The country of origin of a programmable robot

N306903 November 12, 2019 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Country of Origin Cecilia Rothrock Crane Worldwide Logistics, LLC. 1500 Rankin Road Houston, TX 77073 RE: The country of origin of a programmable robot Dear Ms. Rothrock: In your letter dated October 22, 2019, you requested country of origin determination on behalf of your client, Misty Robotics. The merchandise at issue is identified as the Misty II programmable robot. The item is described a fully customizable robot that is fitted with electric motors for movement. Additionally, the Misty II features an LCD display, camera, speakers, microphone, internal memory, and a rechargeable battery. The Misty II also incorporates a variety of sensors that allow it to move freely and autonomously throughout its environment by providing obstacle avoidance, bump sensors, and capacitive touch. The robot is powered by multiple system on memory (SOM) processors running a specially designed Android operating system. Upon purchase, the Misty II exhibits pre-loaded skills such as navigation, face detection, room mapping, object and voice recognition, and adaptive personality. The unit can also be programmed to perform a wide variety of tasks or skills as desired by the end user. Each of these skills can be coded on the user’s personal computer via a number of programming languages and loaded onto the robot through a USB cable. In your request, you detail the manufacturing process of the Misty II. The manufacturing process begins in Taiwan where Taiwanese origin bare printed circuit boards are populated with the necessary electrical components to create the three logic printed circuit board assemblies (PCBAs) that will be incorporated into the robot. You state that all components are placed on the board except for the specially designed SOM chip, which will act as the functional brain of the system. The PCBAs are then shipped to Hong Kong where the SOM is added and programmed with the Android operating system. You state that Chinese origin plastic molded parts are then imported into Hong Kong along with low level subassemblies, mechanical parts, and electrical components reflecting a variety of origins. Of note are the electric motors that are of Malaysian origin, and the LCD display, speakers, camera and sensors from China. The complex assembly process of the finished robot then begins. The electronic components, including multiple sensors, speakers, a camera, USB connectors, a battery, the charging system, and the above mentioned logic boards are married together with the mechanical parts including the electric motors, heat sinks, and machined fasteners. This electronic and mechanical system is then encased within the body of the robot by assembling the plastic molded parts. The robot is then tested, packaged and shipped to destination. The “country of origin” is defined in 19 CFR 134.1(b), in pertinent part, 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.” 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).Further, 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 Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer, the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 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, “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. Regarding the country of origin of the subject programmable robot, based on the information provided it is our opinion that the assembly process in Hong Kong is substantial and complex so as to transform the assembled components into a new and different article with a name, character, and use that is distinct from the exported articles. Though the mechanical, electronic, and plastic molded components are important to the function of the robot, they lose their separate identities and become an integral part of a new article as a result of the assembly process. Therefore, based on the fact presented in this case, it is the opinion of this office that country of origin of the Misty II programmable robot is Hong Kong. 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 Luke LePage at luke.lepage@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division