Country of Origin Marking of Smart Glasses; Section 301

H348154 August 29, 2025 OT:RR:CTF:VSP H348154 ACH CATEGORY: Origin Ms. Suzanne Kane Akin Gump Strauss Hauer & Feld LLP 2001 K Street, N.W. Washington, DC 20006-1037 Re: Country of Origin Marking of Smart Glasses; Section 301 Dear Ms. Kane: This is in response to your letter dated May 14, 2025, requesting a binding ruling on behalf of your client, [ ] concerning the country of origin of Smart Glasses for marking, and Section 301 duty purposes. Either [ ] or [ ] will act as the importer of record. You have requested that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets in this ruling or in the attachments to this ruling request, forwarded to our office, will not be released to the public and will be withheld from published versions of this ruling. FACTS: The glasses at issue are artificial intelligence (“AI”) Smart Glasses that offer users the opportunity to capture photos and videos, make video calls or livestream, store photos and videos, listen to music, make phone calls, send texts using voice commands, and ask questions and receive answers using AI. The Smart Glasses will have a front frame, right and left temple pieces, and two lenses. The lenses of the Smart Glasses will be available as prescription or non- prescription, depending on what the customer chooses. The customer has the option to select polarized or non-polarized sunglass lenses, transition, blue filter, or clear form lenses. The Smart Glasses are within the same product family as the smart glasses covered by Headquarters Ruling Letter (“HQ”) H345669, dated July 23, 2025. However, the instant glasses will include: a different type of battery (steel can) and corresponding adjustments to surrounding components, providing substantially longer battery life and enabling extended use of device features for users throughout the day; a privacy light-emitting diode (“LED”) and camera module that are no longer electrically coupled; and different signal routes within the main logic board (“MLB”) (though without a change to the components of the MLB). The Smart Glasses will be equipped with a [ ] chipset that is mounted to the MLB within the product. The Smart Glasses will incorporate a high-power main processing unit that handles heavy computing including photo and video processing, wireless communication, and AI functionalities; a microcontroller unit (“MCU”) that handles lower computing functionalities such as sensor processing, audio playback, and microphone capture; components that provide memory storage; and components that provide capacitive touch functionality, allowing users to interact with the Smart Glasses through touch gestures. All the above functions will be made possible by the chipset that is mounted on the MLB, which is responsible for the flow of data, power, and communication between the major components. The main components of the chipset include the applications processor, which handles instructions, manages memory, manages power, processes all multimedia (i.e., audio, video, and other data), and ensures that all parts and components are communicating with each other to ensure fully integrate operations, and the Wi-Fi/Bluetooth chip, which enables Wi-Fi and Bluetooth connectivity for the device. It is stated that the MLB drives the functioning of the Smart Glasses through visual and audio feedback from several other components, including: • The Secondary Logic Board (“SLB”). The SLB is an auxiliary PCBA that is responsible for enabling and amplifying the audio of the speaker on the right temple flexible printed circuit board. The SLB also contains an action button that allows the user to activate video or streaming. The SLB supports the communication capabilities of the Smart Glasses by enabling the speaker to perform key functions such as audio amplification and commence streaming and other features by engaging the action button. • Flexible Printed Circuit Assemblies (“FPCAs”). The FPCAs are responsible for connecting the different components of the Smart Glasses to each other and directly or indirectly to the MLB. The Superflex FPCA contains a microphone and connects to the MLB, camera, SLB, and charging contacts. The Camera FPCA contains the camera module and connects to the Superflex FPCA. The Right Temple FPCA contains two microphones, an integrated circuit (“IC”), and right speaker pads and connects to the SLB and the right temple speaker. The left temple FPCA contains two microphones and left speaker pads and connects to the MLB and the left speaker. The Slider FPCA contains a two-position switch and connects to the MLB. • A Camera. The camera is responsible for the photo and video capturing capabilities of the Smart Glasses. The main processing unit on the MLB processes data feedback from the camera sensor that is required to capture a picture. • Microphones. The microphones are responsible for the audio and voice capturing capabilities of the Smart