Notice of Issuance of Final Determination Concerning Certain Monochrome Laser Printers and Replacement Toner Cartridges, 12803-12806 [2018-05964]
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[FR Doc. 2018–05944 Filed 3–22–18; 8:45 am]
BILLING CODE 9110–04–P
DEPARTMENT OF HOMELAND
SECURITY
Customs and Border Protection
Notice of Issuance of Final
Determination Concerning Certain
Monochrome Laser Printers and
Replacement Toner Cartridges
Dated: March 19, 2018.
Alice A. Kipel,
Executive Director, Regulations and Rulings,
Office of Trade.
U.S. Customs and Border
Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
amozie on DSK30RV082PROD with NOTICES
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 and replacement toner
cartridges. Based upon the facts
SUMMARY:
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presented, CBP has concluded that the
country of origin of the monochrome
laser printers and replacement toner
cartridges in question is Japan, for
purposes of U.S. Government
procurement.
DATES: The final determination was
issued on March 19, 2018. 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 April 23,
2018.
FOR FURTHER INFORMATION CONTACT:
Yuliya A. Gulis, Valuation and Special
Programs Branch, Regulations and
Rulings, Office of Trade, at (202) 325–
0042.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that on March 19, 2018
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
certain monochrome laser printers and
replacement toner cartridges, which
may be offered to the U.S. Government
under an undesignated government
procurement contract. This final
determination, HQ H287548, was issued
under procedures set forth at 19 CFR
part 177, subpart B, which implements
Title III of the Trade Agreements Act of
1979, as amended (19 U.S.C. §§ 2511–
18). In the final determination, CBP
concluded that the country of origin of
the monochrome laser printers is Japan
for purposes of U.S. Government
procurement. CBP also determined that
the country of origin of replacement
toner cartridges is Japan for purposes of
U.S. Government procurement.
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.
HQ H287548
March 19, 2018
OT:RR:CTF:VS H287548 YAG
CATEGORY: Origin
Mr. Stanley R. Soya
Baker Botts LLP
The Warner
1299 Pennsylvania Avenue, NW
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Washington, D.C. 20004–2400
RE: U.S. Government Procurement; Country
of Origin of Monochrome Laser Printers
and Replacement Toner Cartridges; Title
III, Trade Agreements Act of 1979 (19
U.S.C. § 2511 et seq.); Subpart B, Part
177, CBP Regulations
Dear Mr. Soya:
This is in response to your
correspondence, dated June 14, 2017,
requesting a final determination, pursuant to
subpart B of Part 177 of the U.S. Customs and
Border Protection (‘‘CBP’’) Regulations (19
C.F.R. § 177.21 et seq.), on behalf of your
clients, Brother Industries (U.S.A.) (‘‘BIUS’’)
and Brother International Corporation
(‘‘BIC’’) (collectively ‘‘Brother’’), concerning
the country of origin of monochrome laser
printers and replacement toner cartridges.
We note that BIUS and BIC are parties-atinterest within the meaning of 19 C.F.R.
§ 177.22(d)(1) and are entitled to request this
final determination.
FACTS:
Monochrome Laser Printers:
Brother plans to manufacture two new
printer models in the United States: (1) the
HL–L6400DWG, a printer, and (2) the MFC–
L6900DWG, a multifunctional printer/
scanner/copier/fax (collectively
‘‘monochrome laser printers’’). These
monochrome laser printers will be comprised
of approximately 1,100 parts and
components from several countries,
including Japan, the Philippines, China, and
Vietnam. The printers are comprised of 8
main subassemblies, as follows:
(1) Main printed circuit board (‘‘PCB’’)
assembly or motherboard of the machine: It
will communicate with the PC, house the
memory in the printer, and form the image
printed on the page. The main component of
the main PCB will be the Application
Specific Integrated Circuit (‘‘ASIC’’), which
includes the Central Processor Unit (‘‘CPU’’)
and other functional circuits, including the
mechanical control circuit, USB
communication control circuit, printing data
processing circuit, and memory control
circuit. Most of the digital processing
functions of the main PCB will be processed
by the ASIC. The overall ASIC structure and
each functional circuit will be designed in
Japan and manufactured by third-party
suppliers in Japan. The other main
components of the main PCB, which include
the random-access memory (‘‘RAM’’), readonly memory (‘‘ROM’’), electrically erasable
programmable read-only memory
(‘‘EEPROM’’), and printed circuit board, will
be produced in various other countries. The
components of the main PCB assembly will
be assembled in Japan.
(2) Firmware: The firmware will be
software embedded in the main PCB of the
machines to provide the control program for
the device. The overall design and most steps
in the development of the firmware will be
performed in Japan.
(3) Fuser unit: The fuser unit will apply
pressure and heat to the printed page to
enable toner to permanently melt onto it. The
main components of the fuser unit, including
a pressure roller, halogen lamp, thermistor
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sensor, drive gear, upper case, and lower
case, will be produced in various countries.
The components of the fuser unit will be
assembled in Vietnam.
(4) Automatic Document Feeder (‘‘ADF’’)
unit: The ADF unit takes up to 80 pages and
feeds them one page at a time into the
scanner, allowing for the copying, printing or
faxing of multi-page documents without
requiring the user to manually replace each
page. This subassembly will be available for
the MFC–L6900DWG. The main components
of the ADF unit, including ADF cover,
document cover, and document separate
roller will be produced in various countries,
and assembled in Vietnam.
(5) Organic Photo Conductor (‘‘OPC’’)
drum unit: The OPC drum unit is an
aluminum cylinder that attracts toner using
an electrostatic charge that is transferred to
paper to create a printed image. The main
components of the OPC drum unit, including
the OPC drum, corona wire, drive gear, and
case, will be produced in various countries,
and assembled in Vietnam.
