The country of origin of a gaming notebook

N307036 November 20, 2019 CLA-2-84:OT:RR:NC:N2:220 CATEGORY: Origin Regina Liu Tongfang Hong Kong Limited 2F., No.240, Sec. 1, Neihu Rd. Neihu Dist., Taipei 114 Taiwan RE: The country of origin of a gaming notebook Dear Ms. Liu: In your letter dated October 28, 2019 you requested a country of origin ruling. The merchandise under consideration is referred to as a gaming notebook and is identified as product number GK5CP6V. Upon importation, the fully functional gaming notebook features a processor, LED display, keyboard, solid-state drive (SSD), system memory, battery, wireless communication, and the various connections typical for a portable automatic data processing machine. In your request, you state the gaming notebook, which is assembled in Taiwan from parts and subassemblies of various origins, will be imported into the United States under four scenarios, which are outlined hereafter. In the first scenario, the SSD, the processor, and the system memory are manufactured in Taiwan. The balance of the components, such as the motherboard printed circuit board assembly (PCBA), the keyboard subassembly, the mechanical and metal components, the LED display module subassembly, the controller PCBA, the battery, the wireless communication PCBA, and the various fasteners and wires, etc. are manufactured in China and subsequently imported into Taiwan for assembly. In Taiwan, the assembly of the gaming notebook consists of attaching the subassemblies with screws, positioning and attaching the PCBAs, and installing the memory and SSD. As part of this operation, wires are connected to devices such as speakers, wireless communication PCBA, controller PCBA, fans, drives, etc. Once assembled, the gaming notebook is programmed with its BIOS, the operating system (OS) is installed onto the drive, and the device is thoroughly tested. In the second scenario, you state all the assembly and sourcing is the same as the first scenario with the exception of loading the OS onto the gaming notebook. In this scenario, you state the gaming notebooks are imported into the United States without an OS and it is the customer who installs this software post-importation. In the third scenario, you state the assembly and sourcing is the same as the first scenario with the exception of the origin of the motherboard and the graphics-processing unit (GPU). In this scenario, you propose that the motherboard and the GPU would be manufactured in Taiwan by surface mounting all the individual components of multiple origins onto a Chinese origin bare printed circuit board (PCB). The assembly of the remaining components and subassemblies, the loading of the BIOS and OS, and testing would occur in Taiwan. In the fourth scenario, you state the assembly and sourcing is the same as the third scenario with the exception of the origin of the bare PCB, which you state will be sourced from Taiwan. In this scenario, you propose that the motherboard will be manufactured in Taiwan by surface mounting all the individual components of multiple origins onto a Taiwanese bare PCB. The assembly of the remaining components and subassemblies, the loading of the BIOS and OS, and testing would also occur in Taiwan. 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.” The test for determining whether a substantial transformation will occur 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. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). It is the opinion of this office that the assembly operations outlined in the first two scenarios are not complex so as to substantially transform the various subassemblies, such as the motherboard PCBA, the keyboard subassembly, the LED display module subassembly, the controller PCBA, etc., into a new article with a different name, character, or use. As such, we find that the operations performed in Taiwan, as described in the first scenario, do not produce a new and different article of commerce distinct from the articles exported from China. Thus, the gaming notebook outlined in the first scenario will be considered a product of China for origin and marking purposes at the time of importation into the United States. Likewise, the gaming notebook without an installed OS, as described in the second scenario, would also be considered a product of China for origin and marking purposes at the time of importation into the United States. With regard to the gaming notebook described in the third and fourth scenarios, you describe the production of the motherboard PCBA in these scenarios as the placement and soldering of individual components onto a bare PCB, thereby creating a functional motherboard PCBA. In our opinion, the production of a PCBA in this fashion establishes the origin of the PCBA. Thus, based on the preceding scenario determinations, if the motherboard PCBA is produced in Taiwan per the third and fourth scenarios, the gaming notebook will be considered a product of Taiwan for origin and marking purposes at the 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 Karl Moosbrugger at karl.moosbrugger@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division