The country of origin of an electronic music controller

N328027 September 20, 2022 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Country of Origin Anke Graefe Ableton AG Shoenhauser Allee Berlin 10119 Germany RE: The country of origin of an electronic music controller Dear Ms. Graefe: In your letter dated September 7, 2022, you requested a country of origin ruling. The merchandise under consideration is identified as the Push Controller, which is described as an electronic music controller used in the creation and processing of music. You state that the subject controller acts as a user interface when connected to a personal computer. When connected to the PC and while utilizing the Ableton Live software, the controller is used to create, sample, and process music as well as control lighting. The Push Controller is comprised of multiple Printed Circuit Board Assemblies (PCBA), an LCD display, and various buttons, toggles, and switches within a plastic and aluminum case. The back of the unit has multiple ports for input and output devices including USB, audio, MIDI, among others. These input and output devices can include a PC, microphone, amplifiers, and musical instruments. In your request, you describe the manufacturing process begins in Thailand with the creation of the four PCBAs, which are described as the Main PCBA, the Touch PCBA, the Audio PCBA, and the Jogwheel PCBA. You state that all four are manufactured via Surface Mount Technology (SMT). The Main PCBA houses the primary functionality of the device and is populated with the microprocessor, switches, encoders, potentiometers, and connectors. This board further directs all communication between the subsidiary boards. The Touch PCBA includes the sensors that allow for the user to interact with the device. The Audio PCBA contains the input and output connectors allowing the user to connect various devices. The Jogwheel PCBA is a small assembly enabling the jogwheel to be used to interface with the device. The PCBAs, after manufacture in Thailand, are tested for functionality before they are shipped to China for final assembly. In China, the PCBAs are mounted within the plastic and aluminum shell and various other mechanical items are added including switches, buttons, knobs, and the like. The LCD is added before the casings are screwed together and the device is cleaned and prepared for export to the United States. 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 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). 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 that “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 controller, this office is of the opinion that the four PCBAs impart the essential functional component of the finished product. Further, the process performed in China is not substantially complex in order to change the PCBA components into a new and different article of commerce. The process performed in Thailand renders the end use of the PCBAs predetermined for origin purposes. Based upon the facts presented, the country of origin of the Push Controller is Thailand. 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