Country of origin of TFT-LCD vehicle modules; Reconsideration of New York Ruling Letter (NY) N315592

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H315393 December 10, 2020 OT:RR:CTF:VS H315393 RSD CATEGORY: Origin Lucas Rock Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 599 Lexington Avenue, 36th Floor New York, NY 10022 RE: Country of origin of TFT-LCD vehicle modules; Reconsideration of New York Ruling Letter (NY) N315592 Dear Mr. Rock: It has come to the attention of this office that an error was made in the representation of the facts within Ruling Letter N315592 dated November 16, 2020, which was issued to you in response to your request on behalf of your client, the Innolux Corporation. The subject ruling addressed the country of origin of TFT-LCD display modules. The requestor states that the ruling did not accurately reflect the manufacturing process as illustrated by their ruling request. In order to accurately state the facts involved in producing the TFT-LCD display modules, we are revoking NY N315592 effective the date of this letter. FACTS: The merchandise at issue under consideration are described as 13.4” FHD TFT- LCD display modules, which are specifically identified by three different part numbers; DD134IA-01A, DD134IA-01B, and DD134IA-01C. Each module consists of a TFT-LCD cell, a capacitive touch screen, source and gate Integrated Circuits (ICs), a PCBA, a flexible printed circuit (FPC) connector, and a backlight. The subject modules are designed and manufactured to be incorporated into vehicles to act as in-dash display modules. The assembly process, as described in N315592, begins in Taiwan with the manufacture of the TFT-LCD cell by depositing transistors and color pigmentation on two separate glass substrates. These substrates are then combined and liquid crystals are injected between to create the finished cell. The gate and driver ICs, which are manufactured in Taiwan, are then bonded to the back of the cell. Also in Taiwan, the capacitive touchscreen is created by applying circuits and a photo-resistive coating to a glass substrate. The cell with attached ICs and touchscreen are then sent to China for final assembly. In China, the PCBA and FPC connector are added as well as the backlight, diffuser, and glass cover. Finally, the components are assembled into a metal housing, creating the finished module. Counsel states that an error was made in this description, in that the gate and driver ICs are not bonded to the back of the cell in Taiwan, but sent separately to China and attached in that location. The process should be described as beginning in Taiwan with the manufacture of the TFT-LCD cell. Additionally, the gate and driver ICs as well as the capacitive touch screen are manufactured in Taiwan. The cell, ICs, and touchscreen are then sent to China for final assembly. The ICs are bonded to the top of the cell and the PCBA and FPC connector are added as well as the backlight, diffuser, and glass cover. Finally, the components are assembled into a metal housing, creating the finished module. ISSUE: What is the country of origin of the TFT-LCD vehicle display modules? LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. "The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940). Part 134, Customs and Border Protection (CBP) Regulations (19 C.F.R. 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP Regulations (19 C.F.R. 134.1(b)), defines "country of origin" as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of [the marking regulations]. . . .” A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). 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. Based upon the information presented, it remains our opinion that the components manufactured in Taiwan impart the essential functional components of the finished module. The manufacturing of the cell, ICs, and touchscreen is significantly complex and renders the end use of the components predetermined. Additionally, the assembly processes performed in China is not complex enough to substantially transform either item into a new and different article of commerce. Consequently, in our judgment, as described above, although the method used to manufacture of the LCDTFT vehicle display modules was different than what was described in N315592, nevertheless it would not alter the country of origin determination made in N315592. Therefore, we find that the country of origin of the 13.4” FHD LCD-TFT vehicle display modules, part numbers DD134IA-01A, DD134IA-01B, and DD134IA-01C, is Taiwan. HOLDING: The country of origin of the 13.4” FHD LCD-TFT vehicle display modules, part numbers DD134IA-01A, DD134IA-01B, and DD134IA-01C, is Taiwan. N315592, dated November 16, 2020, is hereby revoked. This revocation is not subject to the notice and comment provisions of 19 U.S.C. § 1625(c) because NY N315592 has been in effect for less than 60 days. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a CBP field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy of this ruling, it should be brought to the attention of the CBP officer handling the transaction. Sincerely, For Craig T. Clark, Director, Commercial and Trade Facilitation Division