The country of origin of fiber optic cable assemblies

N315073 October 20, 2020 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Country of Origin Paula Connelly Sandler, Travis & Rosenberg, P.A. 100 Trade Center, Suite G-100 Woburn, MA 01801 RE: The country of origin of fiber optic cable assemblies Dear Ms. Connelly: In your letter dated October 6, 2020, you requested a country of origin ruling on behalf of your client, Time Interconnect. The merchandise under consideration with this request is identified as the FOM4 Fiber Optic Cable Assembly. The assembly consists of a length of insulated optical fibers arrayed at each end and terminated with multiple optical connectors. The cable assemblies are used for a variety of telecommunications and data communication applications. In your request, you illustrate two separate manufacturing scenarios that only differ in where the optical fibers are sourced. In scenario one, optical fibers of U.S. origin are covered with a jacketing of Chinese yarn and sent to China for further processing. In China, the ends of the fiber are exposed and adhered to the ferrule before the glue is heat cured. The connectors are then assembled onto the ends and the finished cable is tested and packaged for shipment to the United States. In scenario two, optical fibers originating from Indonesia are covered with jacketing of Chinese yarn and sent to China for further processing. In China, the ends of the fiber are exposed and adhered to the ferrule before the glue is heat cured. The connectors are then assembled onto the ends and the finished cable is tested and packaged for shipment to the United States. 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 origin of the subject assemblies, based upon the facts presented, it is the opinion of this office that the optical fibers impart the essential functional component of the finished article. While the jacketing and connectors are integral to the function of the assemblies in their finished state, we find that their addition does not substantially transform the fibers into a new and different article of commerce with a name, character, and use distinct from the exported article. The origin of the FOM4 Fiber Optic Cable assembly as described in scenario one will be the U.S. The origin of the FOM4 Fiber Optic Cable assembly as described in scenario two will be Indonesia. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the USA. 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