Notice of Issuance of Final Determination Concerning a Digital Radiography System, 31615-31618 [2017-14310]
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Name of Committee: National Institute on
Deafness and Other Communication
Disorders Special Emphasis Panel; NIDCD
Clinical Research Center Grant (P50) Review.
Date: August 2, 2017.
Time: 1:00 p.m. to 5:00 p.m.
Agenda: To review and evaluate grant
applications.
Place: National Institutes of Health
Neuroscience Center, 6001 Executive
Boulevard, Rockville, MD 20852 (Telephone
Conference Call).
Contact Person: Katherine Shim, Ph.D.,
Scientific Review Officer, Division of
Extramural Activities, NIH/NIDCD, 6001
Executive Blvd., Room 8351, Bethesda, MD
20892, 301–496–8683, katherine.shim@
nih.gov.
(Catalogue of Federal Domestic Assistance
Program Nos. 93.173, Biological Research
Related to Deafness and Communicative
Disorders, National Institutes of Health, HHS)
Dated: July 3, 2017.
David Clary,
Program Analyst, Office of Federal Advisory
Committee Policy.
[FR Doc. 2017–14296 Filed 7–6–17; 8:45 am]
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Pursuant to section 10(d) of the
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hereby given of the following meeting.
The meeting will be closed to the
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provisions set forth in sections
552b(c)(4) and 552b(c)(6), Title 5 U.S.C.,
as amended. The grant applications and
the discussions could disclose
confidential trade secrets or commercial
property such as patentable material,
and personal information concerning
individuals associated with the grant
applications, the disclosure of which
would constitute a clearly unwarranted
invasion of personal privacy.
Name of Committee: National Institute of
Allergy and Infectious Diseases Special
Emphasis Panel; Development of
Multipurpose Prevention Technologies (R61/
R33).
Date: August 3, 2017.
Time: 11:00 a.m. to 5:00 p.m.
Agenda: To review and evaluate grant
applications.
Place: National Institutes of Health, 5601
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Contact Person: Brenda Lange-Gustafson,
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Dated: June 29, 2017.
Natasha M. Copeland,
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Committee Policy.
[FR Doc. 2017–14229 Filed 7–6–17; 8:45 am]
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DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final
Determination Concerning a Digital
Radiography System
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 a digital radiography system,
(also commonly referred to as an x-ray
system), known as the Carestream DRXAscend Digital Radiography system.
Based upon the facts presented for
purposes of U.S. Government
procurement, CBP has concluded that
the United States is the country of origin
of the fully assembled and installed
DRX-Ascend Digital Radiography
system.
SUMMARY:
National Institutes of Health
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20852, 240–669–5047, bgustafson@
niaid.nih.gov.
(Catalogue of Federal Domestic Assistance
Program Nos. 93.855, Allergy, Immunology,
and Transplantation Research; 93.856,
Microbiology and Infectious Diseases
Research, National Institutes of Health, HHS)
The final determination was
issued on June 30, 2017. 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 August
7, 2017.
FOR FURTHER INFORMATION CONTACT:
Robert Dinerstein, Valuation and
Special Programs Branch, Regulations
and Rulings, Office of Trade, at (202)
325–0132.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on June 30, 2017
pursuant to subpart B of Part 177, U.S.
Customs and Border Protection
Regulations (19 CFR part 177, subpart
B), CBP issued a final determination
concerning the country of origin of a
digital radiography system known as the
Carestream DRX–Ascend Digital
Radiography system, which may be
offered to the U.S. Government under an
undesignated government procurement
DATES:
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contract. This final determination, HQ
H283088, was issued under procedures
set forth at 19 CFR Part 177, subpart B,
which implements Title III of the Trade
Agreements Act of 1979, as amended
(19 U.S.C. 2511–18). The major
components of the DRX-Ascend Digital
Radiography system include a Chineseorigin high-voltage generator, a U.S.origin wireless DRX detector, a Chineseorigin elevating float-top table, a
Chinese-origin tubestand, a Chineseorigin wall stand, and either a U.S. or
a Japanese-origin x-ray tube. These
components are combined with software
that is largely developed in the United
States. In the final determination, CBP
concluded that the components are
substantially transformed in the United
States when the fully functioning digital
radiography system is completely
assembled and installed at an on-site
location. Thus, the fully assembled
digital radiography system becomes a
product of the United States. Therefore,
for purposes of U.S. Government
procurement, the United States is the
country of origin of the installed and
assembled Carestream DRX-Ascend
Digital Radiography system.
Section 177.29, CBP Regulations (19
CFR 177.29), provides that a notice of
final determination shall be published
in the Federal Register within 60 days
of the date the final determination is
issued. Section 177.30, CBP Regulations
(19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR
177.22(d), may seek judicial review of a
final determination within 30 days of
publication of such determination in the
Federal Register.
Dated: June 30, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings,
Office of Trade.
HQ H283088
OT:RR:CTF:VS H283088 RSD
CATEGORY: Origin
Gunjan R. Talati, Esq. Kilpatrick Townsend
& Stockton 607 14th Street NW. Suite 900
Washington, DC 20005–2018
RE: U.S. Government Procurement; Title III,
Trade Agreements Act of 1979 (19 U.S.C.
