The country of origin of ear buds from Vietnam

N310545 March 20, 2020 MAR-2-85:OT:RR:NC:N2:209 CATEGORY: Marking, Country of Origin Fiona Pan Hank Electronics Vietnam Company LTD. No.7, Street 11, Vsip Bac Ninh Urban, Industrial and Service Area, Phu Chan Commune, Tu Son Town, Bac Ninh Province, Tu Son, 16353 Vietnam RE: The country of origin of ear buds from Vietnam Dear Ms. Pan: In your letter dated March 10, 2020, you requested a country of origin and marking ruling on behalf of your client, Walgreens Co. The items concerned are Bluetooth earbuds. The earbuds are manufactured in Vietnam from electrical elements/components of Chinese origin. The manufacturing process that takes place in Vietnam is as follows: Printed circuit boards (PCB) which are manufactured in China are populated with electrical elements (i.e. capacitors, resistors, inductors, LEDs, integrated circuit chips, crystal oscillators, etc.) also from China. A process called Surface Mount Technology (SMT) is used to place and solder the electrical elements onto the PCB forming a printed circuit board assembly (PCBA). The resulting PCBA is then further manufactured by combining it with a variety of other components (i.e. drivers/speakers, microphone, battery, housing, control buttons, cable assemblies, etc.) also from China. The majority of this assembly process involves hand soldering the various components to the PCBA or other parts of the assembly. Finally, the headset is tested and packaged. A detailed explanation of all manufacturing and assembly steps has been provided. 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.” 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). 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. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). Based upon the facts presented, it is the opinion of this office that the manufacturing process that takes place in Vietnam is substantial and complex. The various components are transformed in Vietnam into a different article with a new name, character, and use. They lose their separate identities and become an integral part of a new article as a result of the manufacturing process. Accordingly, the Bluetooth ear buds are considered a product of Vietnam for country of origin and marking purposes. 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 Steven Pollichino at steven.pollichino@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division