‘hex board’’ and coats it with resin.
3. In Vermont, the LED is combined with
various imported subcomponents from China
including the main PCBA, switch PCBA,
head cover, pivot locks, washers, switch
levers, springs, lens rings, screws, buttons,
etc., to create the lens head subassembly.
4. The lens head subassembly’s wiring,
soldering, and physical connections are
inspected.
5. At the second work station, the
following Chinese-origin flashlight body
components are combined with the lens head
subassembly to make the Generation II
flashlight: body seal ring, end cap top plate,
end cap bottom plate, end cap PCBA and
switch assembly, body bracket, spring
holders, battery cartridge, screws, body with
overmold, hinge ring, end cap with
overmold, lock wheel with screw and nut
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insert, belt clip, clip retainer, and clip
screws. During the assembly process, one of
the more important operations that must be
precisely performed is the spot soldering of
the wires, switches and other various
components to the LED. The assembly
process of the flashlight takes approximately
seven minutes to complete under actual
production conditions with fully trained
qualified operators.
According to the information presented in
a November 8, 2012, email, Energizer
provides all the technical and quality control
training necessary for the operators to be
designated as qualified to produce the
flashlights. The DVD submitted,
demonstrates the assembly process involves
putting together more than fifty parts and
components in a multi-step process. The
DVD shows the two work stations at the
Energizer facility in St. Albans, Vermont. As
explained above, at the first workstation, the
operators combine various subcomponents of
the lens head subassembly. After the lens
heads subassembly is created, it is transferred
to a second separate workstation, where the
Energizer operators combine the lens head
subassembly with approximately 30 other
imported components to create the end
product, the Generation II military flashlight.
We also note that in producing the
flashlights, Energizer installs U.S. origin
software that Energizer created in house. The
programming allows for battery type
detection; battery quantity alternative
operation levels; lighting levels; and the
control of power, not for the light output, but
for the purposes of controlling heat and the
protection of the sensitive LEDs. The code
writing for the software programing was
developed and completed in the United
States, but the programming is transmitted to
China for flashing the program to the
circuitry for the lights. Along with the main
white LED light, the flashlight also has four
smaller LED’s that emit red, blue, green, or
infrared light. A modification that Energizer
has made to this model is that each of the
LEDs that emit visible light, i.e. white, red,
blue, and green, can shine at high, medium,
or low intensity. The original programming
for this feature, like all of the programming
for the flashlight, occurs in the United States
and will use a proprietary source code. It is
stated that Energizer has expended
significant resources in connection with the
redesign and development of this product in
the United States. You have enclosed a
spreadsheet that identifies all of the costs and
country of origin data of all subcomponents
used in the lens head subassembly and all
the other components used in the production
of the Generation II military flashlight.
ISSUE:
What is the country of origin of the
Energizer military Generation II flashlight for
purposes of U.S. government procurement?
LAW AND ANALYSIS:
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
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26059
is or would be a product of a designated
country or instrumentality for the purposes
of granting waivers of certain ‘‘Buy
American’’ restrictions in U.S. law or
practice for products offered for sale to the
U.S. Government.
Under the rule of origin set forth under 19
U.S.C. § 2518(4)(B):
An article is a product of a country or
instrumentality only if (i) it is wholly the
growth, product, or manufacture of that
country or instrumentality, or (ii) in the case
of an article which consists in whole or in
part of materials from another country or
instrumentality, it has been substantially
transformed into a new and different article
of commerce with a name, character, or use
distinct from that of the article or articles
from which it was so transformed.
See also, 19 C.F.R. § 177.22(a).
In rendering advisory rulings and final
determinations for purposes of U.S.
government procurement, CBP applies the
provisions of subpart B of part 177 consistent
with the Federal Acquisition Regulations.
See 19 C.F.R. § 177.21. In this regard, CBP
recognizes that the Federal Acquisition
Regulations restrict the U.S. Government’s
purchase of products to U.S.-made or
designated country end products for
acquisitions subject to the TAA. See 48
C.F.R. § 25.403(c)(1). The Federal Acquisition
Regulations define ‘‘U.S.-made end product’’
as:
. . . an article that is mined, produced, or
manufactured in the United States or that is
substantially transformed in the United
States 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 transformed.
48 C.F.R. § 25.003.
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. No one factor is decisive, the
key issue is the extent of operations
performed and whether the parts lose their
identity and become an integral part of the
new article. Belcrest Linens v. United States,
573 F. Supp. 1149 (Ct. Int’l Trade 1983),
aff’d, 741 F.2d 1368 (Fed. Cir. 1984).
