The country of origin of a consumer notebook

N307966 December 18, 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 consumer notebook Dear Ms. Liu: In your letter dated November 27, 2019 you requested a country of origin ruling. The merchandise under consideration is referred to as the Consumer Notebook and is identified as Product Number PF4PU1F. Upon importation, the notebook features a motherboard with its 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 notebook, which is assembled in China from parts and subassemblies of various origins, will be imported into the United States under five scenarios, which are outlined hereafter. In the first scenario, the SSD, the motherboard, and the system memory are manufactured in Taiwan. The balance of the components, such as the keyboard subassembly, the mechanical and metal components, the LED display module subassembly, the controller PCBA, the battery, the wireless communication subassembly, and the various fasteners and wires, etc. are manufactured in China. After the motherboard is produced in Taiwan by soldering the components onto a bare PCB, it is shipped to China for assembly into a functional notebook. In China, the assembly of the 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 notebook is programmed with its BIOS, the operating system is installed onto the drive, and the device is thoroughly tested. In the second scenario, you state the assembly is the same as the first scenario with the exception of the sourcing of components for the motherboard. In this scenario, you propose that all of the components that make up the motherboard are prepared and inspected in China and would be sent to Taiwan for the purpose of surface mounting all the individual components onto a bare PCB resulting in a motherboard of Taiwanese origin. Once the motherboard is produced in Taiwan, it is tested and loaded with its BIOS and subsequently sent to China for assembly into a functional notebook as described in scenario one. In the third scenario, you state the assembly is the same as the first scenario with the exception of the sourcing of the of components for the motherboard. In this scenario, you propose that all of the components that make up the motherboard are prepared and inspected in Hong Kong and would be sent to Taiwan for the purpose of surface mounting all the individual components onto a bare PCB resulting in a motherboard of Taiwanese origin. Once the motherboard is produced in Taiwan, it is tested and loaded with its BIOS and subsequently sent to China for assembly into a functional notebook as described in scenario one. In the fourth scenario, you state the assembly is the same as the first scenario with the exception of the sourcing of the of components for the motherboard. In this scenario, you propose that all of the components that make up the motherboard are prepared and inspected in Taiwan. In Taiwan, the motherboard is manufactured by surface mounting all the individual components onto a bare PCB resulting in a motherboard of Taiwanese origin. Once the motherboard is produced in Taiwan, it is tested and loaded with its BIOS and subsequently sent to China for assembly into a functional notebook as described in scenario one. In the fifth scenario, you state the assembly is the same as the first scenario with the exception of the system memory and the SSD that are not assembled into the notebook. In this scenario, you propose that the motherboard is manufactured in Taiwan by surface mounting all the individual components onto a bare PCB resulting in a motherboard of Taiwanese origin. Once the motherboard is produced in Taiwan, it is tested and loaded with its BIOS and subsequently sent to China for assembly into an incomplete notebook where the system memory and SSD are installed in the United States post-importation. 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 Chinese assembly operations outlined in each of the 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, etc., into a new article with a different name, character, or use. As such, we find that the assembly performed in China does not produce a new and different article of commerce distinct from the motherboard exported from Taiwan. Thus, the Consumer Notebook, Product Number PF4PU1F, as outlined in each of the five scenarios 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