(6) Toner cartridge: The toner cartridge will
hold the toner that is transferred to an
electrostatically charged OPC drum. The
main component of the toner cartridge, the
toner powder, will be produced in Japan. All
other components of the toner cartridge,
including the developer roller, agitator,
supply roller, drive gear, and cases, are
produced in various countries. The
components of the toner cartridge will be
assembled in Vietnam.
(7) Operation panel unit: The operation
panel unit controls printer functions and
communicates information about the printer
and print jobs. The main components of the
operation panel unit, including the LCD
assembly, which displays the machine status
and menu, the LCD control board, touch
sensor, key switch, and panel cover, will be
produced in various countries, and will be
assembled in Vietnam.
(8) Body unit: The body unit consists of
various components, such as the cover and
frame, paper tray, high-voltage and lowvoltage power supply boards, paper feeder,
laser unit, flatbed document scanner, and
modem board. These components will come
from various countries, and will be
assembled in Vietnam.
It is claimed that the main PCB assembly and
the firmware represent the ‘‘brains’’ of the
printer. Further, it is claimed that the
Vietnamese subassembly production of the
fuser unit, ADF unit, OPC drum unit, toner
cartridge, and body unit, as described above,
does not require sophisticated skills or
expensive machinery. The subassemblies
will be generally assembled in Vietnam by
using jigs and an electric screwdriver to
connect the individual parts of each unit
together.
The final manufacturing operations of the
monochrome laser printers will take place in
the United States, and will take
approximately 40 minutes to complete (this
timeframe includes testing of the final
product). The manufacturing process for two
models of the monochrome laser printers
slightly differs in steps, but in both cases, the
process involves threading brittle wires
through spaces into necessary ports to
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connect various subassemblies, which
requires a degree of precision to ensure that
cables and connectors are not damaged or
improperly connected. Counsel provided a
step-by-step description of the finished
printer assembly. Counsel also highlighted
the complexity of the process by indicating
the fact that, if inserted incorrectly, the
cables (which are thin strips of conductive
aluminum, coated in a thin layer of
insulating material) can break and cause the
printer to malfunction throughout its
lifecycle. Moreover, there are several cables
that, if damaged during the assembly, will
require replacement of the entire
subassembly upon which the cable is
soldered. The main PCB assembly and the
firmware, though produced in Japan, will be
integrated into the printers in the United
States.
Once assembly is completed, both printer
models will undergo testing and inspection,
which is customized by Brother in Japan to
ensure optimal functionality of each printer.
Testing and inspection includes not only
running Brother’s proprietary inspection
system, but also a manual inspection of
components and overall functioning of the
product. These steps will include verifying
and installing the firmware to the main PCB
assembly and calibrating the position of the
laser beam’s exposure starting point.
Finally, counsel emphasizes that Brother
employees responsible for assembling,
inspecting and testing the printers in the
United States will be required to undergo
approximately two weeks of customized
training.
Replacement toner cartridges:
Brother also plans to sell new replacement
toner cartridges to the U.S. Government as a
separate consumable end-product. The toner
cartridges can be used interchangeably in
both the model HL-L6400DWG, printer; and
the model MFC-L6900DWG, printer/scanner/
copier/fax. The cartridges will be mainly
comprised of the following parts: (1) toner
powder; (2) supply rollers; (3) developer
roller; (4) toner uniform blade; and, (5)
cleaning unit. Counsel maintains that the
toner powder is the most critical component
of the cartridge, as it is a complex powder
that allows the printers to form an image on
paper. Brother’s toner powder will be
developed and manufactured in Japan at a
toner manufacturer’s facility. The toner
powder will account for approximately 40%
of the total parts and cost of the toner
cartridges. The finished cartridge will be
made of 29 parts from Japan, Vietnam, China,
Philippines, Malaysia, and Indonesia. All
these components will be brought together by
the manufacturing process in Japan to build
the replacement cartridges. The most
expensive parts of the cartridge include: (1)
the toner powder, which is manufactured in
Japan; (2) the developer roller, which will be
manufactured in Japan and the Philippines;
and, (3) the supply roller and the blade,
which will be manufactured in China.
Counsel claims that the country of origin of
Brother replacement toner cartridges is Japan.
ISSUE:
What is the country of origin of the
monochrome laser printers and replacement
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toner cartridges for purposes of U.S.
Government procurement?
LAW AND ANALYSIS:
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, 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 (‘‘TAA’’), as amended (19 U.S.C.
§ 2511 et seq.).
Under the rule of origin set forth under 19
U.S.C. § 2518(4)(B):
An article is a product of a country or
instrumentality only if (i) it is wholly the
growth, product, or manufacture of that
country or instrumentality, or (ii) in the case
of an article which consists in whole or in
part of materials from another country or
instrumentality, it has been substantially
transformed into a new and different article
of commerce with a name, character, or use
distinct from that of the article or articles
from which it was so transformed.
See also 19 C.F.R. § 177.22(a).
In rendering final determinations for
purposes of U.S. Government procurement,
CBP applies the provisions of subpart B of
Part 177 consistent with the Federal
Procurement 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 Trade
Agreements Act. 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.’’ See 48 C.F.R. § 25.003.
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 C.I.T. 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 C.I.T. 220,
542 F. Supp. 1026 (1982).
In Energizer Battery, Inc. v. United States,
190 F. Supp. 3d 1308 (2016), the Court of
International Trade (‘‘CIT’’) interpreted the
meaning of ‘‘substantial transformation’’ as
used in the TAA for purposes of government
procurement. Energizer involved the
determination of the country of origin of a
flashlight, referred to as the Generation II
flashlight, under the TAA. All of the
components of the Generation II flashlight
were of Chinese origin, except for a white
LED and a hydrogen getter. The components
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were imported into the United States where
they were assembled into the finished
Generation II flashlight.