2511); Subpart B, Part 177, CBP Regulations;
Digital Radiography System
Dear Mr. Talati:
This is in response to your letter of January
11, 2017, forwarded to the National
Commodity Specialist Division on behalf of
Carestream Health, Inc. (Carestream),
requesting a final determination concerning
the country of origin of a Digital Radiography
System, pursuant to subpart B of Part 177,
U.S. Customs and Border Protection (CBP)
Regulations (19 CFR 177.21, et seq.). The
National Commodity Specialist Division
transmitted your request to the Office of
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Trade, Regulations and Rulings Headquarters
for a response. Under the pertinent
regulations, which implement Title III of the
Trade Agreements Act of 1979, as amended
(19 U.S.C. 2511 et seq.), CBP issues country
of origin advisory rulings and final
determinations as to whether an article is or
would be a product of a designated country
or instrumentality for the purposes of
granting waivers of certain ‘‘Buy American’’
restrictions in U.S. law or practice for
products offered for sale to the U.S.
government.
This final determination concerns the
country of origin of a digital radiography
system, which will be assembled on-site. As
a U.S. importer, Carestream is a party-atinterest within the meaning of 19 CFR
177.22(d)(1) and is entitled to request this
final determination.
FACTS
The product at issue is a digital
radiography system known as the DRXAscend Digital system that is assembled in
the United States from U.S. and foreign
origin components. According to the
information that you have provided, the
DRX-Ascend Digital system is a digital
radiography system (also commonly known
as an x-ray system) engineered, designed, and
assembled (final assembly) in the United
States from seven major U.S. and foreignorigin components. The seven components
are (1) a diagnostic x-ray high voltage
generator; (2) wireless DRX Detector; (3) an
x-ray tube; (4) a tubestand; (5) an elevating
float-top table; (6) a wall stand; and, (7)
Carestream Health software.
The diagnostic x-ray high-voltage generator
supplies and controls the electrical energy
applied to a diagnostic x-ray tube for
medical/veterinary radiographic
examinations. The initial manufacturing of
the generator occurs in China, where Chinese
components of the generator are provided by
Chinese suppliers. The generator goes
through two hours of processing in China to
produce an unfinished generator. Carestream
imports the unfinished generators into the
United States. When it is imported, the
generator does not contain the necessary
printed circuit boards, and it also needs to be
programmed. The printed circuit boards are
stated to be manufactured in the United
States and will be programmed using
software written by a company called
Quantum Manufacturing located in New
York. Adding the boards to the generator and
programming in the United States take
roughly one hour of manufacturing time. The
generator then undergoes extensive testing
(approximately 6.5 hours) in the United
States. You maintain that this testing is
critical to the generator manufacturing
process of the DRX-Ascend Digital system
and must be completed before Carestream
delivers the system to the customer.
The wireless DRX Detector, produced in
the United States, utilizes Directview
software and facilitates diagnostic exams by
capturing the x-ray images and wirelessly
transmitting them to a capture console that
allows for immediate viewing at the capture
console and manipulation. The chief benefit
of instant image access is that it can reduce
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exam time and recall, and improves patient
satisfaction. The detector is integrated into
the DRX-Ascend Digital system by both
hardware and software and you indicate that
the detectors are made in the United States
by Carestream Health or an external supplier.
The x-ray tube converts power into x-rays
that ultimately produce the image required
for making a diagnosis. Carestream uses two
suppliers to obtain the x-ray tubes, either
from Japan or the United States.
Another component of the DRX-Ascend
Digital system is an elevating float-top table
made in China. The tubestand component of
the table is assembled in the United States
and holds three different parts. One of these
parts is the x-ray tube, and the other two
parts are an operator panel and the
collimator, all of Chinese origin. Some of the
tubestands have an overhead tube crane from
Germany. These parts are installed on-site at
the customer’s location in the United States
by a U.S. service provider. The time for
manufacturing the basic stand is
approximately six hours in China. The
tubestand is then brought into the United
States for final assembly. The final assembly
takes about two hours. The DRX-Ascend
Digital system can include a wall stand. The
wall stand is fully assembled in China.
The final element of the DRX-Ascend
Digital system is the Carestream Directview
software, which is initially programmed and
developed in the United States. While the
software build is currently performed in
China, substantial portions of the software
are still developed in the United States.
According to your submission, two percent of
the Directview software involves research
and 100 percent of that research was
performed in the United States. The
development/writing of the software
specifications and architecture involve 15
percent of the project, with 90 percent of this
work being done in the United States and 10
percent completed in China. Programming of
the source code involved 40 percent of the
creation of the software project, with 80
percent occurring in the United States and
the remaining 20 percent done in China. Two
percent of the product concerns the software
build, with 100 percent of the software build
done in China. Testing and validation
involved 40 percent of the project of the
software with 50 percent of this portion of
the software done in United States and 50
percent done in China. The final one percent
was preparing the software/burning media
for distribution, with 50 percent done in
United States and 50 percent done in China.
