The country of origin and application of the Section 301 trade remedy of two clinical digital stick thermometers.

N320589 August 6, 2021 OT:RR:NC:N:1:105 CATEGORY: Country of Origin Olga L. Torres Managing Member Torres Law, PLLC 1201 Main Street Dallas, TX 75202 RE: The country of origin and application of the Section 301 trade remedy of two clinical digital stick thermometers. Dear Ms. Torres: In your letter dated July 19, 2021, on behalf of Microlife Corporation, you requested a ruling on the country of origin and application of the Section 301 trade remedy on two models of digital stick thermometers. The items under consideration are clinical digital stick thermometers imported under model numbers MT1PK1 and MT1681. Both devices are battery-powered thermometers used to measure the body temperature of humans. Temperature readings are taken either orally or rectally. The thermometers are made of acrylonitrile butadiene styrene (“ABS”) plastic structure and a sensor probe. The sensor probe contains a negative temperature coefficient (“NTC”) thermistor to gather the temperature. On top of the thermometer is an LCD screen to display the measurement. Inside the thermometer is a printed circuit board, an integrated circuit, a battery, and passive components. The major difference between models MT1PK1 and MT1681is the manufacturing method by which the firmware is implanted and stored in the thermometers. MT1PK1 is created using the “MCU-detail process,” and MT1681 is created using the “ASIC-detail process.” The MCU-detail process is a more sophisticated process that leads to a longer manufacture time and a more expensive thermometer. In your request, you provided a description of the manufacturing process for each model of the clinical digital stick thermometers. For the model number MT1PK1, the hardware, design research, product development, and basic software creation for the finished clinical digital stick thermometer, as well as the creation of the basic custom firmware, which is later incorporated into a Chinese origin printed circuit board assembly (PCBA) is performed in Taiwan. In Vietnam, an additional advanced modification of the firmware is burned into an empty/blank chip of a Chinese-origin MCU, which is part of a Chinese printed circuit board assembly. The sensor probe is independently assembled in Vietnam from components of various countries, including a Chinese-origin sensor probe tip and a Chinese origin thermistor. The sensor probe is used to transmit a signal to the MCU microchip, which contains the advanced Vietnamese-origin firmware, that ultimately calculates the temperature. In production, Taiwan provides the hardware and design, and China provides the Chinese-origin PCBA with the empty/blank MCU, to Vietnam. In Vietnam, the additional Vietnamese enabling advanced firmware is burned into the MCU contained in the PCBA. Also, in Vietnam, the sensor probe is individually manufactured and upon completion, final assembly of the components are assembled into a plastic housing, which include the sensor probe, the loaded PCBA, battery and LCD display. Products are then inspected, tested, and packaged for retail sale. For the model MT1681, the hardware, design, research, product development and software creation for the finished clinical digital stick thermometer, including the integrated circuit assembly, as well as the firmware incorporated into the integrated circuit assembly (which enables the temperature reading), is performed in Taiwan. The integrated circuit assembly loaded with the Taiwanese firmware is sent to China for assembly into the PCBA, and upon completion is sent to Vietnam for “short-circuit point setting” which allows the PCBA to function with the thermometer. The sensor probe is assembled in Vietnam from various countries including a Chinese-origin sensor probe tip and a Chinese-origin thermistor. In production, Taiwan provides the hardware, design, and software, to Vietnam. Taiwan also provides the firmware-loaded integrated circuit to China for assembly into the PCBA, and upon completion is sent from China to Vietnam for the “short circuit point setting”. In Vietnam, final assembly into a plastic housing is made with additional components from various countries that include the Vietnamese sensor probe, firmware-loaded PCBA, battery and a Chinese origin LCD display. Products are then inspected, tested, and packaged for retail sale. With regard to your request for the appropriate country of origin of the digital thermometers, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means 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. As stated in HQ 735009 (dated July 30, 1993), “The country of origin is the country where the article last underwent a “substantial transformation”, that is, processing which results in a change in the article's name, character, or use”. In addition, the court, in United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940) and National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993), has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” 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, see Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive, see Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal will generally not result in a substantial transformation, see C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. Regarding clinical digital stick thermometer, model# MT1PK1, it is this office’s opinion that the Vietnamese-produced sensor probe, which includes the PCBA with the advanced firmware burned in Vietnam, provide the essence of the digital thermometer. The sensor probe, and advanced firmware are not substantially changed by the addition of the Chinese and Taiwanese components. The Vietnamese-produced sensor probe, and advanced firmware burned into the MCU contain the “enabling technology” that provides the essential operation elements for the clinical digital stick thermometer, model# MT1PK1, to work, see ruling HQ H259473 (dated June 30, 2015). In view of these facts, the country of origin is Vietnam. Accordingly, clinical digital stick thermometer, model# MT1PK1, is not subject to the Section 301 trade remedies as provided for under 9903.88.02, Harmonized Tariff Schedule of the United States. Regarding clinical digital stick thermometer, model# MT1681, the Taiwanese-produced firmware, which goes through the “short-circuit point setting” in Vietnam and enables the PCBA to function properly to calculate accurate temperature, provides the essential function of the digital thermometer. The ASIC microchip cannot function properly unless short-circuit point setting is completed in Vietnam, and the short-circuit point setting process allows the PCBA to function with the MT1681 Thermometer. It is our opinion, that this operation in addition to the creation of the Vietnamese sensor probe, provide the essence of the digital thermometer. The sensor probe and firmware are not substantially transformed by the Chinese components or operations, as these operations are not complex or meaningful enough and they do not render a new and different article. In view of these facts, the country of origin is Vietnam. Accordingly, clinical digital stick thermometer, model# MT1681, is not subject to the Section 301 trade remedies as provided for under 9903.88.02, Harmonized Tariff Schedule of 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 Denise Hopkins at Denise.Hopkins@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division