Glasses. The main processing unit on the MLB computes voice and audio from the microphones that starts the activation of the AI. The processing unit on the MLB processes questions and inquiries by the user. Some requests must be fulfilled by servers (e.g., AI queries requiring more processing bandwidth). These are transmitted from the main processing unit to the user’s smartphone by wireless Bluetooth connectivity and then sent from the smartphone to backend servers for fulfillment and 2 response. AI’s response is then transferred back to the phone, where the main processing unit plays it out of the speaker. • Speakers. The speakers are responsible for the sound output of the Smart Glasses. The chipset on the MLB is critical to managing the input data and communicating with the other components so the user can access key device functionalities such as playing audio through the Speakers. • The Battery. The battery is responsible for storing energy that can be used to power the Smart Glasses. The chipset on the MLB ensures efficient energy usage as it controls the power management system of the battery. The battery incorporated into the Smart Glasses is a steel can battery. The finished MLB collects all audio and visual inputs from these components to provide the user experience, including playing audio, taking pictures, enabling touch/button control, accessing AI features, and connecting to a smartphone. The manufacturing steps for the Smart Glasses will occur in three main stages: (1) the production of individual components in ten to eleven countries; (2) the production of the main PCBA (i.e., the MLB) and the auxiliary PCBA (i.e., the SLB) in Vietnam by means of surface- mount technology (“SMT”); and (3) final assembly, final software uploads, testing, and packout (“FATP”) in China. Between 500 and 600 components are incorporated into the MLB, and between 10 and 20 components are incorporated into the SLB. SMT of the MLB and SLB requires several days of manufacturing training for line operators, and the assembly of both PCBAs takes several hours. The FATP process in China takes less than two hours and includes temple assemblies, main line assembly, testing, and packaging. Almost 50 percent of the components’ cost comes from Chinese-origin components, including the memory, mechanicals (frame, hinge, logo, nose pad, and buttons), camera, battery, flexes, audio, other electrical engineering components (“EE”), PCB, critical ICs, interconnect, and antenna. Over 30 percent of the components come from Taiwan, including other EE, chipset, memory, PCB, antenna, and critical ICs. All other countries provide less than 10 percent of the components’ cost percentage. While the bare PCBs account for less than one percent of the total bill of materials (“BOM”) cost, between 500 and 600 of the MLB components and between 10 and 20 SLB components are surface mounted to the PCBs (through SMT) in Vietnam to create the finished PCBAs that ultimately drive the operation of the Smart Glasses. The highest priced component incorporated into the PCB is the chipset from Taiwan. ISSUES: (1) What is the country of origin for marking purposes of the Smart Glasses? (2) Whether the Smart Glasses are subject to Section 301 measures. 3 LAW AND ANALYSIS: (1) Country of Origin Marking The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), provides that unless excepted, “every article of foreign origin (or its container …) 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 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 marking on imported goods the country of which the goods {are} the product. The evident purpose is to mark the goods so that 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, 302 (1940). Part 134 of Title 19 of the Code of Federal Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. 19 C.F.R. § 134.1(b) provides as follows: (b) Country of origin. “Country of origin” means 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 laws and regulations}. The test for determining whether a substantial transformation occurs is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. Texas Instruments Inc. v. United States, 681 F.2d 778 (CCPA 1982). This determination is based on the totality of the evidence. National Hand Tool Corp. v. United States, 16 Ct. Int’l Trade 308, 312 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). The U.S. Court of International Trade (“CIT”) has stated that “if the manufacturing or combining process is merely a minor one which leaves the identity of the imported article intact, a substantial transformation has not occurred.” Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 1029 (Ct. Int’l Trade 1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (per curiam). 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, or 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 manufacturing process may be considered when determining whether a substantial transformation has occurred. No one factor is determinative. See e.g., HQ H311606, dated June 16, 2021; and HQ H302801, dated October 3, 2019. 