The country of origin and marking of heat sinks from Vietnam

N303040 March 14, 2019 MAR-2-85:OT:RR:NC:N2:209 CATEGORY: Marking, Country of Origin Steven M. Stolarz BDP International, Inc. 1010 Knox Street Torrance, CA 90502 RE: The country of origin and marking of heat sinks from Vietnam Dear Mr. Stolarz: In your letter dated February 5, 2019, you requested a country of origin ruling on behalf of your client, LTI Holdings Inc. dba Boyd Corporation. The items under consideration are heat sinks designed to cool the main central processing unit (CPU) chips within a computer tray module. As the CPUs are handling dynamic workloads, heat is being generated and must be removed to maintain reliable operation. The items concerned draw the heat generated by an electrical component, and distribute it away. Two different versions of essentially the same product are being considered, one slightly smaller than the other, referred to here as "small" and the "medium" units. The final product is comprised of three main components: 1) An aluminum base manufactured in Vietnam 2) Aluminum fins manufactured in Vietnam 3) Copper heat pipes manufactured in China The finished product works by dissipating heat via the finned components. The design of the finned component allows for maximum surface area exposure. As airflow moves over/around/through the fins, heat is drawn out and dissipated into the environment. These fins could be attached directly to an electrical item, which is the source of the heat providing a degree of heat dissipation. However, the product at hand uses the copper heat pipes to transfer the generated heat to multiple finned components. In Vietnam, the aluminum base, the aluminum fins, the copper pipes and various minor parts, such as connectors, spacers and washers (of Vietmaese origin), are assembled into the finished heat sink. The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. The “country of origin” is defined in 19 CFR 134.1(b) 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.” For tariff purposes, the courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). 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. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). Based upon the facts presented and the pertinent authorities, it is the opinion of this office that the aluminum fins, which are of Vietnamese origin, impart the essential character to the heat sink. The assembly processes that take place in Vietnam to create the finished heat sink would not be considered a substantial transformation. Each component has a predefined use and function; that use and function is not changing as a result of the assembly process in Vietnam. Therefore, based on the last country of assembly, and that the aluminum fins impart the essential character, it is the opinion of this office that the country of origin of the finished heat sinks is Vietnam and should be marked accordingly at time of importation into 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 Steven Pollichino at steven.pollichino@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division