The classification and country of origin of a video converter

N315878 December 1, 2020 CLA-2-85:OT:RR:NC:N2:209 CATEGORY: Classification, Country of Origin TARIFF NO.: 8517.62.0090, 9903.88.15 Andy Hsu Aegis Multimedia Inc. 2F, No.21, Ln.48, Guangming St., Tucheng Dist. New Taipei, 235 Taiwan RE: The classification and country of origin of a video converter Dear Mr. Hsu: In your letter dated November 13, 2020, you requested a classification and country of origin ruling. The item concerned is a DisplayPort (DP) to Video Graphics Array (VGA) adapter/converter (part # 431071010158). This device is a signal converter used to convert a DP signal to a VGA signal. This device consists of an 8-inch long electrical cable with a male DP connector (source signal input) on one end, a female VGA connector on the other end. The housing of the VGA connector incorporates a printed circuit board assembly which is responsible for converting this signal. The adapter is used to convert the signal between a computer and a monitor. In your request you suggest that the subject converters are classified under subheading 8544.42.9090, Harmonized Tariff Schedule of the United States (HTSUS). We disagree. The requested classification is meant to cover those electrical cables used to conduct electrical or other signals. The PCBA within the subject item is designed to convert a display port signal to a VGA signal between a computer and monitor. As such, it falls outside of the terms of the requested heading and classification within subheading 8544.42.9090 is not appropriate. The applicable subheading for the DisplayPort to Video Graphics Array adapter/converter (part # 431071010158) will be 8517.62.0090, HTSUS, which provides for “Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data…: Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Other.” The general rate of duty will be Free. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current. Regarding your country of origin request, the item concerned undergoes manufacturing processes in China and Taiwan. Within China the main subassemblies are manufactured. The PCBA which forms the dominant component of this device is made using surface mount technology. During this process a bare printed circuit board is populated with various electrical elements creating a printed circuit board assembly (PCBA). That PCBA is then assembled to a VGA connector element. An 8 inch electrical cable assembly is manufactured from bulk rolls of cable and assembled with a DisplayPort connector. Various metal shells and plastic ABS shells/housings are manufactured. Within Taiwan the three subassemblies from China (8inch cable with DisplayPort connector, PCBA, metal and plastic shells) are assembled into the finished good. The PCBA will be flash programmed, the 8 inch cable assembly will be soldered to the PCBA, the PCBA will be tested, the metal and plastic shells will be added to the assembly and the finished goods will be tested and packaged. A complete manufacturing process description and explanation has been provided. 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 PCBA which is manufactured in China forms the dominant component of this adapter assembly. The flashing of the PCBA in Taiwan does not change or define the use of the finished adapter. The firmware/program itself provides the essential characteristics of performing as an adapter unit. Additionally, each of the Chinese origin subcomponents (PCBA, the 8 inch cable assembly and the various metal and plastic components) all have a predetermined end use when exported from China. The flashing and assembly processes do not change that end use. These sub-assemblies do not undergo a substantial transformation as a result of the manufacturing process that takes place in Taiwan. Therefore, since a substantial transformation does not occur as a result of the Taiwanese manufacturing/assembly process, the country of origin of the finished DisplayPort (DP) to Video Graphics Array (VGA) adapter/converter (part # 431071010158) will be China for origin and marking purposes at time of importation into the United States. Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8517.62.0090, HTSUS, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, in addition to subheading 8517.62.0090, HTSUS, listed above. The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively. 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