Assembly operations that are minimal or
simple, as opposed to complex or
meaningful, will generally not result in a
substantial transformation. See C.S.D. 80–
111, C.S.D. 85–25, C.S.D. 89–110, C.S.D. 89–
118, C.S.D. 90–51, and C.S.D. 90–97.
Additionally, factors such as the resources
expended on product design and
development, extent and nature of postassembly inspection and testing procedures,
and the degree of skill required during the
actual manufacturing process may be
relevant when determining whether a
substantial transformation has occurred.
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Federal Register / Vol. 78, No. 86 / Friday, May 3, 2013 / Notices
In C.S.D. 85–25, 19 Cust. Bull. 844 (1985),
U.S. Customs Service (legacy agency to CBP)
(hereinafter, incorporated with the reference
to ‘‘CBP’’) held that for purposes of the
Generalized System of Preferences (‘‘GSP’’),
the assembly of a large number of fabricated
components onto a printed circuit board in
a process involving a considerable amount of
time and skill resulted in a substantial
transformation. In that case, in excess of 50
discrete fabricated components (such as
resistors, capacitors, diodes, integrated
circuits, sockets, and connectors) were
assembled. Whether an operation is complex
and meaningful depends on the nature of the
operation, including the number of
components assembled, number of different
operations, time, skill level required,
attention to detail, quality control, the value
added to the article, and the overall
employment generated by the manufacturing
process.
CBP has held in a number of cases that
complex and meaningful assembly
operations involving a large number of
components result in a substantial
transformation. For example, in HQ
H047362, dated March 26, 2009, CBP found
that 61 components manufactured in China
and assembled into ground fault circuit
interrupters (GCFIs) in Mexico in a twophase process by skilled workers using
sophisticated equipment were substantially
transformed in Mexico. In particular, we took
into consideration that the first phase
involved the assembly of a PCB in a 42-step
technically complex process that took 12
minutes and that the completed PCB had the
entire major components necessary for the
GCFI to fulfill its function. We also took into
consideration that in the second phase the
PCB would be assembled with 29 other
components to form the GCFIs in a 43-step
process taking approximately 10 minutes,
after which the components lost their
individual identities and become an integral
part of the interrupters with a new name,
character and use.
In HQ 962528 dated February 18, 2000,
CBP considered the eligibility of a
rechargeable power failure light for duty free
treatment under the Generalized System of
Preferences (GSP). In that case, the power
failure light was assembled in Thailand from
various Thai and foreign origin components
including a PCB assembled in Thailand. CBP
found that the process of assembling various
components into a PCB resulted in a
substantial transformation of the imported
components. Moreover, CBP found that the
assembly of the PCB with a bulb holder
assembly, a plug blade assembly and an
upper and lower housing assembly to make
the finished power failure light substantially
transformed the PCB.
By contrast, assembly operations that are
minimal or simple will generally not result
in a substantial transformation. For instance,
in HQ 734050, dated June 17, 1991, CBP held
that Japanese-origin components were not
substantially transformed in China when
assembled in that country to form finished
printers. The printers consisted of five main
components identified as the ‘‘head’’,
‘‘mechanism’’, ‘‘circuit’’, ‘‘power source’’,
and ‘‘outer case.’’ The circuit, power source
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and outer case units were entirely assembled
or molded in Japan. The head and
mechanical units were made in Japan, but
exported to China in an unassembled state.
All five units were exported to China where
the head and mechanical units were
assembled with screws and screwdrivers.
Thereafter, the head, mechanism, circuit, and
power source units were mounted onto the
outer case with screws and screwdrivers. In
holding that the country of origin of the
assembled printers was Japan, CBP
recognized that the vast majority of the
printer’s parts were of Japanese origin and
that the operations performed in China were
relatively simple assembly operations.
CBP first considered the country of origin
of a military flashlight made by Energizer in
HQ H008708 dated May 7, 2007. We found
that the various imported components
(individual parts and subassemblies) were
substantially transformed as a result of the
operations performed in the United States to
produce the replacement lens head assembly
and the finished flashlight. Under each
manufacturing scenario, we concluded that
the imported components lost their
individual identities and became an integral
part of a new article possessing a new name,
character, and use. However, unlike the
scenario here, in support of this conclusion,
we noted that the U.S. origin LED imparted
the essential character to both the
replacement part and the finished product, as
it generated the primary light of both
products. We also recognized that Energizer
had expended significant resources in
connection with the design and development
of the flashlight in the United States. We also
pointed out that the U.S.-origin LED and the
labor performed in the United States during
the assembly and testing operations
represented the majority of the costs
associated with the production of both the
replacement lens head subassembly and the
finished flashlight.