The court reviewed the ‘‘name, character
and use’’ test utilized in determining whether
a substantial transformation has occurred and
noted, citing Uniroyal, Inc. v. United States,
3 C.I.T. at 226, 542 F. Supp. at 1031, aff’d,
702 F.2d 1022 (Fed. Cir. 1983), that when
‘‘the post-importation processing consists of
assembly, courts have been reluctant to find
a change in character, particularly when the
imported articles do not undergo a physical
change.’’ Energizer at 1318. In addition, the
court noted that ‘‘when the end-use was predetermined at the time of importation, courts
have generally not found a change in use.’’
Energizer at 1319, citing as an example,
National Hand Tool Corp. v. United States,
16 C.I.T. 308, 310, aff’d, 989 F.2d 1201 (Fed.
Cir. 1993). Furthermore, courts have
considered the nature of the assembly, i.e.,
whether it is a simple assembly or more
complex, such that individual parts lose their
separate identities and become integral parts
of a new article.
In reaching its decision in Energizer, the
court expressed the question as one of
whether the imported components retained
their names after they were assembled into
the finished Generation II flashlights. The
court found ‘‘[t]he constitutive components
of the Generation II flashlight do not lose
their individual names as a result [of] the
post-importation assembly.’’ The court also
found that the components had a predetermined end-use as parts and components
of a Generation II flashlight at the time of
importation and did not undergo a change in
use due to the post-importation assembly
process. Finally, the court did not find the
assembly process to be sufficiently complex
as to constitute a substantial transformation.
Thus, the court found that Energizer’s
imported components did not undergo a
change in name, character, or use as a result
of the post-importation assembly of the
components into a finished Generation II
flashlight. Virtually all of the components of
the military Generation II flashlight,
including the most important component, the
LED, were of Chinese origin. Thus, the court
determined that China was the correct
country of origin of the finished Generation
II flashlights under the government
procurement provisions of the TAA.
Monochrome Laser Printers:
In this case, counsel argues that the
country of origin of the monochrome laser
printers at issue will be the United States
because the printers will be assembled in a
process that involves: (1) complex postimportation assembly operations; (2) the
installation of the main PCB assembly and a
firmware verification and download; and, (3)
a customized testing and inspection process.
In support of its position, counsel cites
Headquarters Ruling Letters (‘‘HQ’’)
H241146, dated May 21, 2013; HQ H185775,
dated December 21, 2011; and, HQ 560677,
dated February 3, 1998. We disagree.
In HQ H241146, CBP considered the
country of origin of monochrome laser
printers. In that case, Chinese subassemblies
were imported into the United States, where
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they were assembled with U.S.-origin PCBs,
and programmed with Japanese-origin
firmware. CBP found that the last substantial
transformation occurred in the United States.
While the printers were comprised of
subassemblies and components from various
countries, they were also comprised of a
controller unit assembled in the United
States (with U.S.-origin PCBs), which was
important to the function of the printers. We
note that the case at issue is distinguishable
from HQ H241146 because in addition to the
final printer assembly in the United States,
the printers in HQ H241146 contained U.S.origin PCBs.
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 supplierprovided 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 United States), along with
other minor components and accessories.
CBP determined that Mexico was the country
of origin because the assembly of the various
components resulted in a substantial
transformation. We find HQ H185775
distinguishable because the assembly in
Mexico involved multiple components from
various countries, including TAA-designated
countries.
In HQ 560677, CBP considered two
different notebook computers manufactured
in the United States with parts and
components from various countries. CBP
concluded that the foreign components used
in the manufacture of the notebook
computers lost their separate identities and
became an integral part of a notebook
computer as a result of the operations
performed in the United States. We note that
HQ 560677 specifically pertains to notebook
computers, which is a different product from
the monochrome laser printers at issue, and
CBP has considered many other scenarios
involving the production of printers that are
more relevant to this case.
For example, in HQ H219519, dated April
3, 2013, CBP considered the country of origin
of a color printer and fax machine under
three different scenarios. In scenarios one
and two, the color printer and fax machine
underwent the following operations in
Mexico: final assembly, downloading
firmware written in the United States, and
testing, which included making settings
appropriate to the buyer’s country and the
client’s specific needs. In scenario one, the
assembly took 3-4 minutes whereby the
external memory drive was installed onto the
formatter and the cables were routed as
necessary. The firmware for the engine and
formatter was downloaded onto the hard
drive or solid state drive. In scenario two, the
assembly took 7-8 minutes and involved the
assembly discussed in scenario one, plus the
installation of the intermediate transfer belt.
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In both scenarios, the testing took 7-14
minutes and included making certain settings
for the language, paper, functionality, and
other feature settings, as described above. In
scenario three, the color printer and fax
machine underwent assembly in Mexico that
took 2-3 minutes, the firmware for the subsystems (engine, formatter) was downloaded
onto the hard drive or solid state drive, and
the product underwent testing. The cost of
the incomplete print engine was the most
expensive of the hardware components, with
the formatter board being the second-most
expensive component. CBP determined that
the country of origin of the imported printers
was China under all three scenarios, since
the assembly performed in Mexico was not
significant enough to result in a substantial
transformation of the Chinese components
and subassemblies. In reaching its decision,
CBP emphasized that all of the components
were produced in China (with the exception
of the hard disk from Malaysia), including all
the significant parts that were the essence of
the finished product, particularly the highcost print engine and formatter board.
With respect to the final assembly
processes in the United States, we find that
this case is similar to HQ H219519 and the
CIT’s decision in Energizer because the
assembly process in the United States is not
sufficiently complex for the last substantial
transformation to occur in the United States.
Rather, all of the fully finished printer
subassemblies are manufactured in Vietnam,
and the PCB and firmware are made in Japan.
