The country of origin of a vaping device

N323035 December 23, 2021 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Origin Steven Zisser Zisser Customs Law Group 9355 Airway Road San Diego, CA 92154 RE: The country of origin of a vaping device Dear Mr. Zisser: In your letter dated December 1, 2021, you requested a country of origin ruling on behalf of your client, Juuls Labs, Inc. The merchandise under consideration is described as a vaping device. The subject device is comprised of a metal enclosure within which is a printed circuit board assembly (PCBA), rechargeable battery, flexible printed circuit assembly (FPCA), light bulb, and gasket. The device is designed to allow for the user to attach a cartridge containing the e-liquid to be vaporized at one end. The cartridge also acts as the heating element and mouthpiece that the user will draw the vapor through. We note that the cartridge is not imported with the device and is not subject to this request. You state in your request that there are two origin scenarios to be addressed. In each scenario, the origin of all constituent parts remain the same in that the PCBA is manufactured in Vietnam while all remaing parts are sourced from China. The PCBA, which acts as the main controller of the device, is manufactured in Vietnam through Surface Mount Technology (SMT) with various components from a variety of countries of origin. In Scenario One, after the PCBA is produced in Vietnam, it is sent to China for final assembly. In China, the PCBA is combined within the housing with the remaining components before the device is charged, tested, and packaged for export. In Scenario Two, the PCBA is manufactured in Vietnam as previously stated above. The remaining Chinese components are then shipped to Vietnam where they are assembled with the PCBA to create the finished device. The device is then charged, tested, and packaged for export from Vietnam. 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. Regarding the origin of the subject device, it is the opinion of this office that the PCBA manufactured in Vietnam imparts the essential functional component of the finished device. Further, the assembly process performed in China in Scenario One is not significantly complex in order to allow the individual components to lose their identities. Similarly, in Scenario Two the addition of the Chinese components in Vietnam would not transform the PCBA into a new and different article of commerce with a name, character and use distinct from the individual components. As such, based upon the information provided, the country of origin of the vaping device in both Scenario One and Scenario Two will be Vietnam. 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