In HQ H017620, dated February 5, 2008,
CBP considered the country of origin of the
prior model Generation I flashlight for
government procurement purposes. We
determined that the manufacturing
operations performed in the U.S. to produce
the replacement lens head subassembly and
the finished flashlight resulted in a
substantial transformation of the imported
components. In support of this conclusion,
we explained that the U.S.-origin LED
imparted the essential character to both the
replacement part and the finished product, as
it generates the primary light of both
products. We also recognized that Energizer
had expended significant resources in
connection with the design and development
of the subject flashlight in the United States.
Moreover, the U.S.-origin LED and the labor
performed in the United States during the
assembly and testing operations represented
a majority of the costs associated with the
production of both the replacement lens head
subassembly and the finished flashlight. We
followed this analysis in an advisory ruling,
HQ H057777 dated July 16, 2009, concerning
the revised Generation II flashlight and
determined that the various imported
components (individual parts and
subassemblies) were substantially
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transformed as a result of the operations
performed in the U.S. to produce both the
lens head subassembly and the finished
flashlight. In support of this conclusion, we
agreed that the U.S. origin LED imparts the
essential character to the Generation II
flashlight as it generates the primary light of
the flashlight.
As previously noted, in contrast to HQ
H017620 and HQ H057777, we indicated in
the advisory ruling H195536 that the U.S.
assembly of the various foreign parts and
LED into the military Generation II flashlight
did not result in a substantial transformation.
We mentioned that the LED still imparted the
essential character of the finished flashlight,
and since it was not of U.S. origin, the
country of origin of the flashlight for
government procurement purposes would
not be the United States. You have now
provided additional information with this
request for a final determination regarding
the assembly process of the Generation II
military flashlight. Some of the information
was presented on a DVD showing the
assembly process.
Upon consideration of the additional
information that you have provided and our
observations of the assembly process shown
in the DVD, we continue to believe that our
conclusion in advisory ruling H195536 that
the foreign made components and parts do
not undergo a substantial transformation
when they are assembled together in the
United States was correct. We note virtually
all of the components of the military
Generation II flashlight, including the most
important component, the LED, are of
Chinese origin. All of the components arrive
in the United States ready for assembly into
the Generation II flashlight. Only the
assembly process is done in the United
States. Although the assembly process
involves putting together a number of
different parts to produce the flashlight, most
of this work consists of rather simple
insertions, relatively simple attaching and
fastening of the components and parts
together. This work seems to involve
following a fairly straightforward routine and
does not seem to be exceptionally complex,
and it only takes several minutes to
complete. You point out that the operators
must solder some of the components
together, but we do not believe that the
soldering involved in this case is a
particularly complex operation that is
indicative of a substantial transformation,
when compared to the operation performed
in China in creating the various parts
including the LED of the flashlight.
It is also noted that in the United States,
the Generation II flashlight is programmed
with software that is written in the United
States. We observe, however, that the
programming is not essential to the basic
operation of the flashlight. The programming
constitutes only an enhancement how the
flashlight operates, but it does not change its
fundamental nature. While the programming
does provide the flashlight with some
additional features, such as being able to
detect the battery type installed in the
flashlight, and controlling the power level for
protection of the LEDs, the programming is
not sufficiently complex enough to change
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Federal Register / Vol. 78, No. 86 / Friday, May 3, 2013 / Notices
the identity or the character of the device.
The flashlight could still function as a
flashlight without the software programming;
after the software is loaded onto the device,
it still remains a flashlight.
Consequently, we find that the assembly
and programming operations Energizer
performs in the United States on the various
imported components (individual parts and
subassemblies) do not create a new article of
commerce with a new name, character, and
use. Therefore, we find the imported
components, including the LED, from China
are not substantially transformed as a result
of the operations performed in the United
States to produce both the lens head
subassembly and the completed Generation II
military flashlight. Accordingly, we find that
the country of origin of the Generation II
military flashlight for government
procurement purposes remains the country of
origin of the components and subassemblies,
including the LED, China.
HOLDING:
Based upon the specific facts of this case,
we find that the imported components of the
flashlight and replacement lens head
subassembly are not substantially
transformed as a result of the described
assembly operations and programing
operations performed in the United States.
The country of origin for government
procurement purposes of the Generation II
military flashlight is China.
Notice of this final determination will be
given in the Federal Register, as required by
19 CFR § 177.29. Any party-at-interest other
than the party which requested the final
determination may request, pursuant to 19
CFR § 177.31, that CBP reexamine the matter
anew and issue a new final determination.