Thus, substantial manufacturing operations
are performed in these countries. Once the
Vietnamese subassemblies and the Japaneseorigin PCB are imported into the United
States, these 10 subassemblies are soldered/
wired together, and programmed with the
Japanese-origin firmware. All of these
processes, including the testing of the
finished printer (which accounts for half of
the time of the printer’s manufacture), are
concluded in just 40 minutes. The
manufacturing processes of these
subassemblies in the United States do not
rise to the level of complex processes
necessary for a substantial transformation to
occur. In fact, the end-use of the imported
and fully assembled subassemblies is already
pre-determined at the time of importation.
See Energizer at 1319. Additionally, despite
counsel’s attempt to make the manufacturing
processes in the United States appear to be
more complex, upon reviewing the provided
materials, we find that ‘‘threading brittle
wires through spaces into necessary ports to
connect various subassemblies’’ amounts to
nothing more than simply feeding the wiring
harnesses through designated areas,
especially considering that the subassemblies
in question are already manufactured in a
manner that allows for a relatively easy
downstream installation. Accordingly, the
manufacturing processes that occur in the
United States will not subsume the
individual subassemblies into a new and
distinct article of commerce that has a new
name, character, and use.
As discussed in Energizer, in cases in
which the post-importation processing
entails assembly, courts have considered the
nature of the assembly together with the
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name, character, or use test in making a
substantial transformation determination. See
Ran-Paige Co., Inc. v. United States, 35 Fed.
Cl. 117, 121 (1996); Belcrest Linens, 741 F.2d
at 1371; Uniroyal, 3 C.I.T. at 226, 542 F.
Supp. at 1031. The court has sometimes
compared the degree of operations in pre
versus post-importation processing to
evaluate whether a substantial transformation
occurred. For example, in Nat’l Hand Tool,
the court contrasted the pre-importation
processing of cold forming and hot-forging
and noted that it required more complicated
functions than post-importation processing,
which included heat treatment and
electroplating. 16 C.I.T. at 311; see also
Uniroyal, 3 C.I.T. at 224-227, 542 F.Supp. at
1029-31 (comparing a post-importation
‘‘minor manufacturing or combining process’’
in which imported shoe uppers were
attached to outsoles with ‘‘complex
manufacturing processes’’ that occurred preimportation when the imported uppers were
produced). In such cases, CBP has focused on
the importance of other components to make
an origin determination.
For example, in HQ H018467, dated
January 4, 2008, CBP was asked to consider
two manufacturing scenarios for multifunction printers. In one scenario,
manufacturing took place in two countries; in
the other, it took place in three countries. In
the two-country scenario, 18 units were
manufactured in the Philippines from
components produced in various countries.
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 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 the determination (and in addition to
the finding that operations performed in
Japan were meaningful and complex and
resulted in an article of commerce with a
new name, character and use), CBP 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.
Similarly, in HQ W563491, dated February
8, 2007, CBP was asked to consider a twocountry scenario where all of the
subassemblies of the multifunction machine
were made in China, with the exception of
the controller unit subassembly, application
specific integrated circuits and firmware,
which were made in Japan. In that case, the
final assembly, testing, and the final
inspection were done in Japan. Although
CBP stated that the product assembly in
Japan was also complex and meaningful, CBP
focused on the origin of key components in
finding that the country of origin was Japan.
See also HQ H020516, dated November 7,
2008 (CBP considered Sharp Andromeda II J
models composed of eight main
VerDate Sep<11>2014
21:54 Mar 22, 2018
Jkt 244001
subassemblies, two of which involved
processing in Japan. All the engineering,
development, design, and artwork were
developed in Japan. The multifunctional
printer control unit was described as the
brain of the model. While some of the
components were installed on the control
printer board in China, the flash read-only
memory which included firmware developed
in Japan, was manufactured in Japan. The
other unit that involved production in Japan
was the process unit, that housed a drum
produced in Japan. The process unit was
assembled in China. The other subassemblies
were assembled in China but certain key
components of the subassemblies originated
in Japan. The final assembly was performed
in Japan. Based on the totality of the
circumstances discussed in this ruling, CBP
agreed that the Jupiter II J-models were
considered a product of Japan).
Similar to HQ H018467, HQ W563491, and
HQ H020516, in this case, the main PCB
assembly is the motherboard of the printers,
which communicates with the PC, houses the
memory in the printer, and forms the image
printed on the page. It also includes key
functional circuits, including mechanical
control and printing data processing.
Additionally, the overall structure and each
functional circuit of the ASIC, the main
component of PCB, will be designed in Japan
and manufactured by third-party suppliers in
Japan. The firmware itself provides the
control program for the printers and enables
the main PCB assembly to function as the
electronic ‘‘brains’’ of the printers by
controlling all printer functions. The main
PCB assembly (consisting of approximately
1,028 components) and the firmware,
produced in Japan, a TAA-designated
country, account for a significant percentage
of the total subassembly cost. Together, the
firmware and the main PCB, which serve
major functions and are high in value,
constitute the essential character of the
printers. We note that in the three rulings
referenced above, the key components and
the firmware were manufactured and
developed in the same country in which the
final assembly took place. This is not the case
here. However, considering that the
production of the printer occurs in three
countries, we find the last substantial
transformation to occur in Japan, given that
the essential character of the printer is made
in Japan. Accordingly, we find that Japan is
the country of origin of the monochrome
laser printers.
Replacement toner cartridges:
Finally, counsel argues that Japan is the
country of origin for the Brother replacement
toner cartridges. Several CBP rulings are
cited in counsel’s submission. HQ H251592,
dated June 24, 2014, describes an AIO
cartridge with three main components: 1)
toner powder; 2) developer unit; and, 3)
cleaning unit. In HQ H251592, CBP
determined that the processing in Japan
substantially transformed the non-Japanese
components. We find that a similar rationale
can be applied to Brother’s replacement
cartridges. Therefore, it is the opinion of this
office that the country of origin of the
replacement toner cartridges will be Japan.