The Directview software is installed onto an
HP 5810 computer in China, and that
computer with the loaded software is brought
to the United States. This software has two
primary functions: (1) allowing the operator
to select the type of medical exam and
selecting the generator and x-ray tube
exposure settings (the computer then
coordinates the timing between the detector
and firing of the x-rays), and (2) the computer
and software receive the image from the
detector, process the image, and deliver the
finished image.
The final assembly, configuration and
testing of the DRX-Ascend Digital system
take place in the United States at
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Carestream’s facilities or at its customers’
sites. You describe the assembly process as
consisting of nine steps before the DRXAscend Digital system can become a
functioning x-ray system. You have provided
a copy of an installation guide, which sets
forth the step-by-step process of installing the
DRX-Ascend Digital System at a customer’s
site. The installation guide consists of over
80 pages of detailed instructions for the
installation technicians, describing how the
DRX-Ascend Digital System is assembled and
installed at an on-site location. The ancillary
parts for the system from China, including
the table, the wall stand, a tubestand and the
computer with the Directview software
loaded onto it are assembled together in the
United States. The x-ray tube and generator
are calibrated together in the United States so
that they can work together to produce an
image. The generator tube-calibration process
works by having the generator send a signal
to the tube, and the tube responds and fires
x-rays. The tube is then removed and
reinserted into the x-ray system. The
generator and the detector use the same
calibration process. Carestream integrates the
digital detector. The x-ray tube, generator,
and detector are added to the Chinese
ancillary parts. The DRX-Ascend Digital
system is then shipped to and installed at a
customer’s site. When the system is installed
at the customer’s site, all the components are
connected and powered, at which time the
DRX-Ascend Digital system becomes a
functioning radiography x-ray system.
You indicate that individuals responsible
for the on-site installation are either
Carestream employees or Carestream dealer
employees. All individuals responsible for
installation receive formal classroom training
through multiple courses at Carestream. The
first course is a four-day-long class on x-ray
fundamentals. The second course is a fiveday class on Carestream’s DRX systems. The
third course is a certification course that is
also four days and teaches the students to
become proficient in installing, calibrating,
and repairing the DRX-Ascend Digital
system.
Some of the specialized tools and
equipment that the x-ray installers use in
performing the installation include a digital
volt meter, x-ray measurement meter, mAS
meter, dose meter, high voltage insulating kit,
and ratchet hoists. You further state that it
typically takes four to five days to install the
system at a customer site depending on site
readiness, but the system is designed for
installation in four days.
ISSUE:
What is the country of origin of the DRXAscend Digital x-ray system for purposes of
U.S. government procurement?
LAW AND ANALYSIS:
Pursuant to subpart B of Part 177, 19 CFR
177.21 et seq., which implements Title III of
the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511 et seq.), CBP issues
country of origin advisory rulings and final
determinations as to whether an article is or
would be a product of a designated country
or instrumentality for the purposes of
granting waivers of certain ‘‘Buy American’’
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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 CFR 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 CFR 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 CFR
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 CFR 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. 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 Texas
Instruments v. United States, 681 F.2d 778,
782 (CCPA 1982), the court observed that the
substantial transformation issue is a ‘‘mixed
question of technology and customs law.’’
Headquarters Ruling (HQ) H203555, dated
April 23, 2012, concerned the country of
origin of certain oscilloscopes. CBP
considered five manufacturing scenarios. In
the various scenarios, the motherboard and
the power controller of either Malaysian or
Singaporean origin were assembled in
Singapore with subassemblies of Singaporean
origin into oscilloscopes. CBP found that
under the various scenarios, there were three
countries under consideration where
programming and/or assembly operations
took place, the last of which was Singapore.
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CBP noted that no one country’s operations
dominated the manufacturing operations of
the oscilloscopes. As a result, while the
boards assembled in Malaysia were
important to the function of the
oscilloscopes, and the U.S. firmware and
software were used to program the
oscilloscopes in Singapore, the final
programming and assembly of the
oscilloscopes was in Singapore; hence,
Singapore imparted the last substantial
transformation, and the country of origin of
the oscilloscopes was Singapore.
HQ H170315, dated July 28, 2011,
concerned the country of origin of satellite
telephones. CBP was asked to consider six
scenarios involving the manufacture of PCBs
in one country and the programming of the
PCBs with second country software either in
the first country or in a third country, where
the phones were assembled. In the third
scenario, the 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. See also HQ H014068,
dated October 9, 2007 (CBP determined that
a cellular phone designed in Sweden,
assembled in either China or Malaysia and
shipped to Sweden, where it was loaded with
software that enabled it to test equipment on
wireless networks, was a product of Sweden.
Once the software was installed on the
phones in Sweden, they became devices with
a new name, character and use: network
testing equipment. As a result of the
programming operations performed in
Sweden, CBP found that the country of origin
of the network testing equipment was
Sweden).
In HQ H219597, dated April 3, 2013,
ultrasound systems were engineered,
designed and subject to final assembly in the
United States from U.S. and foreign
components. CBP noted that substantial
manufacturing operations were performed in
China, the United States, Korea, and Italy.
