The country of origin of a cable assembly

N331047 March 2, 2023 OT:RR:NC:N2:212 CATEGORY: Origin Ryan Supek TE Connectivity Corporation 2800 Fulling Mill RoadMiddletown, PA  17057 RE: The country of origin of a cable assembly Dear Mr. Supek: In your letter dated February 17, 2023, you requested a country of origin ruling. The merchandise under consideration, identified by part number 2358571-3, is described as a YV3 paddle card to silver cable assembly. The subject cable assembly is comprised of multiple insulated cables, including high speed data cables, ribbon cables, and low-speed power cables, bound together and terminated with specialized terminal connectors. You state that the completed cable assembly is used to connect and transmit data between a motherboard and network card within a network server. In your request, you detail three different manufacturing scenarios for the finished cable assembly. In scenario one, you state that Chinese origin copper wire is imported into Malaysia where it is insulated and wrapped with mylar tape to create a shield. Two copper drain wires are twisted around the shielded wire before it is further coated in tape. This completes the high-speed data cable portion of the assembly. Three low-speed power cables are then created in Malaysia by insulating Chinese origin copper wire. These cables are then sent to China along with Chinese origin ribbon cables to be used in the manufacture of the finished assembly. In China, the individual cables are cut to length and the ends are cut and soldered onto a connection Printed Circuit Board (PCB). The molded pieces for the connectors on each end are then assembled before the cables are taped together to complete the manufacturing process. The finished cables are then packaged for export. In scenario two, US origin copper wire is imported into China where the high-speed data cable and low-speed power cables are created using the identical procedure described above. The remainder of the manufacturing process performed in China is also identical to the description above. In scenario three, Malaysian origin copper wire is used to create the data and power cables in Malaysia. These cables are then sent to China where the remainder of the process is identical to that described within scenario one. 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 cable assemblies, it is the opinion of this office that the copper conductor from both the data cable and the power cables within the assembly imparts the essential functional component of the finished product. The conductor, regardless of the addition of insulation and connectors, produces the transmission of both power and data that is the primary purpose of the assembly. Further, the assembly process of adding the insulation and connectors is not significantly complex in order to transform the conductors into a new article of commerce.  Based upon the information provided and the relevant authorities, the country of origin of the YV3 paddle card to silver cable assembly, part number 2358571-3, will be different in each of the described scenarios. For scenario one, the country of origin will be China. For scenario two, the country of origin will be the U.S. For scenario three, the country of origin will be Malaysia. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the USA. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Luke LePage at luke.lepage@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division