Any party-at-interest may, within 30 days
after 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, Office of Regulations and
Rulings, Office of International Trade
[FR Doc. 2013–10555 Filed 5–2–13; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5681–N–18]
Federal Property Suitable as Facilities
To Assist the Homeless
Office of the Assistant
Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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AGENCY:
SUMMARY: This Notice identifies
unutilized, underutilized, excess, and
surplus Federal property reviewed by
HUD for suitability for use to assist the
homeless.
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14:52 May 02, 2013
Jkt 229001
FOR FURTHER INFORMATION CONTACT:
Juanita Perry, Department of Housing
and Urban Development, 451 Seventh
Street SW., Room 7266, Washington, DC
20410; telephone (202) 402–3970; TTY
number for the hearing- and speechimpaired (202) 708–2565 (these
telephone numbers are not toll-free), or
call the toll-free Title V information line
at 800–927–7588.
SUPPLEMENTARY INFORMATION: In
accordance with 24 CFR part 581 and
section 501 of the Stewart B. McKinney
Homeless Assistance Act (42 U.S.C.
11411), as amended, HUD is publishing
this Notice to identify Federal buildings
and other real property that HUD has
reviewed for suitability for use to assist
the homeless. The properties were
reviewed using information provided to
HUD by Federal landholding agencies
regarding unutilized and underutilized
buildings and real property controlled
by such agencies or by GSA regarding
its inventory of excess or surplus
Federal property. This Notice is also
published in order to comply with the
December 12, 1988 Court Order in
National Coalition for the Homeless v.
Veterans Administration, No. 88–2503–
OG (D.D.C.).
Properties reviewed are listed in this
Notice according to the following
categories: Suitable/available, suitable/
unavailable, and suitable/to be excess,
and unsuitable. The properties listed in
the three suitable categories have been
reviewed by the landholding agencies,
and each agency has transmitted to
HUD: (1) Its intention to make the
property available for use to assist the
homeless, (2) its intention to declare the
property excess to the agency’s needs, or
(3) a statement of the reasons that the
property cannot be declared excess or
made available for use as facilities to
assist the homeless.
Properties listed as suitable/available
will be available exclusively for
homeless use for a period of 60 days
from the date of this Notice. Where
property is described as for ‘‘off-site use
only’’ recipients of the property will be
required to relocate the building to their
own site at their own expense.
Homeless assistance providers
interested in any such property should
send a written expression of interest to
HHS, addressed to Theresa Ritta, Office
of Enterprise Support Programs,
Program Support Center, HHS, room
12–07, 5600 Fishers Lane, Rockville,
MD 20857; (301) 443–2265. (This is not
a toll-free number.) HHS will mail to the
interested provider an application
packet, which will include instructions
for completing the application. In order
to maximize the opportunity to utilize a
PO 00000
Frm 00123
Fmt 4703
Sfmt 4703
26061
suitable property, providers should
submit their written expressions of
interest as soon as possible. For
complete details concerning the
processing of applications, the reader is
encouraged to refer to the interim rule
governing this program, 24 CFR part
581.
For properties listed as suitable/to be
excess, that property may, if
subsequently accepted as excess by
GSA, be made available for use by the
homeless in accordance with applicable
law, subject to screening for other
Federal use. At the appropriate time,
HUD will publish the property in a
Notice showing it as either suitable/
available or suitable/unavailable.
For properties listed as suitable/
unavailable, the landholding agency has
decided that the property cannot be
declared excess or made available for
use to assist the homeless, and the
property will not be available.
Properties listed as unsuitable will
not be made available for any other
purpose for 20 days from the date of this
Notice. Homeless assistance providers
interested in a review by HUD of the
determination of unsuitability should
call the toll free information line at 1–
800–927–7588 for detailed instructions
or write a letter to Ann Marie Oliva at
the address listed at the beginning of
this Notice. Included in the request for
review should be the property address
(including zip code), the date of
publication in the Federal Register, the
landholding agency, and the property
number.
For more information regarding
particular properties identified in this
Notice (i.e., acreage, floor plan, existing
sanitary facilities, exact street address),
providers should contact the
appropriate landholding agencies at the
following addresses: Agriculture: Ms.
Brenda Carignan, Department of
Agriculture, Reporters Building, 300 7th
Street SW., Room 337, Washington, DC
20024, (202) 401–0787; Air Force: Mr.
