The country of origin and application of the Section 301 trade remedy of a digital thermometer

N310618 March 31, 2020 CLA-2-90:OT:RR:NC:N1:105 CATEGORY: Origin Lawrence R. Pilon Rock Trade Law LLP 134 North LaSalle Street, Suite 1800 Chicago, IL 60602 RE: The country of origin and application of the Section 301 trade remedy of a digital thermometer Dear Mr. Pilon: In your letter dated February 28, 2020, on behalf of Medline Industries, Inc., you requested a ruling on the country of origin and application of Section 301 additional duties for digital stick thermometers. Under consideration are three digital stick thermometers, which are each reusable, battery-powered, dual scale (Fahrenheit and Celsius), and are imported with a one-piece snap case. Model MDS9655 is a sixty-second oral digital stick thermometer, model MDS9950 is a thirty-second oral digital stick thermometer, and model MDS9952 is a thirty-second rectal digital stick thermometer. Each thermometer consists of a sensor, battery, plastic housing, LCD display, and an integrated circuit assembly consisting of electronic (e.g., a printed circuit board) and electromechanical discrete components. In your request, you provided a description of the manufacturing process for the digital stick thermometers, which is the same for all three models. The design research and product development for the finished digital thermometers, including the temperature probe, the integrated circuit and printed circuit board, as well as the creation of the custom software for later incorporation into the integrated circuit assembly, is performed in Taiwan. The Taiwanese-produced sensors/probes and software are sent to China where they are assembled with additional Chinese components including the plastic housing, LCD display, integrated circuit assembly and battery. Products are then inspected, tested, and packaged for retail sale. With regard to your request for the appropriate country of origin of the digital thermometers, 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, or use”. In addition, the court, in United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940) and National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993), 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, see Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). 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, see Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal will generally not result in a substantial transformation, see C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. In this instance, it is this office’s opinion that the Taiwanese-produced sensors/probes and software provide the essence of the digital thermometer. The sensor/probes and software are not substantially changed by the addition of the Chinese components or the assembly operations performed in China, as these operations are not complex or meaningful enough and they do not render a new and different article. The Taiwanese-produced sensors/probes and software contain the “enabling technology” that provides the essential operation elements for the digital stick thermometers to work, see ruling HQ H259473 (dated June 30, 2015). In view of these facts, the country of origin is Taiwan. Accordingly, the digital stick thermometers are not subject to the Section 301 trade remedies as provided for under 9903.88.02, Harmonized Tariff Schedule of 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 Jason Christie at Jason.M.Christie@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division