4 The CIT has indicated that “{f}or courts to find a change in character, there often needs to be a substantial alteration in the characteristics of the article or components.” Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1318 (2016) (citing Ran-Paige Co., Inc. v. United States, 35 Fed. Cl. 117, 121 (1996) and National Hand Tool Corp. v. United States, 16 Ct. Int’l Trade 308, 311 (1992)). Courts have also considered “the ‘essence’ of a completed article to determine whether an imported article has undergone a change in character as a result of post importation processing.” Id. (citing Uniden America Corp. v. United States, 120 F. Supp. 2d 1091, 1095-1098 (Ct. Int’l Trade 2000) and Uniroyal, Inc., 542 F. Supp. 1030). In Uniroyal, Inc., the court determined that the shoe upper was “the very essence of the completed shoe” and that the attachment of the imported shoe uppers to an outer sole in the United States was a “minor manufacturing or combining process which leaves the identity of the upper intact,” therefore, the shoe upper was not substantially transformed in the United States. 542 F. Supp. at 1029-1030. The court also noted that the minor assembly operation in the United States “require{d} only a small fraction of the time and cost involved in producing the uppers.” Id. at 1030. “CBP has consistently held that the assembly of components onto a printed circuit board is a substantial transformation.” HQ H311447, dated September 10, 2020. “With respect to printed circuit boards, Customs has ruled that the complete assembly of all the components onto a printed circuit board was a substantial transformation of the printed circuit board because the assembly process was complex and involved a considerable amount of skill and time.” HQ 735306, dated December 21, 1993. “The SMT operations result in a new and different product with an overall use and function different than any one function of the individual components. Each individual component serves a particular purpose or function once incorporated into the PCBA. Prior to the SMT operations, these components are stand-alone, general use items.” HQ H302801, dated October 3, 2019. The subject Smart Glasses are similar in some ways to the wearable electronic smart device in HQ H302801. In that ruling, CBP considered the country of origin of a Fitbit device. CBP determined that, as in HQ H287548, dated March 23, 2018; New York Ruling Letter (“NY”) N303008, dated March 8, 2019; and HQ H301910, dated August 5, 2019, the Fitbit’s PCBA represented the essence of the Fitbit device because it incorporated the electronic components that together gave the smart device its functionality and enabled the device to operate as intended. In HQ H302801, CBP stated that “{t}he unique and full functionality of Fitbit’s devices is only accessed once the components and subassemblies are integrated and populated into the PCBA,” which is accomplished by using the SMT process in Taiwan or in another country such as Malaysia or Indonesia. The individual components, such as the Bluetooth transceivers, once incorporated into the PCBA through the SMT process, lose their identity because they cannot “individually carry out the functions of … a smart watch or … track the user’s fitness and activity,” and become “an integral part of the new article.” CBP further stated that the final assembly process in China, which involved “{a}ttaching the PCBAs into the housing with the vibration motor, battery, display, and wristband” did not render the PCBAs into a product with a new name, character, or use. Moreover, CBP determined that the final assembly process required less training for the workers than the SMT process and was not time intensive. Accordingly, CBP concluded that the final assembly process in China did not substantially transform the PCBAs. CBP concluded that the SMT operations in Taiwan or in another country, 5 such as Malaysia or Indonesia, “result{ed} in a substantial transformation of the electronic components from Taiwan and the Philippines into a new and different article of commerce with a new name, character, and use distinct from the components.” Accordingly, CBP determined that the country of origin for the Fitbit device was where the SMT operations occurred. Further, in HQ H322417, dated February 23, 2022, CBP found that the PCBAs were the essence of a smartwatch with a different name, character and use from the components and the blank circuit board that underwent the SMT process. The smartwatch was composed of between 800 and 900 components, more than 700 of which were incorporated into two PCBAs using the SMT process in Taiwan. When incorporated onto the printed circuit board, the individual components and the blank printed circuit board developed a new name, a PCBA. See HQ H311447, dated September 10, 2020 (stating that “CBP