The country of origin of a grounded photocell receptacle

N307509 November 27, 2019 CLA-2-84:OT:RR:NC:N2:220 CATEGORY: Origin Clifford Chi Hampton Products International Corporation 50 Icon Foothill Ranch, CA 92610 RE: The country of origin of a grounded photocell receptacle Dear Mr. Chi: In your letter dated November 8, 2019 you requested a country of origin ruling. The merchandise under consideration is identified as the Outdoor Grounded Photocell Timer, Part Number HT2062, which is described as a plastic housing containing a printed circuit board assembly (PCBA), a mechanical timer dial, LED power indicators, and a female three-pronged grounded receptacle. On the top of the subject receptacle is a 6” power cord with a male three-pronged plug where users connect to mains power. In use, the subject outdoor receptacle opens and closes the electrical circuit via the photocell and electricity is supplied to connected devices for a period of time as determined by the timer dial. In your request, you state the outdoor receptacle will be assembled in the Philippines from the PCBA, the molded plastic housing and mechanical dial components, and the power cord. You state that the PCBA, the female receptacle, the housing, and the dial are all sourced from China while the 6” power cord with male plug is sourced from the Philippines. We would note that at the time the outdoor receptacle is imported into the Philippines for the final assembly operations, the PCBA, which is manufactured in China, contains a switching relay, the photo diode, integrated circuits and additional electronic components necessary for the switching and timing functions. The assembly process in the Philippines consists of soldering the power cord and the female receptacle to the PCA, assembling the plastic dial to the housing, and mounting the PCBA inside the housing. Once the subject outdoor receptacle is assembled, it is tested and packaged for export. 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), 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.” 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). 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 that “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. In our view, the assembly of the Chinese subassemblies in the Philippines by soldering the wires and inserting the PCBA into the housing is not complex and does not effect a substantial transformation of the foreign components to produce an outdoor receptacle of Philippine origin. Furthermore, each of the Chinese subassemblies had a predetermined end-use at the time they were imported into the Philippines. As such, we find that the foreign subassemblies that make up the outdoor receptacle are not transformed in the Philippines into a new and different article of commerce with a name, character, and use distinct from the article exported. Thus, the Outdoor Grounded Photocell Timer, Part Number HT2062 is considered a product of China for origin and marking purposes 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 Karl Moosbrugger at karl.moosbrugger@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division