Notice of Issuance of Final Determination Concerning Monochrome Laser Printers, 32424-32427 [2013-12819]
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Federal Register / Vol. 78, No. 104 / Thursday, May 30, 2013 / Notices
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[FR Doc. 2013–12793 Filed 5–29–13; 8:45 am]
BILLING CODE 9111–97–P
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DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final
Determination Concerning
Monochrome Laser Printers
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 certain monochrome laser
printers. Based upon the facts
presented, CBP has concluded in the
final determination that the United
States is the country of origin of the
monochrome laser printers for purposes
of U.S. Government procurement.
DATES: The final determination was
issued on May 21, 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 on or before
July 1, 2013.
FOR FURTHER INFORMATION CONTACT:
Suzanne Kane, Valuation and Special
Programs Branch: (202) 325–0119.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on May 21, 2013,
pursuant to subpart B of part 177,
Customs Regulations (19 CFR part 177,
subpart B), CBP issued a final
determination concerning the country of
origin of certain monochrome laser
printers which may be offered to the
U.S. Government under an
undesignated procurement contract.
This final determination, in HQ
H241146, was issued at the request of
Ricoh Electronics, Inc. under
procedures set forth at 19 CFR part 177,
subpart B, which implements Title III of
the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511–18). In the
final determination, CBP concluded
that, based upon the facts presented, the
particular monochrome laser printers,
assembled in the United States from
parts made in China, Japan, and the
Philippines, are substantially
transformed in the United States, such
that the United States is the country of
origin of the finished article for
purposes of U.S. Government
procurement.
Section 177.29, Customs Regulations
(19 CFR 177.29), provides that notice of
final determinations shall be published
in the Federal Register within 60 days
of the date the final determination is
issued. Section 177.30, Customs
SUMMARY:
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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: May 22, 2013.
Glen E. Vereb,
Acting Executive Director, Regulations and
Rulings, Office of International Trade.
Attachment
HQ H241146
May 21, 2013
OT:RR:CTF:VS H241146 SEK
CATEGORY: Marking
Ms. Fusae Nara
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036–4039
RE: U.S. Government Procurement;
Country of Origin of Ricoh Aficio
SP 5200DNG/SP 5210DNG
Monochrome Laser Printers
Dear Ms. Nara:
This is in response to your letter,
dated March 11, 2013, requesting a final
determination on behalf of your client,
Ricoh Electronics, Inc. (Ricoh), pursuant
to subpart B of Part 177, Customs and
Border Protection (CBP) Regulations (19
CFR § 177.21 et seq.). Under these
regulations, which implement Title III
of the Trade Agreements Act of 1979
(TAA), as amended (19 U.S.C. § 2511 et
seq.), CBP issues country of origin trade
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 certain monochrome laser
printers that Ricoh may sell to the U.S.
Government. We note that Ricoh is a
party-at-interest within the meaning of
19 CFR § 177.22(d)(1) and is entitled to
request this final determination.
FACTS:
The products at issue in this ruling
are certain monochrome laser printers
manufactured by Ricoh, consisting of
the Ricoh Aficio SP 5200DNG and SP
5210DNG. Ricoh intends to import the
components and subassemblies of the
printers from China and the Philippines
for manufacture in the U.S. and
subsequent sale to U.S. government
agencies.
Ricoh states that it developed the
SP52000-series printers in Japan, and
that the entire engineering,
development, design and artwork
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processes for the printers took place in
Japan. The project team consisted of
approximately 40 engineers, who were
all based in Japan and worked for
Ricoh’s parent company, Ricoh
Company, Ltd. At the initial stage of the
printers production process, individual
parts are assembled into various
assemblages of parts called
subassemblies. The manufacture of
subassemblies takes place in multiple
countries, including the United States,
China, and the Philippines. The
subassembly units incorporated in
Ricoh’s printers include the following:
• Duplex Unit: enables double-sided
copying and printing. It is assembled in
China.
• Fusing Unit: contains a fusing roller
and a pressure roller, which are both
manufactured in Korea, and a heater
manufactured in Japan. The main task of
the Fusing unit is to permanently affix
the toner on the paper by applying heat
and pressure to the toner powder. The
Fusing unit is assembled in China.