The electronics module, which was partially
assembled in China, was imported into the
United States, where it was assembled with
other core components, including Koreanorigin transducers that sent and received
acoustic signals, an Italian-origin monitor
that displayed images, and a U.S.-origin
control panel that served as the user
interface. The completely assembled
ultrasound systems were then uploaded with
U.S. designed, developed, and written
operating system software and application
software. The information provided indicated
that the software was necessary for the
ultrasound systems to perform their intended
function of providing diagnostic information
(an observable image with related data). It
took approximately 23–24 hours to produce
the finished S2000 ultrasound system of
which 13–14 hours took place in the United
States. Approximately 24–25 hours of time
were expended to produce the finished
Antares ultrasound system of which 14–15
hours took place in the United States. In
addition, the assembly, integration, and
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testing in the United States was conducted by
specialized technicians. All of the research
and development, product engineering and
design investment occurred in the United
States. Based on the totality of the
circumstances, CBP found that the last
substantial transformation occurred in the
United States, the location where the final
assembly and installation of the operating
system software and application software
occurred. Prior to the assembly and
programming in the United States, the
products were unable to carry out the
functions of the ultrasound systems.
However, the assembly and programming in
the United States created a new product that
was capable of providing diagnostic
information. Consequently, CBP found that
the country of origin of the ultrasound
systems was the United States.
Similarly, in this case, it is noted that there
is a significant amount of U.S. assembly
involved in producing the complete x-ray
system on-site. We note that Carestream has
a detailed step-by-step instruction booklet for
the installation technicians on how to
properly install and assemble the x-ray
system. We note that there are a series of
complicated steps and operations that must
be carefully followed in assembling the
components of the x-ray system in order to
make sure that the finished installed x-ray
system works properly. In addition, we
recognize that major safety issues could arise
for future patients and operators, if the
assembly and installation of an x-ray system
is not done correctly. As such, the assembly
requires the precise fitting, assembly, and
calibration of the various components
together in making the finished x-ray system.
As previously noted, Carestream’s
technicians must undergo a series of
intensive classroom training through
multiple courses in order to obtain the
necessary skills to be able to install and
assemble the x-ray system. These technicians
also use some highly specialized and
sophisticated tools in completing the
assembly and installation of an x-ray system.
While the x-ray system is comprised of
various components mostly from China and
the United States (in some cases a Japanese
x-tube will be used), there is no one single
component, which dominates and retains its
own identity after the system is put together.
We also note that while one of the more
significant components, the system’s high
voltage generator, is of Chinese origin, it is
unfinished when imported into the United
States. The boards, which make the generator
operational, are installed and programmed in
the United States, and the finished generator
undergoes significant testing in the United
States before Carestream delivers the system
to the customer in the United States.
Furthermore, while simply installing the
U.S. developed software onto the x-ray
system alone would not be sufficient to result
in a substantial transformation of the foreign
made components, we note that according to
the information submitted, the U.S. origin
software does play an integral role in the
final product’s proper functioning. More
significantly, because a substantial assembly
operation occurs in installing the x-ray
system at the on-site location, more than just
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loading of software is involved in making the
finished x-ray systems in the United States.
Until all of the components are put together
into the completed system, it will not have
the character of an x-ray system, and the
individual components cannot carry out the
functions of an x-ray system of producing
radiographic images suitable for making a
diagnosis. We also find it highly significant
that the information provided indicates the
assembly and installation of the x-ray system
require a significant amount of time, in that
it usually takes about 4 to 5 days on-site to
complete. As in HQ H219597, after the
assembly and programming of the U.S. and
foreign made components are completed in
the United States, the foreign made
components all lose their individual
identities and connected together will create
a distinct new product, an x-ray system,
which is capable of providing radiographic
images for diagnostic purposes.
Consequently, we find that a product with a
new name, character, and use is produced by
the operations performed in the United States
to make the x-ray system, and thus the
country of origin of the DRX-Ascend Digital
x-ray system is the United States.
HOLDING:
Based on the information presented, the
imported components that are used in the
manufacture of the DRX-Ascend Digital x-ray
system are substantially transformed as a
result of the assembly operations and the
software installation performed at an on-site
location in the United States. Therefore, the
country of origin of the DRX-Ascend Digital
Radiography x-ray system for government
procurement purposes is the United States.
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 this final
determination may request, pursuant to 19
CFR 177.31, that CBP reexamine the matter
anew and issue a new final determination.
Pursuant to 19 CFR 177.30, any party-atinterest 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,
Alice A. Kipel,
Executive Director, Regulations and Rulings,
Office of Trade
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DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5999–N–01]
60-Day Notice of Proposed Information
Collection: Comment Request;
Housing Discrimination Information
Form; HUD–903.1, HUD–903.1A, HUD–
903.1B, HUD–903.1C, HUD–903.1F,
HUD–903.1CAM, HUD–903.1KOR,
HUD–903.1RUS, HUD–903–1_Somali
number). Hearing or speech impaired
individuals may access this number via
TTY by calling the toll-free Federal
Relay Service at: 1 (800) 877–8339.
HUD is
submitting this proposed extension of a
currently approved information
collection to the OMB for review, as
required by the Paperwork Reduction
Act of 1995 [44 U.S.C. Chapter 35, as
amended].
