The country of origin of a programmable power supply

N308235 December 19, 2019 CLA-2-85:OT:RR:NC:N2:220 CATEGORY: Origin John Vetere OSRAM 200 Ballardvale St. Wilmington, MA 01887 RE: The country of origin of a programmable power supply Dear Mr. Vetere: In your letter dated December 10, 2019 you requested a country of origin ruling on behalf of your client, Fluence Bioengineering Inc. The merchandise under consideration is referred to as a Driver, which is a programmable power supply consisting of a heat dissipating housing, a motherboard printed circuit board assembly (PCBA), a daughterboard PCBA, and insulated wires. The Driver is said to have an output of 600 Watts and is used to supply power in lighting applications, such as LED horticulture and/or fishing lights, parking and architecture decoration lights, etc. In your request, you state the daughterboard is manufactured in Malaysia while the balance of the materials are of Chinese origin. In China, the two PCBAs and insulated wires with connectors are placed into the housing base and then shipped to Thailand. In Thailand, the power supplies are tested and then an epoxy potting compound is added to the assembly to provide electrical insulation. The process is completed with installation of the housing cover, followed by the final, extended burn-in under heavy load, quality assurance inspection and packaging. 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). In our view, the motherboard PCBA establishes the essence of a functional power supply because it is the article within the assembly that converts the electricity and supplies it to the electrical load, which in this application are the lights. The testing and addition of an insulator compound to the Chinese assembled power supply in Thailand does not substantially transform the power supply into a new and different article of commerce with a name, character, and use distinct from the article exported from China. Thus, the Driver is considered a product of the China for origin and marking purposes at time of importation into the United States. We would note that imported articles of Chinese origin may be subject to additional duties upon importation into the United States. In the interest of exercising reasonable care, you should monitor background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974 by referring to the relevant parts of the USTR and CBP websites, which are available at: https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions https://www.cbp.gov/trade/remedies/301-certain-products-china 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