• Laser Unit: receives the image from
the Scanning unit and copies the image
onto the organic photo conductor (OPC)
drum. The Laser unit is assembled in
China. The two key components of the
Laser unit, the laser diode unit and two
lenses, are manufactured in Japan.
• All in One Unit (AIO): is assembled
in China and contains the toner powder
manufactured in Japan using a formula
developed by Ricoh Company, Ltd.
• Engine Board (EGB): controls all
printer engine functions both directly
and through other control boards. It is
assembled in China.
• Power Supply Unit (PSU): provides
the DC power to the system and AC
power to the fusing. It is assembled in
China.
• Hard Disk Drive (HDD): is either a
standard or optional item depending on
the model type of printer. Ricoh
purchases HDDs made in the
Philippines from another company.
• Operation Panel: acts as the
interface between the user and printer
and is assembled in China.
Ricoh states that the above
subassemblies are assembled in China to
construct the incomplete and nonfunctional printer engine. The
incomplete engine includes the duplex
unit, fusing unit, laser unit, AIO, EGB,
PSU and other paper tray and
mechanical parts to move paper
throughout the printer. Ricoh asserts
that the assembly of the incomplete and
non-functional printer engine does not
require sophisticated skills or expensive
machinery.
The next stage of the production
process is the Controller unit
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subassembly. Ricoh states that in a
completed printer, the Controller unit
functions as the electronic ‘‘brain’’ of
the printer and controls its functions.
Ricoh states that it has invested
significant amounts for R&D in Japan to
develop the Controller unit, as well as
millions of dollars in Ricoh’s factory in
Tustin, California for the machinery to
manufacture different types of
Controller units. Ricoh considers the
manufacturing of the Controller unit,
including the printed circuit board
(PCB) and programming of the firmware
(the fixed internal programs that control
electronic devices), to be extremely
complex, and necessitating highly
skilled labor to perform optical
inspections, soldering, functional
testing and circuit testing.
The Controller unit is manufactured
in the United States in three stages.
First, Ricoh manufactures the PCB in
the United States, including the
automatic board stuffing process using
surface mount technology (SMT),
automated optical inspection (AOI), and
manual soldering. Ricoh states that
approximately 1,243 components,
including integrated circuits, diodes,
capacitors, connectors, and other
semiconductor devices are mounted on
the PCB using both automated and
manual soldering processes. Second,
Ricoh programs the PCB with firmware
that was developed in Japan. Once the
installation of the firmware on the PCB
is complete, the Controller unit becomes
functional as the ‘‘brain’’ of the printer.
Finally, after the assembly of the PCB
and the installation of the firmware, the
PCB undergoes testing to ensure the
functionality and quality of the PCB.
The final assembly of the printers
consists of incorporating the Controller
unit and HDD into the incomplete, nonfunctional printer engines. A control
board panel is then attached to the
Controller unit and fixed. An HDD
controller board is attached to a side of
an HDD bracket. An HDD is then
mounted on the other side of the HDD
bracket and fixed. The assembled HDD
is mounted on the controller unit and
fixed with controller unit and the
control board. An interface panel and a
ground plate panel are put together. The
assembled part is inserted into the
control board panel. The assembled unit
is inserted into the rear of the
incomplete printer engine and screwed
down. The operation panel is connected
to the incomplete printer engine by a
cable and then attached to the front of
the printer engine. The AIO is then
installed to the printer engine. The
assembled printers will undergo
inspection at Ricoh’s Tustin, California
factory, which is certified as an ISO
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32425
14001 factory to conduct the inspection
procedure.
ISSUE:
What is the country of origin of the
Ricoh Aficio SP 5200DNG/SP 5210DNG
monochrome laser printers 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 is or would be a product of a
designated country or instrumentality
for the purposes of granting waivers or
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 in 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
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determinations on a case-by-case basis.
The country of origin of the item’s
components, extent of the processing
that occurs within a country, and
whether such processing renders a
product with a new name, character,
and use are primary considerations in
such cases. Additionally, factors such as
the resources expended on product
design and development, the extent and
nature of post-assembly inspection and
testing procedures, and worker skill
required during the actual
manufacturing process will be
considered when determining whether a
substantial transformation has occurred.