Robert Moore, Air Force Real Property
Agency, 2261 Hughes Avenue, Suite
156, Lackland AFB, TX, 78236–9852,
(210) 395–9512; Coast Guard:
Commandant, United States Coast
Guard, Attn: Jennifer Stomber, 2100
Second St. SW., Stop 7901, Washington,
DC 20593–0001; (202) 475–5609; GSA:
Mr. Flavio Peres, General Services
Administration, Office of Real Property
Utilization and Disposal, 1800 F Street
NW., Room 7040 Washington, DC
20405, (202) 501–0084; Navy: Mr. Steve
Matteo, Department of the Navy, Asset
Management Division, Naval Facilities
Engineering Command, Washington
Navy Yard, 1330 Patterson Ave. SW.,
Suite 1000, Washington, DC 20374;
E:\FR\FM\03MYN1.SGM
03MYN1
]]>Agencies
[Federal Register Volume 78, Number 86 (Friday, May 3, 2013)]
[Notices]
[Pages 26058-26061]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-10555]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning Generation
II Military Energizer Flashlights
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 the Generation II military Energizer flashlight,
with light-emitting diodes. Based upon the facts presented, CBP has
concluded in the final determination that China is the country of
origin of the Generation II military Energizer flashlight, for purposes
of U.S. Government procurement.
DATES: The final determination was issued on April 29, 2013. A copy of
the final determination is attached. Any party-at-interest, as defined
in 19 CFR 177.22(d), may seek judicial review of this final
determination within June 3, 2013.
FOR FURTHER INFORMATION CONTACT: Robert Dinerstein, Valuation and
Special Programs Branch, Regulations and Rulings, Office of
International Trade (202-325-0132).
SUPPLEMENTARY INFORMATION: Notice is hereby given that on April 29,
2013, pursuant to subpart B of part 177, Customs and Border Protection
(CBP) Regulations (19 CFR part 177, subpart B), CBP issued a final
determination concerning the country of origin of the Generation II
military Energizer flashlights which may be offered to the United
States Government under an undesignated government procurement
contract. This final determination, in HQ H215657, was issued at the
request of Energizer Battery Inc. under procedures set forth at 19 CFR
Part 177, Subpart B, which implements Title III of the Trade Agreements
Act of 1979, as amended (19 U.S.C. 2511-18). In the final
determination, CBP concluded that the Generation II military Energizer
flashlights assembled in the United States from foreign made parts and
programmed with U.S. origin software in the United States are products
of China for purposes of U.S. Government procurement.
Section 177.29, CBP Regulations (19 CFR 177.29), provides that
notice of final determinations shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial
review of a final determination within 30 days of publication of such
determination in the Federal Register.
Dated: April 29, 2013.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International
Trade.
HQ H215657
April 29, 2013
MAR-02 OT:RR:CTF:VS H215657 RSD
CATEGORY: MARKING
M. Jason Cunningham, Esq.
30 South Wacker Drive
Suite 2200 No. 41
Chicago, Illinois 60606
RE: Final Determination of U.S. Government Procurement: Country of
Origin of Military Energizer Flashlight
Dear Mr. Cunningham:
This is in response to your letter dated March 28, 2012,
requesting a final determination on behalf of Energizer Battery,
Inc. (Energizer), pursuant to subpart B Part 177 Customs and Border
Protection (``CBP'') Regulations (19 CFR Sec. 177.21 et. seq.).
Under these regulations, which implement Title III of the Trade
Agreements Act of 1979, as amended (codified at 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 purpose of granting
waivers of certain ``Buy American'' restrictions in U.S. law or
practice for products offered for sale to the U.S. Government. This
final determination concerns the country of origin of a Generation
II flashlight. You have provided additional information regarding
the processing operations performed on the flashlight in the United
States in submissions made through email and a DVD on July 13, 2012,
November 8, 2012, and February 14, 2013. We note that Energizer is a
party-at-interest within the meaning of 19 CFR Sec. 177.22(d)(1)
and is entitled to request this final determination. We regret the
delay in our response
FACTS:
The product at issue is a finished second generation military
flashlight (Generation II)
[[Page 26059]]
produced by Energizer Battery Inc. On January 3, 2012, our office
issued an advisory ruling, H195536, to Energizer, concerning the
Generation II flashlight, in which we stated that the assembly of
the various foreign parts and the foreign LED into the Generation II
flashlight was not sufficiently complex and significant to
constitute a substantial transformation. In the advisory ruling, we
indicated that the origin of the LED would determine the origin of
the finished flashlight, and because the LED was of Chinese origin,
the country of origin of the finished flashlight would also be
China. You have subsequently requested that we reconsider our
determination in the advisory ruling by requesting this final
determination. You have presented additional information regarding
the production of the energizer flashlight, photographs of the
Generation II flashlight at various stages of manufacture, and a DVD
showing the final assembly process of the flashlight.