AGENCY: Office of the Assistant
This Notice is soliciting comments
Secretary for Fair Housing and Equal
from members of the public and affected
Opportunity, HUD.
agencies concerning the proposed
extension of the collection of
ACTION: Notice.
information regarding alleged
SUMMARY: The proposed extension of the discriminatory housing practices under
currently approved information
the Fair Housing Act [42 U.S.C. 3601 et
collection for Housing Discrimination
seq.]. The Fair Housing Act prohibits
Information Form HUD–903.1, HUD–
discrimination in the sale, rental,
903.1A, HUD–903.1B, HUD–903.1C,
occupancy, advertising, and insuring of
HUD–903.1F, HUD–903.1CAM, HUD–
residential dwellings; and in residential
903.1KOR, HUD–903.1RUS, and HUD–
real estate-related transactions; and in
903–1_Somali will be submitted to the
the provision of brokerage services,
Office of Management and Budget
based on race, color, religion, sex,
(OMB) for review, in accordance with
handicap [disability], familial status, or
the Paperwork Reduction Act of 1995.
national origin.
HUD is soliciting comments from all
Any person who claims to have been
interested parties on the proposed
extension of this information collection. injured by a discriminatory housing
practice, or who believes that he or she
DATES: Comment Due Date: September
will be injured by a discriminatory
5, 2017.
housing practice that is about to occur,
ADDRESSES: Interested persons are
may file a complaint with HUD not later
invited to submit comments regarding
than one year after the alleged
this proposed information collection.
discriminatory housing practice
Comments should refer to the proposal
occurred or terminated. HUD has
by name and/or OMB Control Number,
designed Housing Discrimination
and should be sent to Inez C. Downs,
Information Form HUD–903.1 to
Departmental Paperwork Reduction Act promote consistency in the documents
Officer, QMAC, U.S. Department of
that, by statute, must be provided to
Housing and Urban Development, 451
persons against whom complaints are
7th Street SW., Room 4186, Washington, filed, and for the convenience of the
DC 20410–2000; telephone number
general public. Section 103.25 of HUD’s
(202) 402–8046 (this is not a toll-free
Fair Housing Act regulation describes
number), or email at Inez.C.Downs@
the information that must be included
hud.gov for a copy of the proposed
in each complaint filed with HUD. For
forms or other available information; or
purposes of meeting the Act’s one-year
to Colette Pollard, Departmental
time limitation for filing complaints
Paperwork Reduction Officer, QMAC,
with HUD, complaints need not be
U.S. Department of Housing and Urban
initially submitted on the Form that
Development, 451 7th Street SW., Room HUD provides. Housing Discrimination
4186, Washington, DC 20410–2000;
Information Form HUD–903.1 (English
telephone number (202) 402–3400 (this
language), HUD–903.1A (Spanish
is not a toll-free number), or email at
language), HUD–903.1B (Chinese
Colette.Pollard@hud.gov for a copy of
language), HUD–903.1C (Arabic
the proposed forms or other available
language), HUD–903.1F (Vietnamese
information. Hearing or speech
language), HUD–903.1CAM (Cambodian
impaired individuals may access both
language), HUD–903.1KOR (Korean
numbers via TTY by calling the toll-free language), HUD–903.1RUS (Russian
Federal Relay Service at: 1 (800) 877–
language), and HUD–903–1_(Somali
8339.
language) may be submitted to HUD by
mail, in person, by facsimile, by email,
FOR FURTHER INFORMATION CONTACT:
or via the Internet to HUD’s Office of
Turner Russell, Department of Housing
Fair Housing and Equal Opportunity
and Urban Development, 451 7th Street
(FHEO). FHEO staff uses the
SW., Room 5214, Washington, DC
information provided on the Form to
20410–2000; telephone number (202)
verify HUD’s authority to investigate the
402–6995 (this is not a toll-free
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
SUPPLEMENTARY INFORMATION:
E:\FR\FM\07JYN1.SGM
07JYN1
Agencies
[Federal Register Volume 82, Number 129 (Friday, July 7, 2017)]
[Notices]
[Pages 31615-31618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14310]
=======================================================================
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning a Digital
Radiography System
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 a digital radiography system, (also commonly
referred to as an x-ray system), known as the Carestream DRX-Ascend
Digital Radiography system. Based upon the facts presented for purposes
of U.S. Government procurement, CBP has concluded that the United
States is the country of origin of the fully assembled and installed
DRX-Ascend Digital Radiography system.
DATES: The final determination was issued on June 30, 2017. 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 August 7, 2017.
