The country of origin and marking of a mobile phone

N307288 November 21, 2019 MAR-2-85:OT:RR:NC:N2:209 CATEGORY: Marking, Country of Origin Myron Paul Barlow, Esq. Barlow & Co., LLC. Attorneys at Law 550-M Ritchie Highway, Suite 114 Severna Park, MD 21146 RE: The country of origin and marking of a mobile phone Dear Mr. Barlow: In your letter dated October 23, 2019, you requested a country of origin marking ruling on behalf of your client, ZTE USA, Inc. The product that is the subject of this country of origin ruling request is the ZTE mobile phone (model # Z3351S). ZTE is planning to manufacture the phone wholly within either India, Vietnam, Thailand, Philippines or Taiwan. The manufacturing process will take place within a single country. The Z3351S mobile phone will be made by skilled, trained labor using approximately 247 components. The components will be sourced from Taiwan, China, and other countries. The production process includes surface mounting of electrical components on printed circuit boards (PCB) to make the printed circuit board assembly (PCBA) or motherboard, further robotic processing of the PCBA, downloading software, mechanical assembly, testing, inspection, and packing. All of these operations will occur in a single country. The manufacturing process is as follows: Blank 2 sided printed PCBs are printed with solder paste. The boards then proceed to the pick and place machine where electrical components (resistors, capacitors, inductors, transistors, diodes and various microchips) are added to the PCB. The PCBs are conveyed to a reflow solder oven that bonds the component leads to the solder pads on the board. The boards are inspected using an Automated Optical inspection (AOI) machine and then cut to size and shape. The boards then undergo software calibration and Wi-Fi/Bluetooth testing. The PCBA is then assembled with all the other components of the mobile phone (i.e. motor, LCD, receiver assembly, speaker, cameras, touch panel, housing, etc.). Finally, the item under goes testing and packaging. A detailed explanation of all manufacturing and assembly steps has been provided. 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, it is the opinion of this office that the country of origin will be the country where the last substantial transformation occurs. As stated in the ruling request all of the detailed manufacturing steps take place within a single country (India, Vietnam, Thailand, Philippines or Taiwan). Accordingly, the country of origin for marking purposes will be either India, Vietnam, Thailand, Philippines or Taiwan, depending upon where the mobile phone is manufactured. 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