No one factor is determinative.
In determining whether the
combining of parts or materials
constitutes a substantial transformation,
the determinative issue is the extent of
the operations performed and whether
the parts lose their identity and become
an integral part of the new article.
Belcrest Linens v. United States, 6 Ct.
Int’l Trade 204, 573 F. Supp. 1149
(1983), aff’d, 741 F.2d 1368 (Fed. Cir.
1984). If the manufacturing or
combining process is a minor one that
leaves the identity of the imported
article intact, a substantial
transformation has not occurred.
Uniroyal, Inc. v. United States, 3 Ct. Int’l
Trade 220, 542 F. Supp. 1026 (1982).
Assembly operations that are minimal
or simple, as opposed to complex or
meaningful, generally will not result in
a substantial transformation. See C.S.D.
80–111, C.S.D. 85–25, C.S.D. 89–110,
C.S.D. 89–118, C.S.D. 90–51, and C.S.D.
90–97. In 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 court
noted that the programs were designed
by a U.S. project engineer with many
years of experience in ‘‘designing and
building hardware.’’
CBP has held in a number of cases
involving similar merchandise that
complex and meaningful operations
involving a large number of components
result in a substantial transformation. In
support of its position, Ricoh cites HQ
H018467 (Jan. 4, 2008). In HQ H018467,
CBP considered the country of origin of
multi-function printers in which
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manufacturing took place in two
countries. In that case, the following
eighteen units were manufactured in the
Philippines from components produced
in various countries: the automatic
document feeder unit, scanner unit,
operation panel unit, feed unit, manual
paper feed unit, lift up motor unit,
subassembly units, automatic document
transferring unit, induction heating
fuser unit, induction heating power
supply unit, transcription unit,
developing unit, laser scanning unit,
main drive unit, motor drive board, high
voltage power supply board, low voltage
power supply board, and automatic
duplex unit board. The units were sent
to Japan where the system control
board, engine control board, OPC drum
unit, and the toner reservoir were
manufactured and incorporated into the
units. The control boards were then
programmed in Japan with Japanese
firmware that controlled the user
interface, imaging, memories, and the
mechanics of the machines. The
machines were then inspected and
adjusted as necessary. CBP found that
the manufacturing operations in Japan
substantially transformed the Philippine
units such that Japan was the country of
origin of the multifunctional machines.
In making our determination we took
into consideration the fact that the
system control board, the engine control
board, and the firmware, which were
very important to the functionality of
the machines, were manufactured in
Japan. We also found that the operations
performed in Japan were meaningful
and complex and resulted in an article
of commerce with a new name,
character and use.
Ricoh also cites HQ H185775 (Dec. 21,
2011). In HQ H185775, CBP considered
the country of origin of a multifunction
office machine. In that case, the
incomplete print engine was produced
in Vietnam and consisted of a metal
frame, plastic skins, motors, controller
board with supplier-provided firmware,
a laser scanning system, paper trays,
cabling paper transport rollers, and
miscellaneous sensing and imaging
systems. The incomplete print engine
was shipped to Mexico, where the
following assemblies were added: the
formatter board, scanner/automatic
document feeder, control panel, fax
card, hard disk drive/solid state drive,
firmware (which was developed and
written in the U.S.), along with other
minor components and accessories. The
finished products were also tested and
prepared for shipping to their ultimate
destinations. CBP determined that
Mexico was the country of origin
because a substantial transformation of
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the various components occurred in
Mexico, and the assembly of the
materials from various countries
resulted in the final multifunctional
office machine product.