FOR FURTHER INFORMATION CONTACT: Robert Dinerstein, Valuation and
Special Programs Branch, Regulations and Rulings, Office of Trade, at
(202) 325-0132.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 30, 2017
pursuant to subpart B of Part 177, U.S. Customs and Border Protection
Regulations (19 CFR part 177, subpart B), CBP issued a final
determination concerning the country of origin of a digital radiography
system known as the Carestream DRX-Ascend Digital Radiography system,
which may be offered to the U.S. Government under an undesignated
government procurement contract. This final determination, HQ H283088,
was issued under procedures set forth at 19 CFR Part 177, subpart B,
which implements Title III of the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511-18). The major components of the DRX-Ascend
Digital Radiography system include a Chinese-origin high-voltage
generator, a U.S.-origin wireless DRX detector, a Chinese-origin
elevating float-top table, a Chinese-origin tubestand, a Chinese-origin
wall stand, and either a U.S. or a Japanese-origin x-ray tube. These
components are combined with software that is largely developed in the
United States. In the final determination, CBP concluded that the
components are substantially transformed in the United States when the
fully functioning digital radiography system is completely assembled
and installed at an on-site location. Thus, the fully assembled digital
radiography system becomes a product of the United States. Therefore,
for purposes of U.S. Government procurement, the United States is the
country of origin of the installed and assembled Carestream DRX-Ascend
Digital Radiography system.
Section 177.29, CBP Regulations (19 CFR 177.29), provides that a
notice of final determination shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial
review of a final determination within 30 days of publication of such
determination in the Federal Register.
Dated: June 30, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H283088
OT:RR:CTF:VS H283088 RSD
CATEGORY: Origin
Gunjan R. Talati, Esq. Kilpatrick Townsend & Stockton 607 14th
Street NW. Suite 900 Washington, DC 20005-2018
RE: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Digital
Radiography System
Dear Mr. Talati:
This is in response to your letter of January 11, 2017,
forwarded to the National Commodity Specialist Division on behalf of
Carestream Health, Inc. (Carestream), requesting a final
determination concerning the country of origin of a Digital
Radiography System, pursuant to subpart B of Part 177, U.S. Customs
and Border Protection (CBP) Regulations (19 CFR 177.21, et seq.).
The National Commodity Specialist Division transmitted your request
to the Office of
[[Page 31616]]
Trade, Regulations and Rulings Headquarters for a response. Under
the pertinent regulations, which implement Title III of the Trade
Agreements Act of 1979, as amended (19 U.S.C. 2511 et seq.), CBP
issues country of origin advisory rulings and final determinations
as to whether an article is or would be a product of a designated
country or instrumentality for the purposes of granting waivers of
certain ``Buy American'' restrictions in U.S. law or practice for
products offered for sale to the U.S. government.
This final determination concerns the country of origin of a
digital radiography system, which will be assembled on-site. As a
U.S. importer, Carestream 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 product at issue is a digital radiography system known as
the DRX-Ascend Digital system that is assembled in the United States
from U.S. and foreign origin components. According to the
information that you have provided, the DRX-Ascend Digital system is
a digital radiography system (also commonly known as an x-ray
system) engineered, designed, and assembled (final assembly) in the
United States from seven major U.S. and foreign-origin components.
The seven components are (1) a diagnostic x-ray high voltage
generator; (2) wireless DRX Detector; (3) an x-ray tube; (4) a
tubestand; (5) an elevating float-top table; (6) a wall stand; and,
(7) Carestream Health software.
The diagnostic x-ray high-voltage generator supplies and
controls the electrical energy applied to a diagnostic x-ray tube
for medical/veterinary radiographic examinations. The initial
manufacturing of the generator occurs in China, where Chinese
components of the generator are provided by Chinese suppliers. The
generator goes through two hours of processing in China to produce
an unfinished generator. Carestream imports the unfinished
generators into the United States. When it is imported, the
generator does not contain the necessary printed circuit boards, and
it also needs to be programmed. The printed circuit boards are
stated to be manufactured in the United States and will be
programmed using software written by a company called Quantum
Manufacturing located in New York. Adding the boards to the
generator and programming in the United States take roughly one hour
of manufacturing time. The generator then undergoes extensive
testing (approximately 6.5 hours) in the United States. You maintain
that this testing is critical to the generator manufacturing process
of the DRX-Ascend Digital system and must be completed before
Carestream delivers the system to the customer.
The wireless DRX Detector, produced in the United States,
utilizes Directview software and facilitates diagnostic exams by
capturing the x-ray images and wirelessly transmitting them to a
capture console that allows for immediate viewing at the capture
console and manipulation. The chief benefit of instant image access
is that it can reduce exam time and recall, and improves patient
satisfaction. The detector is integrated into the DRX-Ascend Digital
system by both hardware and software and you indicate that the
detectors are made in the United States by Carestream Health or an
external supplier.
The x-ray tube converts power into x-rays that ultimately
produce the image required for making a diagnosis. Carestream uses
two suppliers to obtain the x-ray tubes, either from Japan or the
United States.
Another component of the DRX-Ascend Digital system is an
elevating float-top table made in China. The tubestand component of
the table is assembled in the United States and holds three
different parts. One of these parts is the x-ray tube, and the other
two parts are an operator panel and the collimator, all of Chinese
origin. Some of the tubestands have an overhead tube crane from
Germany. These parts are installed on-site at the customer's
location in the United States by a U.S. service provider. The time
for manufacturing the basic stand is approximately six hours in
China. The tubestand is then brought into the United States for
final assembly. The final assembly takes about two hours. The DRX-
Ascend Digital system can include a wall stand. The wall stand is
fully assembled in China.