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
HOLDING:
Based on the facts provided, the imported
fully assembled printer subassemblies from
Japan and Vietnam will not be substantially
transformed into finished monochrome laser
printers by the processes that take place in
the United States. However, the finished
monochrome laser printers will be
considered a product of Japan for purposes
of U.S. Government procurement. With
respect to the Brother replacement toner
cartridges, the country of origin will be
Japan.
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,
Monika R. Brenner
for
Alice A. Kipel, Executive Director
Regulations and Rulings
Office of Trade
[FR Doc. 2018–05964 Filed 3–22–18; 8:45 am]
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Agencies
[Federal Register Volume 83, Number 57 (Friday, March 23, 2018)]
[Notices]
[Pages 12803-12806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05964]
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Customs and Border Protection
Notice of Issuance of Final Determination Concerning Certain
Monochrome Laser Printers and Replacement Toner Cartridges
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 and replacement
toner cartridges. Based upon the facts presented, CBP has concluded
that the country of origin of the monochrome laser printers and
replacement toner cartridges in question is Japan, for purposes of U.S.
Government procurement.
DATES: The final determination was issued on March 19, 2018. 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 April 23, 2018.
FOR FURTHER INFORMATION CONTACT: Yuliya A. Gulis, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at (202)
325-0042.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on March 19,
2018 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 certain monochrome
laser printers and replacement toner cartridges, which may be offered
to the U.S. Government under an undesignated government procurement
contract. This final determination, HQ H287548, 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.
Sec. Sec. 2511-18). In the final determination, CBP concluded that the
country of origin of the monochrome laser printers is Japan for
purposes of U.S. Government procurement. CBP also determined that the
country of origin of replacement toner cartridges is Japan for purposes
of U.S. Government procurement.
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: March 19, 2018.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H287548
March 19, 2018
OT:RR:CTF:VS H287548 YAG
CATEGORY: Origin
Mr. Stanley R. Soya
Baker Botts LLP
The Warner
1299 Pennsylvania Avenue, NW
Washington, D.C. 20004-2400
RE: U.S. Government Procurement; Country of Origin of Monochrome
Laser Printers and Replacement Toner Cartridges; Title III, Trade
Agreements Act of 1979 (19 U.S.C. Sec. 2511 et seq.); Subpart B,
Part 177, CBP Regulations
Dear Mr. Soya:
This is in response to your correspondence, dated June 14, 2017,
requesting a final determination, pursuant to subpart B of Part 177
of the U.S. Customs and Border Protection (``CBP'') Regulations (19
C.F.R. Sec. 177.21 et seq.), on behalf of your clients, Brother
Industries (U.S.A.) (``BIUS'') and Brother International Corporation
(``BIC'') (collectively ``Brother''), concerning the country of
origin of monochrome laser printers and replacement toner
cartridges.
We note that BIUS and BIC are parties-at-interest within the
meaning of 19 C.F.R. Sec. 177.22(d)(1) and are entitled to request
this final determination.
FACTS:
Monochrome Laser Printers:
Brother plans to manufacture two new printer models in the
United States: (1) the HL-L6400DWG, a printer, and (2) the MFC-
L6900DWG, a multifunctional printer/scanner/copier/fax (collectively
``monochrome laser printers''). These monochrome laser printers will
be comprised of approximately 1,100 parts and components from
several countries, including Japan, the Philippines, China, and
Vietnam. The printers are comprised of 8 main subassemblies, as
follows:
(1) Main printed circuit board (``PCB'') assembly or motherboard
of the machine: It will communicate with the PC, house the memory in
the printer, and form the image printed on the page. The main
component of the main PCB will be the Application Specific
Integrated Circuit (``ASIC''), which includes the Central Processor
Unit (``CPU'') and other functional circuits, including the
mechanical control circuit, USB communication control circuit,
printing data processing circuit, and memory control circuit. Most
of the digital processing functions of the main PCB will be
processed by the ASIC. The overall ASIC structure and each
functional circuit will be designed in Japan and manufactured by
third-party suppliers in Japan. The other main components of the
main PCB, which include the random-access memory (``RAM''), read-
only memory (``ROM''), electrically erasable programmable read-only
memory (``EEPROM''), and printed circuit board, will be produced in
various other countries. The components of the main PCB assembly
will be assembled in Japan.
(2) Firmware: The firmware will be software embedded in the main
PCB of the machines to provide the control program for the device.
The overall design and most steps in the development of the firmware
will be performed in Japan.
(3) Fuser unit: The fuser unit will apply pressure and heat to
the printed page to enable toner to permanently melt onto it. The
main components of the fuser unit, including a pressure roller,
halogen lamp, thermistor
[[Page 12804]]
sensor, drive gear, upper case, and lower case, will be produced in
various countries. The components of the fuser unit will be
assembled in Vietnam.
(4) Automatic Document Feeder (``ADF'') unit: The ADF unit takes
up to 80 pages and feeds them one page at a time into the scanner,
allowing for the copying, printing or faxing of multi-page documents
without requiring the user to manually replace each page. This
subassembly will be available for the MFC-L6900DWG. The main
components of the ADF unit, including ADF cover, document cover, and
document separate roller will be produced in various countries, and
assembled in Vietnam.
(5) Organic Photo Conductor (``OPC'') drum unit: The OPC drum
unit is an aluminum cylinder that attracts toner using an
electrostatic charge that is transferred to paper to create a
printed image. The main components of the OPC drum unit, including
the OPC drum, corona wire, drive gear, and case, will be produced in
various countries, and assembled in Vietnam.