In this case, substantial
manufacturing operations are performed
in both China and Japan. Chinese
subassemblies are imported into the
United States, where they are combined
with U.S.-origin PCBs, and programmed
with Japanese-origin firmware. The
Controller unit is stated to control the
functions and mechanics of the printers
along with the Japanese firmware. As
the printers are comprised of
subassemblies and components from
various countries, but are also
comprised of a Controller unit
assembled in the United States (with
U.S.-origin PCBs), which is important to
the function of the printers, and the
assembly in the United States completes
the printers, we find that the last
substantial transformation occurs in the
United States. See HQ H198875, dated
June 5, 2012 (CBP found that Singapore
was the country of origin of multifunction peripherals assembled to
completion in Singapore, where they
were also fitted with Singaporean-origin
PCBs and programmed with Japaneseorigin application software); HQ
563012, dated May 4, 2004 (CBP found
that Hong Kong was the country of
origin of fabric switches assembled to
completion in Hong Kong, where they
were also configured and programmed
with U.S.-origin software that
transformed the switches from nonfunctional devices into fabric switches
capable of performing various Storage
Area Network related functions); HQ
H170315, scenario III, dated July 28,
2011 (application and transceiver
boards for satellite phones were
assembled in Malaysia and programmed
with U.K.-origin software in Singapore,
where the phones were also assembled.
CBP found that no one country’s
operations dominated the
manufacturing operations of the phones
and that the last substantial
transformation occurred in Singapore.)
Therefore, the country of origin of the
Ricoh Aficio SP 5200DNG/SP 5210DNG
monochrome laser printers is the United
States.
HOLDING:
The imported components that are
used to manufacture the Ricoh Aficio SP
5200DNG/SP 5210DNG monochrome
laser printers are substantially
transformed as a result of the assembly
and firmware installation operations
performed in the United States.
Therefore, we find that the country of
origin of the Ricoh Aficio SP 5200DNG/
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Federal Register / Vol. 78, No. 104 / Thursday, May 30, 2013 / Notices
Notice of Issuance of Final
Determination Concerning
Multifunctional Digital Imaging
Systems
determination concerning the country of
origin of certain multifunctional digital
imaging systems which may be offered
to the U.S. Government under an
undesignated procurement contract.
This final determination, in HQ
H240213, was issued at the request of
Ricoh Electronics, Inc. under
procedures set forth at 19 CFR part 177,
subpart B, which implements Title III of
the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511–18). In the
final determination, CBP concluded
that, based upon the facts presented, the
particular multifunctional digital
imaging systems, assembled in the
United States from parts made in China,
Japan, and the Philippines, are
substantially transformed in the United
States, such that the United States is the
country of origin of the finished article
for purposes of U.S. Government
procurement.
Section 177.29, Customs Regulations
(19 CFR 177.29), provides that notice of
final determinations shall be published
in the Federal Register within 60 days
of the date the final determination is
issued. Section 177.30, Customs
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.
U.S. Customs and Border
Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
Dated: May 21, 2013.
Glen E. Vereb,
Acting Executive Director, Regulations and
Rulings, Office of International Trade.
SP 5210DNG monochrome laser printers
for government procurement purposes is
the United States.
Notice of this final determination will
be given in the Federal Register, as
required by 19 C.F.R. § 177.29. Any
party-at-interest other than the party
which requested this final
determination may request, pursuant to
19 C.F.R. § 177.31, that CBP reexamine
the matter anew and issue a new final
determination. Pursuant to 19 C.F.R.
§ 177.30, any party-at-interest may,
within 30 days of publication of the
Federal Register Notice referenced
above, seek judicial review of this final
determination before the Court of
International Trade.
Sincerely,
Glen E. Vereb,
Acting Executive Director, Regulations and
Rulings, Office of International Trade.
[FR Doc. 2013–12819 Filed 5–29–13; 8:45 am]
BILLING CODE P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
AGENCY:
This document provides
notice that U.S. Customs and Border
Protection (‘‘CBP’’) has issued a final
determination concerning the country of
origin of certain multifunctional digital
imaging systems. Based upon the facts
presented, CBP has concluded in the
final determination that the United
States is the country of origin of the
multifunctional digital imaging systems
for purposes of U.S. Government
procurement.
SUMMARY:
The final determination was
issued on May 21, 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 on or before
July 1, 2013.