The final element of the DRX-Ascend Digital system is the
Carestream Directview software, which is initially programmed and
developed in the United States. While the software build is
currently performed in China, substantial portions of the software
are still developed in the United States. According to your
submission, two percent of the Directview software involves research
and 100 percent of that research was performed in the United States.
The development/writing of the software specifications and
architecture involve 15 percent of the project, with 90 percent of
this work being done in the United States and 10 percent completed
in China. Programming of the source code involved 40 percent of the
creation of the software project, with 80 percent occurring in the
United States and the remaining 20 percent done in China. Two
percent of the product concerns the software build, with 100 percent
of the software build done in China. Testing and validation involved
40 percent of the project of the software with 50 percent of this
portion of the software done in United States and 50 percent done in
China. The final one percent was preparing the software/burning
media for distribution, with 50 percent done in United States and 50
percent done in China. The Directview software is installed onto an
HP 5810 computer in China, and that computer with the loaded
software is brought to the United States. This software has two
primary functions: (1) allowing the operator to select the type of
medical exam and selecting the generator and x-ray tube exposure
settings (the computer then coordinates the timing between the
detector and firing of the x-rays), and (2) the computer and
software receive the image from the detector, process the image, and
deliver the finished image.
The final assembly, configuration and testing of the DRX-Ascend
Digital system take place in the United States at Carestream's
facilities or at its customers' sites. You describe the assembly
process as consisting of nine steps before the DRX-Ascend Digital
system can become a functioning x-ray system. You have provided a
copy of an installation guide, which sets forth the step-by-step
process of installing the DRX-Ascend Digital System at a customer's
site. The installation guide consists of over 80 pages of detailed
instructions for the installation technicians, describing how the
DRX-Ascend Digital System is assembled and installed at an on-site
location. The ancillary parts for the system from China, including
the table, the wall stand, a tubestand and the computer with the
Directview software loaded onto it are assembled together in the
United States. The x-ray tube and generator are calibrated together
in the United States so that they can work together to produce an
image. The generator tube-calibration process works by having the
generator send a signal to the tube, and the tube responds and fires
x-rays. The tube is then removed and reinserted into the x-ray
system. The generator and the detector use the same calibration
process. Carestream integrates the digital detector. The x-ray tube,
generator, and detector are added to the Chinese ancillary parts.
The DRX-Ascend Digital system is then shipped to and installed at a
customer's site. When the system is installed at the customer's
site, all the components are connected and powered, at which time
the DRX-Ascend Digital system becomes a functioning radiography x-
ray system.
You indicate that individuals responsible for the on-site
installation are either Carestream employees or Carestream dealer
employees. All individuals responsible for installation receive
formal classroom training through multiple courses at Carestream.
The first course is a four-day-long class on x-ray fundamentals. The
second course is a five-day class on Carestream's DRX systems. The
third course is a certification course that is also four days and
teaches the students to become proficient in installing,
calibrating, and repairing the DRX-Ascend Digital system.
Some of the specialized tools and equipment that the x-ray
installers use in performing the installation include a digital volt
meter, x-ray measurement meter, mAS meter, dose meter, high voltage
insulating kit, and ratchet hoists. You further state that it
typically takes four to five days to install the system at a
customer site depending on site readiness, but the system is
designed for installation in four days.
ISSUE:
What is the country of origin of the DRX-Ascend Digital x-ray
system for purposes of U.S. government procurement?
LAW AND ANALYSIS:
Pursuant to subpart B of Part 177, 19 CFR 177.21 et seq., which
implements Title III of the Trade Agreements Act of 1979, as amended
(19 U.S.C. 2511 et seq.), CBP issues country of origin advisory
rulings and final determinations as to whether an article is or
would be a product of a designated country or instrumentality for
the purposes of granting waivers of certain ``Buy American''
[[Page 31617]]
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 CFR 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 CFR 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 CFR 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 CFR 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. 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 Texas Instruments
v. United States, 681 F.2d 778, 782 (CCPA 1982), the court observed
that the substantial transformation issue is a ``mixed question of
technology and customs law.''
Headquarters Ruling (HQ) H203555, dated April 23, 2012,
concerned the country of origin of certain oscilloscopes. CBP
considered five manufacturing scenarios. In the various scenarios,
the motherboard and the power controller of either Malaysian or
Singaporean origin were assembled in Singapore with subassemblies of
Singaporean origin into oscilloscopes. CBP found that under the
various scenarios, there were three countries under consideration
where programming and/or assembly operations took place, the last of
which was Singapore. CBP noted that no one country's operations
dominated the manufacturing operations of the oscilloscopes. As a
result, while the boards assembled in Malaysia were important to the
function of the oscilloscopes, and the U.S. firmware and software
were used to program the oscilloscopes in Singapore, the final
programming and assembly of the oscilloscopes was in Singapore;
hence, Singapore imparted the last substantial transformation, and
the country of origin of the oscilloscopes was Singapore.
