The country of origin of a graphics card and the applicability of certain trade remedies under Section 301

N327739 September 14, 2022 OT:RR:NC:N2:220 CATEGORY: Origin Robert Stang Husch Blackwell LLP 1801 Pennsylvania Ave., NW Washington, DC 20006 RE: The country of origin of a graphics card and the applicability of certain trade remedies under Section 301 Dear Mr. Stang: In your letter dated August 19, 2022, you requested a country of origin ruling on behalf of your client, PNY Technologies Inc. The merchandise under consideration is identified as the GeForce RTX 3060 Graphics Card (graphics card), which consists of a printed circuit board assembly (PCBA), a cooling fan assembly, and a cover. The graphics card is intended to be installed in the video board slot of an automatic data processing machine to provide high performance/resolution imaging and enhanced graphics display on a connected display peripheral. In your request, you describe two scenarios where the graphics card will be manufactured. In the first scenario, you state that the graphics card is manufactured in China by soldering 441 individual components, such as the GA106 graphics processing integrated circuit (IC), capacitors, resistors, various ICs, diodes, etc. onto a bare printed circuit board. In China, the PCBA is joined with a Chinese origin housing and fan assembly to form the graphics card, the graphics card is inspected, tested, programmed, and packaged for export. In the second scenario, you state that the graphics card is manufactured in China by soldering 441 individual components, such as the graphics processor IC, capacitors, resistors, various ICs, diodes, etc. onto a bare printed circuit board. In China, the PCBA is joined with a Chinese origin housing and fan assembly to form the graphics card. The graphics card is packaged for export to Taiwan, where the graphics card is inspected, tested, programmed, and packaged for export. In your letter, you suggest the country of origin for scenario one should be Taiwan, which you base on the premise that the GA106 IC is the dominant component and embodies the essence of the PCBA, where it also represents the largest value within the entire assembly. For the second scenario, we would note that the manufacturing portion is the same as the first scenario with the exception of programming the device and packaging in Taiwan. We disagree with both suggestions. 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.” The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Regarding the country of origin of the graphics card for both scenarios, in our view and based on the facts presented, the assembly of the PCBA in China by surface mounting and through hole insertion of numerous discreet components of various origins onto the bare board results in a substantial transformation of those components to produce a PCBA of Chinese origin. The GA106 IC, while recognized as the processing component, is also transformed into a new article in name, character, and use as a result of being soldered into the circuit. Furthermore, it is the opinion of this office that the addition of programming does not affect a substantial transformation of the PCBA. Thus, the GeForce RTX 3060 Graphics Card is considered a product of China for origin and marking purposes at time of importation into the United States. As a result, the graphics cards in both scenarios are subject to the additional duties applicable to products of China under Section 301 of the Trade Act of 1974, as amended, upon importation into the United States. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs and Border Protection field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” 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 Karl Moosbrugger at karl.moosbrugger@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division