FOR FURTHER INFORMATION CONTACT:
Suzanne Kane, Valuation and Special
Programs Branch: (202) 325–0119.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on May 21, 2013,
pursuant to subpart B of part 177,
Customs Regulations (19 CFR part 177,
subpart B), CBP issued a final
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DATES:
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Attachment
HQ H240213
May 21, 2013
OT:RR:CTF:VS H240213 SEK
CATEGORY: Marking
Ms. Fusae Nara
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036–4039
RE: U.S. Government Procurement; Country
of Origin of Ricoh Aficio SP5200SG/
5210SFG/5210SRG Multifunctional
Digital Imaging Systems
Dear Ms. Nara:
This is in response to your letter, dated
March 11, 2013, requesting a final
determination on behalf of your client, Ricoh
Electronics, Inc. (Ricoh), pursuant to subpart
B of Part 177, Customs and Border Protection
(CBP) Regulations (19 CFR § 177.21 et seq.).
Under these regulations, which implement
Title III of the Trade Agreements Act of 1979
(TAA), as amended (19 U.S.C. § 2511 et seq.),
CBP issues country of origin trade 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
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Fmt 4703
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32427
U.S. Government. This final determination
concerns the country of origin of certain
multifunctional digital imaging systems
(MFPs) that Ricoh may sell to the U.S.
Government. We note that Ricoh is a partyat-interest within the meaning of 19 CFR
§ 177.22(d)(1) and is entitled to request this
final determination.
FACTS:
The products at issue in this ruling are
certain MFPs manufactured by Ricoh,
consisting of the Ricoh Aficio SP 5200SG
(base model), the SP 5210SFG (incorporating
a fax machine), and the SP 5210SRG
(incorporating a finisher unit for stacking and
stapling). All three MFP models have
monochrome copying, printing, and scanning
functions, and one model, the SP 5210SFG,
has an additional facsimile function. Ricoh
intends to import the components and
subassemblies of the MFPs from China and
the Philippines for manufacture in the U.S.
and subsequent sale to U.S. government
agencies.
Ricoh states that it developed the SP5200series MFPs in Japan, and that the entire
engineering, development, design and
artwork processes for the MFPs took place in
Japan. The project team consisted of
approximately 50 engineers, who were all
based in Japan and worked for Ricoh’s parent
company, Ricoh Company, Ltd. At the initial
stage of the MFP production process,
individual parts are assembled into various
assemblages of parts called subassemblies.
The manufacture of subassemblies takes
place in multiple countries, including the
United States, China, and the Philippines.
The subassembly units incorporated in
Ricoh’s SP5200-series include the following:
• Automatic Reverse Document Feeder
Unit (ARDF unit): the ARDF unit has a 50
sheet capacity, and its main task is to feed
paper, sheet by sheet, to the next scanning
process. The ARDF unit is assembled in
China.
• Scanning Unit: performs the task of
converting the original images into digital
signals. It is assembled in China.
• Duplex Unit: enables double-sided
copying and printing. It is assembled in
China.
• Fusing Unit: contains a fusing roller and
a pressure roller, which are both
manufactured in Korea, and a heater
manufactured in Japan. The main task of the
Fusing unit is to permanently affix the toner
on the paper by applying heat and pressure
to the toner powder. The Fusing unit is
assembled in China.
• Laser Unit: receives the image from the
Scanning unit and copies the image onto the
organic photo conductor (OPC) drum. The
Laser unit is assembled in China. The two
key components of the Laser unit, the laser
diode unit and two lenses, are manufactured
in Japan.
• All in One Unit (AIO): is assembled in
China and contains the toner powder
manufactured in Japan using a formula
developed by Ricoh Company, Ltd.
• Base Engine and Image Control unit
(BICU): controls the mechanical function of
the MFP and is, in turn, controlled by the
Controller unit. It is assembled in China.
E:\FR\FM\30MYN1.SGM
30MYN1
]]>Agencies
[Federal Register Volume 78, Number 104 (Thursday, May 30, 2013)]
[Notices]
[Pages 32424-32427]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-12819]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning Monochrome
Laser Printers
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 certain monochrome laser printers. Based upon the
facts presented, CBP has concluded in the final determination that the
United States is the country of origin of the monochrome laser printers
for purposes of U.S. Government procurement.
DATES: The final determination was issued on May 21, 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 on or before July 1, 2013.
