The country of origin of TFT display modules

N307348 November 25, 2019 CLA-2-90:OT:RR:NC:N2:212 CATEGORY: Country of Origin William Maloney Sandler, Travis & Rosenberg, P.A. 551 5th Avenue, Suite 1100 New York, NY 10176 RE: The country of origin of TFT display modules Dear Mr. Maloney: In your letter dated November 4, 2019, you requested a country of origin ruling on behalf of your client, Kyocera International, Inc. The merchandise under consideration is identified as the Kyocera TFT Display Module, model T-57645GD089H-T-AEN. You state that the subject module is meant to be incorporated into various LCD displays within the automotive industry. The specific display into which they will be incorporated is determinant upon the needs of the customer. The module is comprised of an LCD-TFT cell, a printed circuit board assembly (PCBA), Integrated Circuits (ICs) with driver and control electronics, and a flexible printed circuit for connection to the ultimate display unit. You state that the manufacturing process begins in Taiwan with the manufacture of the TFT-LCD cell. This process begins with transistors being applied to a glass substrate followed by the application of a photo-resistive coating. The substrate is then exposed to light and etched before a color filter and polyimide layer are added. Liquid crystals are then dispensed onto the panel. These steps create a multi-cell panel that is then scribed and cut into individual cells, either in Taiwan or upon importation to China. In China, a polarizer is added along with the flexible printed circuit meant for connection. The driver and control ICs are then bonded to the cell and a backlight unit is added to complete the module. 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 TFT display module, based on the information provided it is our opinion that the TFT-LCD cell manufactured in Taiwan imparts the essence of the finished module. The complex manufacturing process that includes the addition of the transistors, color filter, and liquid crystals would render the end-use of the cell predetermined, as it could not be used for any other purpose than that of a display. Further, the assembly process performed in China, would not substantially transform the cell into a new and different article of commerce with a name, character, and use distinct from that of the exported good. Therefore, based upon the fact presented with this case, it is the opinion of this office that the country of origin of the Kyocera TFT Display Module, model T-57645GD089H-T-AEN, is Taiwan. 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