The country of origin of TFT-LCD vehicle modules

N315592 November 16, 2020 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Country of Origin Lucas Rock Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 599 Lexington Avenue, 36th Floor New York, NY 10022 RE: The country of origin of TFT-LCD vehicle modules Dear Mr. Rock: In your letter dated October 30, 2020, you requested a country of origin ruling on behalf of your client, Innolux Corporation. There are three part numbers at issue with this request, identified by part numbers DD134IA-01A, DD134IA-01B, and DD134IA-01C, and described as 13.4” FHD LCD-TFT modules. Each module consists of a TFT-LCD cell, a capacitive touch screen, source and gate Integrated Circuits (ICs), a PCBA, a flexible printed circuit (FPC) connector, and a backlight. The subject modules are designed and manufactured to be incorporated into vehicles to act as in-dash display modules. In your request, you state that the manufacturing process for all three units is identical and described as follows. In Taiwan, the TFT-LCD cell is manufactured by depositing transistors and color pigmentation on two separate glass substrates. These substrates are then combined and liquid crystals are injected between to create the finished cell. The gate and driver ICs, which are manufactured in Taiwan, are then bonded to the back of the cell. Also in Taiwan, the capacitive touchscreen is created by applying circuits and a photo-resistive coating to a glass substrate. The cell with attached ICs and touchscreen are then sent to China for final assembly. In China, the PCBA and FPC connector are added as well as the backlight, diffuser, and glass cover. Finally, the components are assembled into a metal housing, creating the finished module. 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. Based upon the information presented, it is our opinion that the components manufactured in Taiwan impart the essential functional components of the finished module. The manufacturing of the cell and touchscreen is significantly complex and renders the end use of the components predetermined. Additionally, the processes performed in China would not substantially transform either item into a new and different article of commerce. Therefore, the country of origin of the 13.4” FHD LCD-TFT modules, part numbers DD134IA-01A, DD134IA-01B, and DD134IA-01C, is Taiwan. 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