FOR FURTHER INFORMATION CONTACT: Suzanne Kane, Valuation and Special
Programs Branch: (202) 325-0119.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on May 21, 2013,
pursuant to subpart B of part 177, Customs Regulations (19 CFR part
177, subpart B), CBP issued a final determination concerning the
country of origin of certain monochrome laser printers which may be
offered to the U.S. Government under an undesignated procurement
contract. This final determination, in HQ H241146, was issued at the
request of Ricoh Electronics, Inc. under procedures set forth at 19 CFR
part 177, subpart B, which implements Title III of the Trade Agreements
Act of 1979, as amended (19 U.S.C. 2511-18). In the final
determination, CBP concluded that, based upon the facts presented, the
particular monochrome laser printers, assembled in the United States
from parts made in China, Japan, and the Philippines, are substantially
transformed in the United States, such that the United States is the
country of origin of the finished article for purposes of U.S.
Government procurement.
Section 177.29, Customs Regulations (19 CFR 177.29), provides that
notice of final determinations shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, Customs 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: May 22, 2013.
Glen E. Vereb,
Acting Executive Director, Regulations and Rulings, Office of
International Trade.
Attachment
HQ H241146
May 21, 2013
OT:RR:CTF:VS H241146 SEK
CATEGORY: Marking
Ms. Fusae Nara
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036-4039
RE: U.S. Government Procurement; Country of Origin of Ricoh Aficio SP
5200DNG/SP 5210DNG Monochrome Laser Printers
Dear Ms. Nara:
This is in response to your letter, dated March 11, 2013,
requesting a final determination on behalf of your client, Ricoh
Electronics, Inc. (Ricoh), pursuant to subpart B of 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 (TAA), as amended (19 U.S.C. Sec. 2511 et
seq.), CBP issues country of origin trade 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 certain
monochrome laser printers that Ricoh may sell to the U.S. Government.
We note that Ricoh is a party-at-interest within the meaning of 19 CFR
Sec. 177.22(d)(1) and is entitled to request this final determination.
FACTS:
The products at issue in this ruling are certain monochrome laser
printers manufactured by Ricoh, consisting of the Ricoh Aficio SP
5200DNG and SP 5210DNG. Ricoh intends to import the components and
subassemblies of the printers from China and the Philippines for
manufacture in the U.S. and subsequent sale to U.S. government
agencies.
Ricoh states that it developed the SP52000-series printers in
Japan, and that the entire engineering, development, design and artwork
[[Page 32425]]
processes for the printers took place in Japan. The project team
consisted of approximately 40 engineers, who were all based in Japan
and worked for Ricoh's parent company, Ricoh Company, Ltd. At the
initial stage of the printers production process, individual parts are
assembled into various assemblages of parts called subassemblies. The
manufacture of subassemblies takes place in multiple countries,
including the United States, China, and the Philippines. The
subassembly units incorporated in Ricoh's printers include the
following:
Duplex Unit: enables double-sided copying and printing. It
is assembled in China.
Fusing Unit: contains a fusing roller and a pressure
roller, which are both manufactured in Korea, and a heater manufactured
in Japan. The main task of the Fusing unit is to permanently affix the
toner on the paper by applying heat and pressure to the toner powder.
The Fusing unit is assembled in China.
Laser Unit: receives the image from the Scanning unit and
copies the image onto the organic photo conductor (OPC) drum. The Laser
unit is assembled in China. The two key components of the Laser unit,
the laser diode unit and two lenses, are manufactured in Japan.
All in One Unit (AIO): is assembled in China and contains
the toner powder manufactured in Japan using a formula developed by
Ricoh Company, Ltd.
Engine Board (EGB): controls all printer engine functions
both directly and through other control boards. It is assembled in
China.
Power Supply Unit (PSU): provides the DC power to the
system and AC power to the fusing. It is assembled in China.
Hard Disk Drive (HDD): is either a standard or optional
item depending on the model type of printer. Ricoh purchases HDDs made
in the Philippines from another company.
Operation Panel: acts as the interface between the user
and printer and is assembled in China.
Ricoh states that the above subassemblies are assembled in China to
construct the incomplete and non-functional printer engine. The
incomplete engine includes the duplex unit, fusing unit, laser unit,
AIO, EGB, PSU and other paper tray and mechanical parts to move paper
throughout the printer. Ricoh asserts that the assembly of the
incomplete and non-functional printer engine does not require
sophisticated skills or expensive machinery.
