The country of origin and marking of organic light-emitting diode modules from South Korea

N312882 July 16, 2020 MAR-2-85:OT:RR:NC:N2:209 CATEGORY: Marking, Country of Origin Rachel Lee FNS Customs Brokers, Inc. 1545 Francisco St. Torrance, California 90501 RE: The country of origin and marking of organic light-emitting diode modules from South Korea Dear Ms. Lee: In your letter dated June 30, 2020, you requested a country of origin ruling on behalf of your client, LG Display America, Inc. The items concerned are referred to as organic light-emitting diode modules for smart watches and mobile phones (Smart Watch: LH157QA3-EM01-QWC-S, LH178QA3-EM01-QWC-S, and Mobile Phone: LH606WF1-EDA1-VM1-S, LH606WX2-SD01-UZA-S, LH646WF2-EDA1-VM1-S). Within South Korea the OLED panel is manufactured. The panel is exported to China where the finished products (OLED Modules) are assembled. The finished product is sent back to South Korea and then exported to the United States. The thin-film transistor (TFT) manufacturing and organic light emitting diode (OLED) deposition & encapsulation process, which creates the OLED panel, takes place within South Korea. The OLED panel is then sent to China. Within China a polarizer, a PCBA (drive/control circuitry), touch screen and housing/case is added to the OLED panel. A complete explanation/illustration of the manufacturing process has been submitted to CBP. 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 South Korean OLED panel, which is the dominant component of the OLED module, does not undergo a substantial transformation as a result of the processing that takes place in China. The OLED panel has a predetermined end use when it is exported from South Korea and retains that identity after the processing that takes place within China. Therefore, since a substantial transformation does not occur as a result of the Chinese processing, the country of origin of the finished OLED module will be South Korea for origin and marking purposes at time of importation into 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 Steven Pollichino at steven.pollichino@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division