(6) Toner cartridge: The toner cartridge will hold the toner
that is transferred to an electrostatically charged OPC drum. The
main component of the toner cartridge, the toner powder, will be
produced in Japan. All other components of the toner cartridge,
including the developer roller, agitator, supply roller, drive gear,
and cases, are produced in various countries. The components of the
toner cartridge will be assembled in Vietnam.
(7) Operation panel unit: The operation panel unit controls
printer functions and communicates information about the printer and
print jobs. The main components of the operation panel unit,
including the LCD assembly, which displays the machine status and
menu, the LCD control board, touch sensor, key switch, and panel
cover, will be produced in various countries, and will be assembled
in Vietnam.
(8) Body unit: The body unit consists of various components,
such as the cover and frame, paper tray, high-voltage and low-
voltage power supply boards, paper feeder, laser unit, flatbed
document scanner, and modem board. These components will come from
various countries, and will be assembled in Vietnam.
It is claimed that the main PCB assembly and the firmware represent
the ``brains'' of the printer. Further, it is claimed that the
Vietnamese subassembly production of the fuser unit, ADF unit, OPC
drum unit, toner cartridge, and body unit, as described above, does
not require sophisticated skills or expensive machinery. The
subassemblies will be generally assembled in Vietnam by using jigs
and an electric screwdriver to connect the individual parts of each
unit together.
The final manufacturing operations of the monochrome laser
printers will take place in the United States, and will take
approximately 40 minutes to complete (this timeframe includes
testing of the final product). The manufacturing process for two
models of the monochrome laser printers slightly differs in steps,
but in both cases, the process involves threading brittle wires
through spaces into necessary ports to connect various
subassemblies, which requires a degree of precision to ensure that
cables and connectors are not damaged or improperly connected.
Counsel provided a step-by-step description of the finished printer
assembly. Counsel also highlighted the complexity of the process by
indicating the fact that, if inserted incorrectly, the cables (which
are thin strips of conductive aluminum, coated in a thin layer of
insulating material) can break and cause the printer to malfunction
throughout its lifecycle. Moreover, there are several cables that,
if damaged during the assembly, will require replacement of the
entire subassembly upon which the cable is soldered. The main PCB
assembly and the firmware, though produced in Japan, will be
integrated into the printers in the United States.
Once assembly is completed, both printer models will undergo
testing and inspection, which is customized by Brother in Japan to
ensure optimal functionality of each printer. Testing and inspection
includes not only running Brother's proprietary inspection system,
but also a manual inspection of components and overall functioning
of the product. These steps will include verifying and installing
the firmware to the main PCB assembly and calibrating the position
of the laser beam's exposure starting point.
Finally, counsel emphasizes that Brother employees responsible
for assembling, inspecting and testing the printers in the United
States will be required to undergo approximately two weeks of
customized training.
Replacement toner cartridges:
Brother also plans to sell new replacement toner cartridges to
the U.S. Government as a separate consumable end-product. The toner
cartridges can be used interchangeably in both the model HL-
L6400DWG, printer; and the model MFC-L6900DWG, printer/scanner/
copier/fax. The cartridges will be mainly comprised of the following
parts: (1) toner powder; (2) supply rollers; (3) developer roller;
(4) toner uniform blade; and, (5) cleaning unit. Counsel maintains
that the toner powder is the most critical component of the
cartridge, as it is a complex powder that allows the printers to
form an image on paper. Brother's toner powder will be developed and
manufactured in Japan at a toner manufacturer's facility. The toner
powder will account for approximately 40% of the total parts and
cost of the toner cartridges. The finished cartridge will be made of
29 parts from Japan, Vietnam, China, Philippines, Malaysia, and
Indonesia. All these components will be brought together by the
manufacturing process in Japan to build the replacement cartridges.
The most expensive parts of the cartridge include: (1) the toner
powder, which is manufactured in Japan; (2) the developer roller,
which will be manufactured in Japan and the Philippines; and, (3)
the supply roller and the blade, which will be manufactured in
China. Counsel claims that the country of origin of Brother
replacement toner cartridges is Japan.
ISSUE:
What is the country of origin of the monochrome laser printers
and replacement toner cartridges for purposes of U.S. Government
procurement?
LAW AND ANALYSIS:
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,
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
(``TAA''), as amended (19 U.S.C. Sec. 2511 et seq.).
Under the rule of origin set forth under 19 U.S.C. Sec.
2518(4)(B):
An article is a product of a country or instrumentality only if
(i) it is wholly the growth, product, or manufacture of that country
or instrumentality, or (ii) in the case of an article which consists
in whole or in part of materials from another country or
instrumentality, it has been substantially transformed into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.
See also 19 C.F.R. Sec. 177.22(a).
In rendering final determinations for purposes of U.S.
Government procurement, CBP applies the provisions of subpart B of
Part 177 consistent with the Federal Procurement 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 Trade Agreements Act. 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.'' See 48 C.F.R.
Sec. 25.003.
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 C.I.T. 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 C.I.T. 220, 542 F.
Supp. 1026 (1982).
In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d
1308 (2016), the Court of International Trade (``CIT'') interpreted
the meaning of ``substantial transformation'' as used in the TAA for
purposes of government procurement. Energizer involved the
determination of the country of origin of a flashlight, referred to
as the Generation II flashlight, under the TAA. All of the
components of the Generation II flashlight were of Chinese origin,
except for a white LED and a hydrogen getter. The components
[[Page 12805]]
were imported into the United States where they were assembled into
the finished Generation II flashlight.
