The country of origin of deep tissue laser therapy units

N323181 January 6, 2022 CLA-2-90:OT:RR:NC:N3:135 CATEGORY: Country of Origin Mr. Steven B. Zisser Zisser Customs Law Group 9355 Airway Rd. San Diego, CA 92154 RE: The country of origin of deep tissue laser therapy units Dear Mr. Zisser: In your letter dated December 10, 2021, you requested a country of origin on behalf of DJO Global, Inc. The products under consideration are LiteCure Deep Tissue Laser Therapy Units used by both doctors and veterinarians to treat acute and chronic conditions. They are designed for the treatment of pain in different areas of the body, such as neck, shoulder, elbow, back, etc. The lasers used in all the LiteCure Laser Therapy Units are Class 4 lasers, also known as High Intensity Lasers (HIL) with power of 500 mW and more. Each Laser Therapy Unit consists of essentially two main modules that make a complete laser therapy system: a laser module sub-assembly (laser module), which provides the light source needed for laser therapy, and a beam delivery assembly (hand piece), which is the laser light delivery system. The laser module sub-assembly consists of five laser diodes (10W, 980nm), two laser diodes (4W, 808nm), one aiming laser, one power printed circuit board assembly (PCBA), one communication PCBA, one touch screen display PCBA, a touch screen display module, four fans, a power supply, a plastic housing unit, and a power cord. The laser diodes originated in Germany. The aiming laser, power PCBA, and communication PCBA are products of the United States. The touch screen display module is made in Taiwan. The rest of the items are made in China. The beam delivery assembly (hand piece) consists of one fiber optic cable, one electrical switch, one transmission PCBA, one Bluetooth PCBA, one interface PCBA, two optical lenses, and one plastic housing. The fiber optic cable, optical lenses, and three PCBAs are products of the United States. The electrical switch and plastic housing are products of China. In China, U.S. firmware is loaded in the three PCBAs (communication PCBA, touch screen display PCBA, and Bluetooth PCBA). The touch screen display, fans, power supply, PCBAs, metal brackets, and aiming laser are screwed and attached inside the laser module housing. The packaged laser diodes are mounted to a heatsink and are connected via power cables to the power PCBA inside the unit. They are not mounted onto a PCBA. Electrical wiring is performed to connect all the laser module components together. Initial testing is performed to make sure the laser module is assembled correctly. Once passed, the laser module is closed. A protection coating is added to the optical lenses. The lenses, PCBAs, and metal parts are installed inside the handpiece module housing. Electrical wiring is performed to connect all the handpiece module components together. Initial testing is performed to make sure the handpiece module is assembled correctly. Once passed, the handpiece module is closed. The assembled therapy unit (laser module + handpiece) undergoes final testing and quality control. You state that two sub-assemblies have their own purpose within the unit. However, the laser module sub-assembly is the most critical as it is where the source of the light originates. The light source used in the therapy treatment is generated exclusively by several laser diodes located in the laser module sub-assembly, which is the exclusive function of the therapy laser unit. COUNTRY OF ORIGIN "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.” 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). 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). The issue of whether a substantial transformation occurs is determined on a case-by-case basis. See HQ 561353, dated September 19, 2002. In reaching its country of origin determinations, the Court of International Trade has also looked at the essence of an article to determine whether its identity has been substantially transformed through assembly or processing. For example, in Uniroyal, Inc. v. United States, 3 CIT 220, 225, 542 F. Supp. 1026, 1030 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983), the court held that imported shoe uppers added to an outer sole in the United States were the “very essence of the finished shoe” and thus the character of the product remained unchanged and did not undergo a substantial transformation. See also National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Similarly, in National Juice Products Association v. United States, 10 CIT 48, 61, 628 F. Supp. 978, 991 (1986), the court held that imported orange juice concentrate “imparts the essential character” to the completed orange juice and thus was not substantially transformed into a product of the United States. In this case, the assembly operations performed in China are not complex as most of the work involves a simple attaching and assembling of the components by hand, the wiring of the electrical components, and testing. The foreign components, such as the laser diodes, PCBAs, touch screen display, and optical fiber cables, are imported with a predetermined function and use and do not undergo a change in name, character, or use as a result of the assembly of the components into a finished therapy unit. In addition, the downloading of firmware generally, by itself, does not result in a substantial transformation of the PCBAs. Therefore, the assembly process performed in China is merely a simple assembly and the foreign components are not substantially transformed. Next, we need to find the essence of the complete laser therapy unit to determine whether its identity has been substantially transformed through assembly or processing. Based on the information provided, the laser diodes are the most expensive of the component materials. You explain that the sole and single function of the LiteCure Laser Therapy Unit is to heal and treat damaged tissue through a beam of laser light. The laser light is exclusively generated by the laser diodes. The amount of laser diodes in the complete unit is what controls the desired light power output, which is one of the two determining factors in therapeutic effectiveness. More diodes provide more output power. The PCBAs simply communicate instructions based on user selection, control the intensity of the laser, and power the laser on/off. They merely provide the ancillary and subordinate function (i.e., power on/off and modulate the light intensity control). The essence of the therapy laser unit is the light source, which provides the main function and use of the complete unit. As explained above, we find that the laser diodes do not undergo a substantial transformation as a result of the assembly process in China. Consequently, we agree that the country of origin of the LiteCure Laser Therapy Unit will be Germany. 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 Fei Chen at fei.chen@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division