has consistently held that the assembly of components onto a printed circuit board is a substantial transformation”), and HQ H302801, dated October 3, 2019. However, the country of origin of a PCBA does not automatically determine an article’s country of origin. In HQ H328859, dated June 10, 2024, CBP found that, even though the PCBA of a printer was manufactured in Japan, the country of origin of the printer was China. By quantity, approximately 97 percent of all components were produced in China. Further, CBP found that, although the PCBA and Japanese-origin firmware enabled the thermal printers to communicate with external devices and process the images to be printed, other components and assemblies were also critical in enabling the printer to form text or images and apply heat to the paper to create text or images. In this case, the individual components and the blank circuit board undergo a change in character when the components are assembled onto the blank circuit board and become printed circuit board assemblies via the SMT process. The PCBAs in the instant case, like the PCBAs in HQ H302801, form the “brain” of the device and enable the device to function as intended. Through the SMT process, the components, including the [ ] chipsets in each set of glasses, change in character from individual components capable of limited functions and a blank circuit board incapable of any functions to PCBAs that represent the essence of the Smart Glasses because they enable the Smart Glasses to function. The individual components and the blank circuit board undergo a change in use when the components are assembled onto the blank circuit board and become the PCBA via the SMT process. Like some of the components in HQ H302801, the individual components and blank circuit board are “stand-alone, general use items” that are usable in other devices and do not alone accomplish the full functionality of the Smart Glasses. In this case, the MLBs allow the device to play audio, take pictures, have touch/button control, access AI features, and connect to a smartphone. Before the components are assembled onto the blank circuit board, each of the individual components is only capable of limited functions and the blank circuit board is not capable of any functions. The functionality of the Smart Glasses is dependent on the collective capabilities of the PCBAs. Further, even though a majority of the components in these glasses are of Chinese origin (as in HQ H328859), CBP does not find that the country of origin of these Smart Glasses is 6 China. Unlike HQ H328859, the MLB and SLB are the essence or brain of these devices. The Smart Glasses cannot perform any of their unique, technological functions without them. Although these glasses may have prescription lenses, we believe that the technological abilities of these Smart Glasses are the driving force for consumer desire of this product. The other elements of the Smart Glasses provide ancillary benefits but primarily allow users to access the content of the MLB and SLB. The additional components added, as in Uniroyal, do not change the essence of the Smart Glasses provided by these PCBAs. Although the FATP process occurring in China also takes a significant amount of time, CBP is satisfied that, because the MLB and SLB are the “brain” of the Smart Glasses, the FATP does not result in a substantial transformation. After the MLB and SLB have been assembled, the Smart Glasses do not undergo any operations that change their name, character, or use. Based on the facts presented, we conclude that the PCBAs provide the essential character of the Smart Glasses, and the Smart Glasses are products of Vietnam, where the PCBAs are manufactured through SMT. The Smart Glasses should be marked accordingly at the time of importation into the United States. (2) Section 301 Measures The United States Trade Representative has determined that an additional ad valorem duty will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). See Section XXII, Chapter 99, Subchapter III, U.S. Note 20, HTSUS. The substantial transformation analysis is applicable when determining the country of origin for purposes of applying Section 301 measures. See HQ H301494, dated October 29, 2019; and HQ H301619, dated November 6, 2018. In this case, the Smart Glasses are not subject to the additional Section 301 measures because the country of origin of the Smart Glasses is Vietnam, where the PCBAs are manufactured by SMT operations. HOLDING: The country of origin of the Smart Glasses for purposes of marking and for purposes of additional Section 301 measures is Vietnam. Therefore, the Smart Glasses are not subject to Section 301 measures. 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 Customs Service 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.” 7 A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction. Sincerely, For Monika R. Brenner, Chief Valuation and Special Programs Branch 8