The court reviewed the ``name, character and use'' test utilized
in determining whether a substantial transformation has occurred and
noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. at 226, 542
F. Supp. at 1031, aff'd, 702 F.2d 1022 (Fed. Cir. 1983), that when
``the post-importation processing consists of assembly, courts have
been reluctant to find a change in character, particularly when the
imported articles do not undergo a physical change.'' Energizer at
1318. In addition, the court noted that ``when the end-use was pre-
determined at the time of importation, courts have generally not
found a change in use.'' Energizer at 1319, citing as an example,
National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310,
aff'd, 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have
considered the nature of the assembly, i.e., whether it is a simple
assembly or more complex, such that individual parts lose their
separate identities and become integral parts of a new article.
In reaching its decision in Energizer, the court expressed the
question as one of whether the imported components retained their
names after they were assembled into the finished Generation II
flashlights. The court found ``[t]he constitutive components of the
Generation II flashlight do not lose their individual names as a
result [of] the post-importation assembly.'' The court also found
that the components had a pre-determined end-use as parts and
components of a Generation II flashlight at the time of importation
and did not undergo a change in use due to the post-importation
assembly process. Finally, the court did not find the assembly
process to be sufficiently complex as to constitute a substantial
transformation. Thus, the court found that Energizer's imported
components did not undergo a change in name, character, or use as a
result of the post-importation assembly of the components into a
finished Generation II flashlight. Virtually all of the components
of the military Generation II flashlight, including the most
important component, the LED, were of Chinese origin. Thus, the
court determined that China was the correct country of origin of the
finished Generation II flashlights under the government procurement
provisions of the TAA.
Monochrome Laser Printers:
In this case, counsel argues that the country of origin of the
monochrome laser printers at issue will be the United States because
the printers will be assembled in a process that involves: (1)
complex post-importation assembly operations; (2) the installation
of the main PCB assembly and a firmware verification and download;
and, (3) a customized testing and inspection process. In support of
its position, counsel cites Headquarters Ruling Letters (``HQ'')
H241146, dated May 21, 2013; HQ H185775, dated December 21, 2011;
and, HQ 560677, dated February 3, 1998. We disagree.
In HQ H241146, CBP considered the country of origin of
monochrome laser printers. In that case, Chinese subassemblies were
imported into the United States, where they were assembled with
U.S.-origin PCBs, and programmed with Japanese-origin firmware. CBP
found that the last substantial transformation occurred in the
United States. While the printers were comprised of subassemblies
and components from various countries, they were also comprised of a
controller unit assembled in the United States (with U.S.-origin
PCBs), which was important to the function of the printers. We note
that the case at issue is distinguishable from HQ H241146 because in
addition to the final printer assembly in the United States, the
printers in HQ H241146 contained U.S.-origin PCBs.
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
United States), along with other minor components and accessories.
CBP determined that Mexico was the country of origin because the
assembly of the various components resulted in a substantial
transformation. We find HQ H185775 distinguishable because the
assembly in Mexico involved multiple components from various
countries, including TAA-designated countries.
In HQ 560677, CBP considered two different notebook computers
manufactured in the United States with parts and components from
various countries. CBP concluded that the foreign components used in
the manufacture of the notebook computers lost their separate
identities and became an integral part of a notebook computer as a
result of the operations performed in the United States. We note
that HQ 560677 specifically pertains to notebook computers, which is
a different product from the monochrome laser printers at issue, and
CBP has considered many other scenarios involving the production of
printers that are more relevant to this case.
For example, in HQ H219519, dated April 3, 2013, CBP considered
the country of origin of a color printer and fax machine under three
different scenarios. In scenarios one and two, the color printer and
fax machine underwent the following operations in Mexico: final
assembly, downloading firmware written in the United States, and
testing, which included making settings appropriate to the buyer's
country and the client's specific needs. In scenario one, the
assembly took 3-4 minutes whereby the external memory drive was
installed onto the formatter and the cables were routed as
necessary. The firmware for the engine and formatter was downloaded
onto the hard drive or solid state drive. In scenario two, the
assembly took 7-8 minutes and involved the assembly discussed in
scenario one, plus the installation of the intermediate transfer
belt. In both scenarios, the testing took 7-14 minutes and included
making certain settings for the language, paper, functionality, and
other feature settings, as described above. In scenario three, the
color printer and fax machine underwent assembly in Mexico that took
2-3 minutes, the firmware for the sub-systems (engine, formatter)
was downloaded onto the hard drive or solid state drive, and the
product underwent testing. The cost of the incomplete print engine
was the most expensive of the hardware components, with the
formatter board being the second-most expensive component. CBP
determined that the country of origin of the imported printers was
China under all three scenarios, since the assembly performed in
Mexico was not significant enough to result in a substantial
transformation of the Chinese components and subassemblies. In
reaching its decision, CBP emphasized that all of the components
were produced in China (with the exception of the hard disk from
Malaysia), including all the significant parts that were the essence
of the finished product, particularly the high-cost print engine and
formatter board.
With respect to the final assembly processes in the United
States, we find that this case is similar to HQ H219519 and the
CIT's decision in Energizer because the assembly process in the
United States is not sufficiently complex for the last substantial
transformation to occur in the United States. Rather, all of the
fully finished printer subassemblies are manufactured in Vietnam,
and the PCB and firmware are made in Japan. Thus, substantial
manufacturing operations are performed in these countries. Once the
Vietnamese subassemblies and the Japanese-origin PCB are imported
into the United States, these 10 subassemblies are soldered/wired
together, and programmed with the Japanese-origin firmware. All of
these processes, including the testing of the finished printer
(which accounts for half of the time of the printer's manufacture),
are concluded in just 40 minutes. The manufacturing processes of
these subassemblies in the United States do not rise to the level of
complex processes necessary for a substantial transformation to
occur. In fact, the end-use of the imported and fully assembled
subassemblies is already pre-determined at the time of importation.
