The country of origin and application of the Section 301 trade remedy of a digital thermometer

N302764 April 19, 2019 CLA-2-90:OT:RR:NC:N1:105 CATEGORY: Origin Mr. Peter Klestadt Mr. Arthur W. Bodek Grunfeld, Desiderio, Lebowitz, Silverman, Klestadt LLP 599 Lexington Avenue, Floor 36 New York, NY 10022-7648 RE: The country of origin and application of the Section 301 trade remedy of a digital thermometer Dear Mssrs. Klestadt and Bodek: In your letter dated January 3, 2019, on behalf of Medisim USA, you requested a ruling on the country of origin and application of Section 301 additional duties for a digital thermometer. The digital thermometer under consideration uses a non-invasive method to sample the heat flowing from the blood vessels to the skin surface. Data obtained by pressing a probe (or sensor) against the forehead is translated into the core body temperature. Information was submitted on a representative sample from the range of Medisim USA digital thermometers, i.e., Medisim USA Fht6 Tmf Temple Touch Mini (or Model FHT6). In your request, you provided a description of the manufacturing process for the digital thermometer. The double sensor probe is produced in Israel using manufacturing steps such as the assembly of a sensor plate, a flex circuit and temperature sensors. The proprietary software is also developed in Israel. The Israeli-produced sensors/probes and software are sent to China where they are assembled with additional components such as (1) electronic and electromechanical components and (2) plastic and silicon parts. Products are then tested, labelled, inspected and packaged. With regard to your request for the appropriate country of origin of the digital thermometers, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: 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 this part; As stated in HQ 735009 dated July 30, 1993, “The country of origin is the country where the article last underwent a “substantial transformation”, that is, processing which results in a change in the article's name, character, or use”. In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.”  However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive. Assembly operations that are minimal will generally not result in a substantial transformation. In this instance, it is this office’s opinion that the Israeli-produced sensors/probes and software provide the essence of the digital thermometer. These items are not substantially changed by either the addition of the Chinese components or the minor assembly operations performed in China. The Israeli-produced sensors/probes and software contain the “enabling technology” that provides the essential operation elements for the digital thermometers to work. In view of these facts, the country of origin is Israel. In addition, the digital thermometers are not subject to the Section 301 trade remedies as provided for under 9903.88.02, Harmonized Tariff Schedule of the United States. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patricia O’Donnell at patricia.k.odonnell@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division