The country of origin of a laser distance measurer

N308384 January 9, 2020 CLA-2-90:OT:RR:NC:N1:105 CATEGORY: Origin M. Jason Cunningham Sonnenberg & Cunningham PA 780 Fifth Ave. South Naples, FL 34102 RE: The country of origin of a laser distance measurer Dear Mr. Cunningham: In your letter dated December 16, 2019, on behalf of your client, Great Star Tools, you requested a country of origin ruling. The merchandise under consideration is identified as a laser distance measurer (“LDM”), also referred to as a laser distance measuring device. LDM’s are utilized by many different trades to accurately, quickly and conveniently measure distances. The device can replace a traditional metal measuring tape and provide additional functionality, such as calculating the area or volume of multiple measurements. The user aims the end of the LDM at an object, such as a wall, and presses the laser-on button to obtain a measurement. Nearly instantly, the LDM emits a laser beam that hits the object, bounces back to the device, and provides an accurate measurement of distance in either metric or imperial units. The device is powered by a rechargeable battery and has an inverted backlight liquid crystal display that indicates the distances and other features. The device can provide single or continuous measurements. Two prospective production scenarios were presented. In scenario one, the laser measuring device parts are made in China, Vietnam and Taiwan. In Vietnam, the electronic distance measurer (“EDM”) is constructed by combining a laser diode from Taiwan with a laser diode frame of Vietnamese origin. The laser diode and frame are then soldered to a printed circuit board (“PCB”) that was assembled in China from “globally sourced” components, to include programming code that is designed in Switzerland. You state that the Chinese PCB contains an Application-Specific Integrated Circuit (ASIC) microchip onto which firmware code is burned, but that this code will not work properly and accurately without calibration and adjustments performed in Vietnam. A Chinese origin laser lens, consisting of an emitting lens and receiving lens, is attached, then adjusted and calibrated. The emitting lens ensures that the laser beam is emitted parallel to the target, while the receiving lens ensures that the beam is focused upon its return into the detectors. A Chinese metal shielding device is added for safety and performance via soldering. After a final check, the EDM is sent from Vietnam to China. In China, final assembly is completed using Chinese parts such as the back and front shell, various rubber and plastic parts, a battery, a PCB board to connect the battery and liquid crystal display (“LCD”). This process includes soldering, final testing and calibration to ensure the EDM components are properly connected to the remaining parts without compromising its highly accurate measuring. Once assembled, the items are placed in retail packaging for final shipment to the United States. In scenario two, the same parts and processing will be completed as in scenario one except the front and back shells are of Vietnamese origin. Additionally, the final simple assembly, which includes the battery assembly, buttons, and securing the LCD to the housing, would also be completed in Vietnam. With regard to your request for the appropriate country of origin of the laser distance measurer, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: “‘Country of origin’ means 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. As stated in HQ 735009 dated July 30, 1993, “The country of origin is the country where the article last underwent a ‘substantial transformation,’ that is, processing which results in a change in the article’s name, character, and use.” In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” 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. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive. Assembly operations that are minimal will generally not result in a substantial transformation. In this instance, while the Vietnamese EDM generates and directs the LDM’s laser, the PCB with the ASIC, which has the parameter software necessary for the EDM to complete the range and distance measuring functions, are Chinese. Although the PCB’s firmware code is calibrated and adjusted in Vietnam, the basic code is already in place when the PCB arrives. Furthermore, additional parts utilized in the creation of the LDM that are necessary for the LDM to calculate the area or volume of multiple measurements are added in China. Such components include the laser lens, which allows the LDM to properly emit the laser generated by the EDM and receive information, the LCD, which allows the LDM to display the measurements and the Chinese battery, which powers the LDM. The addition of the Chinese PCB, battery, laser lens, and LCD are essential for the overall LDM to function. For scenario one, it is this office’s opinion that the Chinese components and the assembly process described in China transform the individual Vietnam components into a new and different product having a new function and purpose. In view of these facts, the country of origin for the LDM is China. In scenario two, while the back and front shell are now being sourced from Vietnam and the addition of buttons and the connection of the LCD to the housing is completed in Vietnam, the final assembly of the battery is still completed in China, as the components that contribute to the overall LDM’s function of measuring, calculating and displaying the area or volume of multiple measurements are added in China and the LDM is still constructed of predominately Chinese components. It is this office’s opinion that the simple assembly operations performed in Vietnam in scenario two, do not significantly change the function of the overall LDM or purpose of the Chinese components. In view of these facts, the country of origin of the LDM is 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 Jason Christie at Jason.M.Christie@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division