The next stage of the production process is the Controller unit
subassembly. Ricoh states that in a completed printer, the Controller
unit functions as the electronic ``brain'' of the printer and controls
its functions. Ricoh states that it has invested significant amounts
for R&D in Japan to develop the Controller unit, as well as millions of
dollars in Ricoh's factory in Tustin, California for the machinery to
manufacture different types of Controller units. Ricoh considers the
manufacturing of the Controller unit, including the printed circuit
board (PCB) and programming of the firmware (the fixed internal
programs that control electronic devices), to be extremely complex, and
necessitating highly skilled labor to perform optical inspections,
soldering, functional testing and circuit testing.
The Controller unit is manufactured in the United States in three
stages. First, Ricoh manufactures the PCB in the United States,
including the automatic board stuffing process using surface mount
technology (SMT), automated optical inspection (AOI), and manual
soldering. Ricoh states that approximately 1,243 components, including
integrated circuits, diodes, capacitors, connectors, and other
semiconductor devices are mounted on the PCB using both automated and
manual soldering processes. Second, Ricoh programs the PCB with
firmware that was developed in Japan. Once the installation of the
firmware on the PCB is complete, the Controller unit becomes functional
as the ``brain'' of the printer. Finally, after the assembly of the PCB
and the installation of the firmware, the PCB undergoes testing to
ensure the functionality and quality of the PCB.
The final assembly of the printers consists of incorporating the
Controller unit and HDD into the incomplete, non-functional printer
engines. A control board panel is then attached to the Controller unit
and fixed. An HDD controller board is attached to a side of an HDD
bracket. An HDD is then mounted on the other side of the HDD bracket
and fixed. The assembled HDD is mounted on the controller unit and
fixed with controller unit and the control board. An interface panel
and a ground plate panel are put together. The assembled part is
inserted into the control board panel. The assembled unit is inserted
into the rear of the incomplete printer engine and screwed down. The
operation panel is connected to the incomplete printer engine by a
cable and then attached to the front of the printer engine. The AIO is
then installed to the printer engine. The assembled printers will
undergo inspection at Ricoh's Tustin, California factory, which is
certified as an ISO 14001 factory to conduct the inspection procedure.
ISSUE:
What is the country of origin of the Ricoh Aficio SP 5200DNG/SP
5210DNG monochrome laser printers 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 or 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 in 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
[[Page 32426]]
determinations on a case-by-case basis. The country of origin of the
item's components, extent of the processing that occurs within a
country, and whether such processing renders a product with a new name,
character, and use are primary considerations in such cases.
Additionally, factors such as the resources expended on product design
and development, the extent and nature of post-assembly inspection and
testing procedures, and worker skill required during the actual
manufacturing process will be considered when determining whether a
substantial transformation has occurred. No one factor is
determinative.
In determining whether the combining of parts or materials
constitutes a substantial transformation, the determinative issue is
the extent of the operations performed and whether the parts lose their
identity and become an integral part of the new article. Belcrest
Linens v. United States, 6 Ct. Int'l Trade 204, 573 F. Supp. 1149
(1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or
combining process is a minor one that leaves the identity of the
imported article intact, a substantial transformation has not occurred.
Uniroyal, Inc. v. United States, 3 Ct. Int'l Trade 220, 542 F. Supp.
1026 (1982). Assembly operations that are minimal or simple, as opposed
to complex or meaningful, generally will not result in a substantial
transformation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D.
89-118, C.S.D. 90-51, and C.S.D. 90-97. In 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 court noted that the programs were designed by
a U.S. project engineer with many years of experience in ``designing
and building hardware.''
