The country of origin of satellite TV receivers

N318700 April 23, 2021 ORG-2 OT: RR:NC: N2:208 CATEGORY: Country of Origin H. Michael Leightman Ernst & Young LLP 1401 McKinney Street Houston, TX 77010 RE: The country of origin of satellite TV receivers Dear Mr. Leightman: In your letter dated April 2, 2021, you requested a country of origin ruling on behalf of your client, Shanghai DD&TT Electronic Enterprise Company Limited. The merchandise under consideration is satellite television receivers, referred to as “MoCA Joey 4” and “Wireless Joey 4.” Both the MoCA Joey and the Wireless Joey 4 are reception apparatus for television that are not designed to incorporate a video display or screen. The subject items are small television receivers designed to be connected to the “Hopper,” a larger television satellite receiver with a DVR tuner, within a single home. Joey receivers that are physically connected to the Hopper (through multimedia over coax alliance (“MoCA”) or a cable, are named MoCA Joey 4. Joey receivers that are connected to the Hopper wirelessly are called Wireless Joey 4. Moreover, the Wireless Joey 4 allows for Wi-Fi connection to the Hopper via wireless access point, while MoCA Joey 4 requires installation of a physical coaxial cable to the nodes to manage the transfer of programming between the Hopper and Joey. The subject receivers are each comprised of a PCBA motherboard and other structural component parts to complete the product. According to the scenario provided, the manufacturing operations of the MoCA Joey 4 and Wireless Joey 4 motherboards (PCBA) is conducted in Taiwan through a Surface-Mount technology (SMT). The SMT process of the PCBA motherboard results in multiple electronic components permanently mounted onto a raw printed circuit board (“PCB”) via various soldering techniques. Moreover, the SMT is a 20-step process for the manufacturing of MoCA Joey 4’s and Wireless Joey 4’s motherboards. This process consists of the following: PCB Loading, Solder Paste Printing (bottom side), Solder Paste Inspection (bottom side), SMT Component Pick and Place (bottom side), Reflow Oven (bottom side), Automatic Optical Inspection or “AOI” (bottom side), AOI Verification, PCB Loading (top side): Solder Paste Printing (top side), Solder Paste Inspection (top side), SMT Component Pick and Place (top side), Reflow Oven (top side), Optical Inspection (top side), AOI second Verification, PCB Unloading, Depanel, Labelling and inspection, In-Circuit Test, and Out-going Quality Check. Upon finished manufacturing procedures in Taiwan, the functional motherboards can receive and process satellite signals and are shipped to China for further assembly. Once the PCBA is manufactured and functional, the final assembly process takes place in China, where structural component parts are assembled onto the device to complete the MoCA and Wireless Joey 4s. In China, the Box Build occurs, which consists of the following steps: WIFI-test (Wireless Joey 4 only), Install Rubber Foots, Install Motherboard to Chassis, Install WIFI-antenna (Wireless Joey 4 only), Install Heatsink, Install Top Cover, Install Nuts, and Visual Inspection. After that, the units are tested, packaged, and shipped to the United States. 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 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 on the facts presented in the proposed scenarios, it is our opinion that the motherboards (PCBA) that are manufactured in Taiwan impart the essence of these finished products. The complex SMT manufacturing production of the motherboard PCBA consists of placing and soldering of numerous individual components onto a bare PCB; thereby, creating a functional motherboard PCBA results in a substantial transformation of the components to produce motherboards of Taiwanese origin. Further, the assembly process performed in China does not substantially transform the motherboards into a new and different article of commerce with a name, character, and use distinct from that of the exported good. Accordingly, the MoCA Joey 4 and Wireless Joey 4 are considered products of Taiwan for origin and marking purposes at the 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 Lisa Cariello at lisa.a.cariello@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division