You advise that Energizer intends to sell the Generation II
flashlight to the U.S. military. The Generation II flashlight is
designed to be extremely rugged so that it can withstand forceful
impacts without compromising its performance or its waterproof
operation. It also provides long-lasting LED and infrared lighting,
which is invisible to the naked eye, but useful for signaling in
military situations. The previous versions of the generation
flashlights relied more upon mechanical switches, while the
Generation II flashlight uses a microprocessor and programming
control, which requires more sophisticated hardware and software
programming.
The Generation II flashlight also incorporates two additional
innovations. The IFF Mode for the infrared light is an infrared
strobe mode used to ``Identify Friend or Foe.'' Although the
flashlight is designed to be used with two AA batteries in the
field, it can actually operate with a single AA battery while
maintaining the same features, but with a shorter battery life.
The production process is as follows:
1. The LED wafer is ``grown'' in the U.S. and exported to China.
In China, the LED wafer is mounted and coated with resin and then
shipped to the Energizer facility in Vermont.
2. A third party in the U.S. mounts the Chinese LED wafer onto a
Chinese-origin ``hex board'' and coats it with resin.
3. In Vermont, the LED is combined with various imported
subcomponents from China including the main PCBA, switch PCBA, head
cover, pivot locks, washers, switch levers, springs, lens rings,
screws, buttons, etc., to create the lens head subassembly.
4. The lens head subassembly's wiring, soldering, and physical
connections are inspected.
5. At the second work station, the following Chinese-origin
flashlight body components are combined with the lens head
subassembly to make the Generation II flashlight: body seal ring,
end cap top plate, end cap bottom plate, end cap PCBA and switch
assembly, body bracket, spring holders, battery cartridge, screws,
body with overmold, hinge ring, end cap with overmold, lock wheel
with screw and nut insert, belt clip, clip retainer, and clip
screws. During the assembly process, one of the more important
operations that must be precisely performed is the spot soldering of
the wires, switches and other various components to the LED. The
assembly process of the flashlight takes approximately seven minutes
to complete under actual production conditions with fully trained
qualified operators.
According to the information presented in a November 8, 2012,
email, Energizer provides all the technical and quality control
training necessary for the operators to be designated as qualified
to produce the flashlights. The DVD submitted, demonstrates the
assembly process involves putting together more than fifty parts and
components in a multi-step process. The DVD shows the two work
stations at the Energizer facility in St. Albans, Vermont. As
explained above, at the first workstation, the operators combine
various subcomponents of the lens head subassembly. After the lens
heads subassembly is created, it is transferred to a second separate
workstation, where the Energizer operators combine the lens head
subassembly with approximately 30 other imported components to
create the end product, the Generation II military flashlight.
We also note that in producing the flashlights, Energizer
installs U.S. origin software that Energizer created in house. The
programming allows for battery type detection; battery quantity
alternative operation levels; lighting levels; and the control of
power, not for the light output, but for the purposes of controlling
heat and the protection of the sensitive LEDs. The code writing for
the software programing was developed and completed in the United
States, but the programming is transmitted to China for flashing the
program to the circuitry for the lights. Along with the main white
LED light, the flashlight also has four smaller LED's that emit red,
blue, green, or infrared light. A modification that Energizer has
made to this model is that each of the LEDs that emit visible light,
i.e. white, red, blue, and green, can shine at high, medium, or low
intensity. The original programming for this feature, like all of
the programming for the flashlight, occurs in the United States and
will use a proprietary source code. It is stated that Energizer has
expended significant resources in connection with the redesign and
development of this product in the United States. You have enclosed
a spreadsheet that identifies all of the costs and country of origin
data of all subcomponents used in the lens head subassembly and all
the other components used in the production of the Generation II
military flashlight.
ISSUE:
What is the country of origin of the Energizer military
Generation II flashlight for purposes of U.S. government
procurement?
LAW AND ANALYSIS:
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 rendering advisory rulings and final determinations for
purposes of U.S. government procurement, CBP applies the provisions
of subpart B of part 177 consistent with the Federal Acquisition
Regulations. See 19 C.F.R. Sec. 177.21. In this regard, CBP
recognizes that the Federal Acquisition Regulations restrict the
U.S. Government's purchase of products to U.S.-made or designated
country end products for acquisitions subject to the TAA. See 48
C.F.R. Sec. 25.403(c)(1). The Federal Acquisition Regulations
define ``U.S.-made end product'' as:
. . . an article that is mined, produced, or manufactured in the
United States or that is substantially transformed in the United
States 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 transformed.
