The country of origin and marking of cables

N309046 February 7, 2020 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Country of Origin; Marking Amanda Levitt Sandler, Travis & Rosenberg, P.A. 551 Fifth Avenue , Suite 1100 New York, NY 10176 RE: The country of origin and marking of cables Dear Ms. Levitt: In your letter dated January 16, 2020, you requested a country of origin and marking ruling on behalf of your client, Enphase Energy, Inc. The merchandise under consideration is identified as an AC Cable, part number 840-00387. The cable consists of an unspecified length of insulated copper conductor, terminated at each end with electrical connectors that vary depending on the specific end use. The cables are rated at 250V for a current of 20 amps. You state that the cables are used to transmit electricity from electrical panels to either a grid or a home/commercial facility. You state that the manufacturing process begins in Taiwan where individual copper wires of Taiwanese origin are bundled, extruded and insulated. This bulk, unterminated cable conductor is then shipped to China. In China, the cable is cut to length and the insulation is peeled at the ends in order to expose the individual copper strands. Chinese origin connectors are then added to the ends of the cables. The cables are then dried, laser marked, tested, and packaged for export to the United States. In your request, you suggest that the manufacturing process described above would render the country of origin Taiwan for origin and marking purposes. Based on this stance, you state that you intend to mark the goods “Product of Taiwan, Finished in China.” 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. With regard to the country of origin of the subject AC cables, based on the information provided, it is our opinion that the Taiwanese origin unterminated cable conductor imparts the essence of the finished article. The addition of the Chinese connectors, though integral to the function of the finished cable, does not substantially transform the conductor into a new and different article of commerce with a name, character, and use distinct from the exported article. Therefore, based on the facts presented in this case, it is the opinion of this office that the country of origin, for marking and origin purposes, of the AC cable, part number 840-00387 is Taiwan. You further request a ruling as to whether the suggested marking of “Product of Taiwan, Finished in China” is acceptable in this case. 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. As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain. Further, 19 CFR 134.46 states, in pertinent part, that when any reference is made to a foreign country other than the country where the good is manufactured, then there shall appear legibly and permanently in close proximity the name of the country of origin preceded by “made in,” “product of,” or other similar words. The suggested marking details two separate countries, however, the use of “product of” preceding Taiwan would make clear to the ultimate purchaser the origin of the finished cable. Based on the information provided, the proposed marking of “Product of Taiwan, Finished in China” meets the requirements set forth in 19 U.S.C. 1304 and 19 CFR Part 134 and is an acceptable country of origin marking for the subject AC cables. 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