The country of origin and marking of a radio head unit

N315236 October 30, 2020 MAR-2-85:OT:RR:NC:N2:209 CATEGORY: Marking, Country of Origin H. Michael Leightman Ernst & Young LLP 1401 McKinney Street Houston, Texas 77010 RE: The country of origin and marking of a radio head unit Dear Mr. Leightman: In your letter dated October 14, 2020, you requested a country of origin ruling on behalf of your client, Microelectronics Technology Inc. The item concerned is referred to as the Lion Head, Remote Radio Head (“RRH”). This device is a tower-top transceiver unit for a wireless telecommunication station. It interacts with a baseband processing unit (“BBU”) on the ground to provide Long Term Evolution (“LTE”) network services. The RRH is primarily composed of two main components, the Power Amplifier Module (“PAM”) and the Radio Linearization Board (“RLB”). The RLB and the PAM form the two halves of the RRH device. The two halves are encased in separate chassis and joined together by a hinge mechanism. The device looks similar to a piece of carry-on luggage. The key components of the RLB and the PAM that allow the RRH to function properly as a transceiver for communications are their printed circuit board assemblies (“PCBAs”) and their embedded integrated circuits (“IC”). The PCBAs provide the essential character and core functionalities to the completed RRH. Under the proposed scenario, the PCBAs for the RLB and the PAM will be manufactured in Taiwan with imported or locally procured components. Then the PCBAs are shipped to China for incorporation with other components to form the RLB and the PAM, which are then assembled into the finished RRH for shipments to the US. The manufacturing process that takes place within Taiwan is as follows: Printed circuit board assemblies (PCBAs) for both the PAM and RLB modules are manufactured. Various electrical components, such as integrated circuits, are soldered/attached/mounted to printed circuit boards using Surface Mount Technology (“SMT”) or Pin through Hole (“PTH”) processes. The resulting commodities are the (PCBAs) which form the dominant component of both the RLB and the PAM modules. Next software is downloaded to each PCBA and various testing is performed. The manufacturing process that takes place within China is as follows: The Taiwanese PCBAs are first fitted with other imported or locally procured components to form the two halves of the RRH through a series of simple and manual assembly operations using glues and screw drivers. The PAM PCBA is fitted with O-Rings, electric cable and a duplexer module. Those components are assembled into a chassis which forms one half of the finished article (similar in look to one half of a suit case). The PAM module is then tested. The RLB PCBA is connected to a power supply module and electric cables. Those components are assembled into a chassis which forms the other half of the finished article. The RLB module is then tested. Finally the two halves (the PAM and RLB) are attached to each other forming the finished RRH module. A complete detailed manufacturing process explanation has been submitted. 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”. 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 PCBAs for both the PAM and RLB modules are the dominant components of this device. They do not undergo a substantial transformation as a result of the processing that takes place in China. The PCBAs have a predetermined end use when exported from Taiwan and they retain 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 Remote Radio Head device will be Taiwan 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