48 C.F.R. Sec. 25.003.
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. No one factor is decisive, the key
issue is the extent of operations performed and whether the parts
lose their identity and become an integral part of the new article.
Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int'l Trade
1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations
that are minimal or simple, as opposed to complex or meaningful,
will generally not result in a substantial transformation. See
C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D.
90-51, and C.S.D. 90-97. Additionally, factors such as the resources
expended on product design and development, extent and nature of
post-assembly inspection and testing procedures, and the degree of
skill required during the actual manufacturing process may be
relevant when determining whether a substantial transformation has
occurred.
[[Page 26060]]
In C.S.D. 85-25, 19 Cust. Bull. 844 (1985), U.S. Customs Service
(legacy agency to CBP) (hereinafter, incorporated with the reference
to ``CBP'') held that for purposes of the Generalized System of
Preferences (``GSP''), the assembly of a large number of fabricated
components onto a printed circuit board in a process involving a
considerable amount of time and skill resulted in a substantial
transformation. In that case, in excess of 50 discrete fabricated
components (such as resistors, capacitors, diodes, integrated
circuits, sockets, and connectors) were assembled. Whether an
operation is complex and meaningful depends on the nature of the
operation, including the number of components assembled, number of
different operations, time, skill level required, attention to
detail, quality control, the value added to the article, and the
overall employment generated by the manufacturing process.
CBP has held in a number of cases that complex and meaningful
assembly operations involving a large number of components result in
a substantial transformation. For example, in HQ H047362, dated
March 26, 2009, CBP found that 61 components manufactured in China
and assembled into ground fault circuit interrupters (GCFIs) in
Mexico in a two-phase process by skilled workers using sophisticated
equipment were substantially transformed in Mexico. In particular,
we took into consideration that the first phase involved the
assembly of a PCB in a 42-step technically complex process that took
12 minutes and that the completed PCB had the entire major
components necessary for the GCFI to fulfill its function. We also
took into consideration that in the second phase the PCB would be
assembled with 29 other components to form the GCFIs in a 43-step
process taking approximately 10 minutes, after which the components
lost their individual identities and become an integral part of the
interrupters with a new name, character and use.
In HQ 962528 dated February 18, 2000, CBP considered the
eligibility of a rechargeable power failure light for duty free
treatment under the Generalized System of Preferences (GSP). In that
case, the power failure light was assembled in Thailand from various
Thai and foreign origin components including a PCB assembled in
Thailand. CBP found that the process of assembling various
components into a PCB resulted in a substantial transformation of
the imported components. Moreover, CBP found that the assembly of
the PCB with a bulb holder assembly, a plug blade assembly and an
upper and lower housing assembly to make the finished power failure
light substantially transformed the PCB.
By contrast, assembly operations that are minimal or simple will
generally not result in a substantial transformation. For instance,
in HQ 734050, dated June 17, 1991, CBP held that Japanese-origin
components were not substantially transformed in China when
assembled in that country to form finished printers. The printers
consisted of five main components identified as the ``head'',
``mechanism'', ``circuit'', ``power source'', and ``outer case.''
The circuit, power source and outer case units were entirely
assembled or molded in Japan. The head and mechanical units were
made in Japan, but exported to China in an unassembled state. All
five units were exported to China where the head and mechanical
units were assembled with screws and screwdrivers. Thereafter, the
head, mechanism, circuit, and power source units were mounted onto
the outer case with screws and screwdrivers. In holding that the
country of origin of the assembled printers was Japan, CBP
recognized that the vast majority of the printer's parts were of
Japanese origin and that the operations performed in China were
relatively simple assembly operations.
CBP first considered the country of origin of a military
flashlight made by Energizer in HQ H008708 dated May 7, 2007. We
found that the various imported components (individual parts and
subassemblies) were substantially transformed as a result of the
operations performed in the United States to produce the replacement
lens head assembly and the finished flashlight. Under each
manufacturing scenario, we concluded that the imported components
lost their individual identities and became an integral part of a
new article possessing a new name, character, and use. However,
unlike the scenario here, in support of this conclusion, we noted
that the U.S. origin LED imparted the essential character to both
the replacement part and the finished product, as it generated the
primary light of both products. We also recognized that Energizer
had expended significant resources in connection with the design and
development of the flashlight in the United States. We also pointed
out that the U.S.-origin LED and the labor performed in the United
States during the assembly and testing operations represented the
majority of the costs associated with the production of both the
replacement lens head subassembly and the finished flashlight.