CBP has held in a number of cases involving similar merchandise
that complex and meaningful operations involving a large number of
components result in a substantial transformation. In support of its
position, Ricoh cites HQ H018467 (Jan. 4, 2008). In HQ H018467, CBP
considered the country of origin of multi-function printers in which
manufacturing took place in two countries. In that case, the following
eighteen units were manufactured in the Philippines from components
produced in various countries: the automatic document feeder unit,
scanner unit, operation panel unit, feed unit, manual paper feed unit,
lift up motor unit, subassembly units, automatic document transferring
unit, induction heating fuser unit, induction heating power supply
unit, transcription unit, developing unit, laser scanning unit, main
drive unit, motor drive board, high voltage power supply board, low
voltage power supply board, and automatic duplex unit board. The units
were sent to Japan where the system control board, engine control
board, OPC drum unit, and the toner reservoir were manufactured and
incorporated into the units. The control boards were then programmed in
Japan with Japanese firmware that controlled the user interface,
imaging, memories, and the mechanics of the machines. The machines were
then inspected and adjusted as necessary. CBP found that the
manufacturing operations in Japan substantially transformed the
Philippine units such that Japan was the country of origin of the
multifunctional machines. In making our determination we took into
consideration the fact that the system control board, the engine
control board, and the firmware, which were very important to the
functionality of the machines, were manufactured in Japan. We also
found that the operations performed in Japan were meaningful and
complex and resulted in an article of commerce with a new name,
character and use.
Ricoh also cites HQ H185775 (Dec. 21, 2011). In HQ H185775, CBP
considered the country of origin of a multifunction office machine. In
that case, the incomplete print engine was produced in Vietnam and
consisted of a metal frame, plastic skins, motors, controller board
with supplier-provided firmware, a laser scanning system, paper trays,
cabling paper transport rollers, and miscellaneous sensing and imaging
systems. The incomplete print engine was shipped to Mexico, where the
following assemblies were added: the formatter board, scanner/automatic
document feeder, control panel, fax card, hard disk drive/solid state
drive, firmware (which was developed and written in the U.S.), along
with other minor components and accessories. The finished products were
also tested and prepared for shipping to their ultimate destinations.
CBP determined that Mexico was the country of origin because a
substantial transformation of the various components occurred in
Mexico, and the assembly of the materials from various countries
resulted in the final multifunctional office machine product.
In this case, substantial manufacturing operations are performed in
both China and Japan. Chinese subassemblies are imported into the
United States, where they are combined with U.S.-origin PCBs, and
programmed with Japanese-origin firmware. The Controller unit is stated
to control the functions and mechanics of the printers along with the
Japanese firmware. As the printers are comprised of subassemblies and
components from various countries, but are also comprised of a
Controller unit assembled in the United States (with U.S.-origin PCBs),
which is important to the function of the printers, and the assembly in
the United States completes the printers, we find that the last
substantial transformation occurs in the United States. See HQ H198875,
dated June 5, 2012 (CBP found that Singapore was the country of origin
of multi-function peripherals assembled to completion in Singapore,
where they were also fitted with Singaporean-origin PCBs and programmed
with Japanese-origin application software); HQ 563012, dated May 4,
2004 (CBP found that Hong Kong was the country of origin of fabric
switches assembled to completion in Hong Kong, where they were also
configured and programmed with U.S.-origin software that transformed
the switches from non-functional devices into fabric switches capable
of performing various Storage Area Network related functions); HQ
H170315, scenario III, dated July 28, 2011 (application and transceiver
boards for satellite phones were assembled in Malaysia and programmed
with U.K.-origin software in Singapore, where the phones were also
assembled. CBP found that no one country's operations dominated the
manufacturing operations of the phones and that the last substantial
transformation occurred in Singapore.) Therefore, the country of origin
of the Ricoh Aficio SP 5200DNG/SP 5210DNG monochrome laser printers is
the United States.
HOLDING:
The imported components that are used to manufacture the Ricoh
Aficio SP 5200DNG/SP 5210DNG monochrome laser printers are
substantially transformed as a result of the assembly and firmware
installation operations performed in the United States. Therefore, we
find that the country of origin of the Ricoh Aficio SP 5200DNG/
[[Page 32427]]
SP 5210DNG monochrome laser printers for government procurement
purposes is the United States.
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,
Glen E. Vereb,
Acting Executive Director, Regulations and Rulings, Office of
International Trade.
[FR Doc. 2013-12819 Filed 5-29-13; 8:45 am]
BILLING CODE P