See Energizer at 1319. Additionally, despite counsel's attempt to
make the manufacturing processes in the United States appear to be
more complex, upon reviewing the provided materials, we find that
``threading brittle wires through spaces into necessary ports to
connect various subassemblies'' amounts to nothing more than simply
feeding the wiring harnesses through designated areas, especially
considering that the subassemblies in question are already
manufactured in a manner that allows for a relatively easy
downstream installation. Accordingly, the manufacturing processes
that occur in the United States will not subsume the individual
subassemblies into a new and distinct article of commerce that has a
new name, character, and use.
As discussed in Energizer, in cases in which the post-
importation processing entails assembly, courts have considered the
nature of the assembly together with the
[[Page 12806]]
name, character, or use test in making a substantial transformation
determination. See Ran-Paige Co., Inc. v. United States, 35 Fed. Cl.
117, 121 (1996); Belcrest Linens, 741 F.2d at 1371; Uniroyal, 3
C.I.T. at 226, 542 F. Supp. at 1031. The court has sometimes
compared the degree of operations in pre versus post-importation
processing to evaluate whether a substantial transformation
occurred. For example, in Nat'l Hand Tool, the court contrasted the
pre-importation processing of cold forming and hot-forging and noted
that it required more complicated functions than post-importation
processing, which included heat treatment and electroplating. 16
C.I.T. at 311; see also Uniroyal, 3 C.I.T. at 224-227, 542 F.Supp.
at 1029-31 (comparing a post-importation ``minor manufacturing or
combining process'' in which imported shoe uppers were attached to
outsoles with ``complex manufacturing processes'' that occurred pre-
importation when the imported uppers were produced). In such cases,
CBP has focused on the importance of other components to make an
origin determination.
For example, in HQ H018467, dated January 4, 2008, CBP was asked
to consider two manufacturing scenarios for multi-function printers.
In one scenario, manufacturing took place in two countries; in the
other, it took place in three countries. In the two-country
scenario, 18 units were manufactured in the Philippines from
components produced in various countries. 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 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 the determination (and in
addition to the finding that operations performed in Japan were
meaningful and complex and resulted in an article of commerce with a
new name, character and use), CBP 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.
Similarly, in HQ W563491, dated February 8, 2007, CBP was asked
to consider a two-country scenario where all of the subassemblies of
the multifunction machine were made in China, with the exception of
the controller unit subassembly, application specific integrated
circuits and firmware, which were made in Japan. In that case, the
final assembly, testing, and the final inspection were done in
Japan. Although CBP stated that the product assembly in Japan was
also complex and meaningful, CBP focused on the origin of key
components in finding that the country of origin was Japan. See also
HQ H020516, dated November 7, 2008 (CBP considered Sharp Andromeda
II J models composed of eight main subassemblies, two of which
involved processing in Japan. All the engineering, development,
design, and artwork were developed in Japan. The multifunctional
printer control unit was described as the brain of the model. While
some of the components were installed on the control printer board
in China, the flash read-only memory which included firmware
developed in Japan, was manufactured in Japan. The other unit that
involved production in Japan was the process unit, that housed a
drum produced in Japan. The process unit was assembled in China. The
other subassemblies were assembled in China but certain key
components of the subassemblies originated in Japan. The final
assembly was performed in Japan. Based on the totality of the
circumstances discussed in this ruling, CBP agreed that the Jupiter
II J-models were considered a product of Japan).
Similar to HQ H018467, HQ W563491, and HQ H020516, in this case,
the main PCB assembly is the motherboard of the printers, which
communicates with the PC, houses the memory in the printer, and
forms the image printed on the page. It also includes key functional
circuits, including mechanical control and printing data processing.
Additionally, the overall structure and each functional circuit of
the ASIC, the main component of PCB, will be designed in Japan and
manufactured by third-party suppliers in Japan. The firmware itself
provides the control program for the printers and enables the main
PCB assembly to function as the electronic ``brains'' of the
printers by controlling all printer functions. The main PCB assembly
(consisting of approximately 1,028 components) and the firmware,
produced in Japan, a TAA-designated country, account for a
significant percentage of the total subassembly cost. Together, the
firmware and the main PCB, which serve major functions and are high
in value, constitute the essential character of the printers. We
note that in the three rulings referenced above, the key components
and the firmware were manufactured and developed in the same country
in which the final assembly took place. This is not the case here.
However, considering that the production of the printer occurs in
three countries, we find the last substantial transformation to
occur in Japan, given that the essential character of the printer is
made in Japan. Accordingly, we find that Japan is the country of
origin of the monochrome laser printers.
Replacement toner cartridges:
Finally, counsel argues that Japan is the country of origin for
the Brother replacement toner cartridges. Several CBP rulings are
cited in counsel's submission. HQ H251592, dated June 24, 2014,
describes an AIO cartridge with three main components: 1) toner
powder; 2) developer unit; and, 3) cleaning unit. In HQ H251592, CBP
determined that the processing in Japan substantially transformed
the non-Japanese components. We find that a similar rationale can be
applied to Brother's replacement cartridges. Therefore, it is the
opinion of this office that the country of origin of the replacement
toner cartridges will be Japan.
HOLDING:
Based on the facts provided, the imported fully assembled
printer subassemblies from Japan and Vietnam will not be
substantially transformed into finished monochrome laser printers by
the processes that take place in the United States. However, the
finished monochrome laser printers will be considered a product of
Japan for purposes of U.S. Government procurement. With respect to
the Brother replacement toner cartridges, the country of origin will
be Japan.
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,
Monika R. Brenner
for
Alice A. Kipel, Executive Director
Regulations and Rulings
Office of Trade
[FR Doc. 2018-05964 Filed 3-22-18; 8:45 am]
BILLING CODE 9111-14-P