In HQ H017620, dated February 5, 2008, CBP considered the
country of origin of the prior model Generation I flashlight for
government procurement purposes. We determined that the
manufacturing operations performed in the U.S. to produce the
replacement lens head subassembly and the finished flashlight
resulted in a substantial transformation of the imported components.
In support of this conclusion, we explained that the U.S.-origin LED
imparted the essential character to both the replacement part and
the finished product, as it generates the primary light of both
products. We also recognized that Energizer had expended significant
resources in connection with the design and development of the
subject flashlight in the United States. Moreover, the U.S.-origin
LED and the labor performed in the United States during the assembly
and testing operations represented a majority of the costs
associated with the production of both the replacement lens head
subassembly and the finished flashlight. We followed this analysis
in an advisory ruling, HQ H057777 dated July 16, 2009, concerning
the revised Generation II flashlight and determined that the various
imported components (individual parts and subassemblies) were
substantially transformed as a result of the operations performed in
the U.S. to produce both the lens head subassembly and the finished
flashlight. In support of this conclusion, we agreed that the U.S.
origin LED imparts the essential character to the Generation II
flashlight as it generates the primary light of the flashlight.
As previously noted, in contrast to HQ H017620 and HQ H057777,
we indicated in the advisory ruling H195536 that the U.S. assembly
of the various foreign parts and LED into the military Generation II
flashlight did not result in a substantial transformation. We
mentioned that the LED still imparted the essential character of the
finished flashlight, and since it was not of U.S. origin, the
country of origin of the flashlight for government procurement
purposes would not be the United States. You have now provided
additional information with this request for a final determination
regarding the assembly process of the Generation II military
flashlight. Some of the information was presented on a DVD showing
the assembly process.
Upon consideration of the additional information that you have
provided and our observations of the assembly process shown in the
DVD, we continue to believe that our conclusion in advisory ruling
H195536 that the foreign made components and parts do not undergo a
substantial transformation when they are assembled together in the
United States was correct. We note virtually all of the components
of the military Generation II flashlight, including the most
important component, the LED, are of Chinese origin. All of the
components arrive in the United States ready for assembly into the
Generation II flashlight. Only the assembly process is done in the
United States. Although the assembly process involves putting
together a number of different parts to produce the flashlight, most
of this work consists of rather simple insertions, relatively simple
attaching and fastening of the components and parts together. This
work seems to involve following a fairly straightforward routine and
does not seem to be exceptionally complex, and it only takes several
minutes to complete. You point out that the operators must solder
some of the components together, but we do not believe that the
soldering involved in this case is a particularly complex operation
that is indicative of a substantial transformation, when compared to
the operation performed in China in creating the various parts
including the LED of the flashlight.
It is also noted that in the United States, the Generation II
flashlight is programmed with software that is written in the United
States. We observe, however, that the programming is not essential
to the basic operation of the flashlight. The programming
constitutes only an enhancement how the flashlight operates, but it
does not change its fundamental nature. While the programming does
provide the flashlight with some additional features, such as being
able to detect the battery type installed in the flashlight, and
controlling the power level for protection of the LEDs, the
programming is not sufficiently complex enough to change
[[Page 26061]]
the identity or the character of the device. The flashlight could
still function as a flashlight without the software programming;
after the software is loaded onto the device, it still remains a
flashlight.
Consequently, we find that the assembly and programming
operations Energizer performs in the United States on the various
imported components (individual parts and subassemblies) do not
create a new article of commerce with a new name, character, and
use. Therefore, we find the imported components, including the LED,
from China are not substantially transformed as a result of the
operations performed in the United States to produce both the lens
head subassembly and the completed Generation II military
flashlight. Accordingly, we find that the country of origin of the
Generation II military flashlight for government procurement
purposes remains the country of origin of the components and
subassemblies, including the LED, China.
HOLDING:
Based upon the specific facts of this case, we find that the
imported components of the flashlight and replacement lens head
subassembly are not substantially transformed as a result of the
described assembly operations and programing operations performed in
the United States. The country of origin for government procurement
purposes of the Generation II military flashlight is China.
Notice of this final determination will be given in the Federal
Register, as required by 19 CFR Sec. 177.29. Any party-at-interest
other than the party which requested the final determination may
request, pursuant to 19 CFR Sec. 177.31, that CBP reexamine the
matter anew and issue a new final determination. Any party-at-
interest may, within 30 days after 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, Office of Regulations and Rulings, Office of
International Trade
[FR Doc. 2013-10555 Filed 5-2-13; 8:45 am]
BILLING CODE 9111-14-P