HQ H170315, dated July 28, 2011, concerned the country of origin
of satellite telephones. CBP was asked to consider six scenarios
involving the manufacture of PCBs in one country and the programming
of the PCBs with second country software either in the first country
or in a third country, where the phones were assembled. In the third
scenario, the 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. See also HQ H014068, dated
October 9, 2007 (CBP determined that a cellular phone designed in
Sweden, assembled in either China or Malaysia and shipped to Sweden,
where it was loaded with software that enabled it to test equipment
on wireless networks, was a product of Sweden. Once the software was
installed on the phones in Sweden, they became devices with a new
name, character and use: network testing equipment. As a result of
the programming operations performed in Sweden, CBP found that the
country of origin of the network testing equipment was Sweden).
In HQ H219597, dated April 3, 2013, ultrasound systems were
engineered, designed and subject to final assembly in the United
States from U.S. and foreign components. CBP noted that substantial
manufacturing operations were performed in China, the United States,
Korea, and Italy. The electronics module, which was partially
assembled in China, was imported into the United States, where it
was assembled with other core components, including Korean-origin
transducers that sent and received acoustic signals, an Italian-
origin monitor that displayed images, and a U.S.-origin control
panel that served as the user interface. The completely assembled
ultrasound systems were then uploaded with U.S. designed, developed,
and written operating system software and application software. The
information provided indicated that the software was necessary for
the ultrasound systems to perform their intended function of
providing diagnostic information (an observable image with related
data). It took approximately 23-24 hours to produce the finished
S2000 ultrasound system of which 13-14 hours took place in the
United States. Approximately 24-25 hours of time were expended to
produce the finished Antares ultrasound system of which 14-15 hours
took place in the United States. In addition, the assembly,
integration, and testing in the United States was conducted by
specialized technicians. All of the research and development,
product engineering and design investment occurred in the United
States. Based on the totality of the circumstances, CBP found that
the last substantial transformation occurred in the United States,
the location where the final assembly and installation of the
operating system software and application software occurred. Prior
to the assembly and programming in the United States, the products
were unable to carry out the functions of the ultrasound systems.
However, the assembly and programming in the United States created a
new product that was capable of providing diagnostic information.
Consequently, CBP found that the country of origin of the ultrasound
systems was the United States.
Similarly, in this case, it is noted that there is a significant
amount of U.S. assembly involved in producing the complete x-ray
system on-site. We note that Carestream has a detailed step-by-step
instruction booklet for the installation technicians on how to
properly install and assemble the x-ray system. We note that there
are a series of complicated steps and operations that must be
carefully followed in assembling the components of the x-ray system
in order to make sure that the finished installed x-ray system works
properly. In addition, we recognize that major safety issues could
arise for future patients and operators, if the assembly and
installation of an x-ray system is not done correctly. As such, the
assembly requires the precise fitting, assembly, and calibration of
the various components together in making the finished x-ray system.
As previously noted, Carestream's technicians must undergo a series
of intensive classroom training through multiple courses in order to
obtain the necessary skills to be able to install and assemble the
x-ray system. These technicians also use some highly specialized and
sophisticated tools in completing the assembly and installation of
an x-ray system.
While the x-ray system is comprised of various components mostly
from China and the United States (in some cases a Japanese x-tube
will be used), there is no one single component, which dominates and
retains its own identity after the system is put together. We also
note that while one of the more significant components, the system's
high voltage generator, is of Chinese origin, it is unfinished when
imported into the United States. The boards, which make the
generator operational, are installed and programmed in the United
States, and the finished generator undergoes significant testing in
the United States before Carestream delivers the system to the
customer in the United States.
Furthermore, while simply installing the U.S. developed software
onto the x-ray system alone would not be sufficient to result in a
substantial transformation of the foreign made components, we note
that according to the information submitted, the U.S. origin
software does play an integral role in the final product's proper
functioning. More significantly, because a substantial assembly
operation occurs in installing the x-ray system at the on-site
location, more than just
[[Page 31618]]
loading of software is involved in making the finished x-ray systems
in the United States. Until all of the components are put together
into the completed system, it will not have the character of an x-
ray system, and the individual components cannot carry out the
functions of an x-ray system of producing radiographic images
suitable for making a diagnosis. We also find it highly significant
that the information provided indicates the assembly and
installation of the x-ray system require a significant amount of
time, in that it usually takes about 4 to 5 days on-site to
complete. As in HQ H219597, after the assembly and programming of
the U.S. and foreign made components are completed in the United
States, the foreign made components all lose their individual
identities and connected together will create a distinct new
product, an x-ray system, which is capable of providing radiographic
images for diagnostic purposes. Consequently, we find that a product
with a new name, character, and use is produced by the operations
performed in the United States to make the x-ray system, and thus
the country of origin of the DRX-Ascend Digital x-ray system is the
United States.
HOLDING:
Based on the information presented, the imported components that
are used in the manufacture of the DRX-Ascend Digital x-ray system
are substantially transformed as a result of the assembly operations
and the software installation performed at an on-site location in
the United States. Therefore, the country of origin of the DRX-
Ascend Digital Radiography x-ray system for government procurement
purposes is the United States.
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 this final determination may request,
pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and
issue a new final determination. Pursuant to 19 CFR 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,
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade
[FR Doc. 2017-14310 Filed 7-6-17; 8:45 am]
BILLING CODE P