The country of origin of a smart thermostat

N340187 June 10, 2024 OT:RR:NC:N1:105 CATEGORY: Origin Zachary GreenEmpowered Homes Inc., dba Mysa34 Harvey RoadSt. John's, NL A1C2G1Canada RE:  The country of origin of a smart thermostat Dear Mr. Green: In your letter dated May 17, 2024, you requested a country of origin ruling on a smart thermostat. The item under consideration is the Mysa Smart Thermostat (model MYSA BB V2-0-L) for baseboard heating, convector (short cycle), fan-forced convector (long cycle), and radiant ceiling heating. The smart thermostat is designed to be paired with a smart phone, which allows the user to adjust the setpoint temperature and schedule automatic temperature adjustments. The thermostat has an LED display and mechanical buttons to control the device. The wall-mounted thermostat measures 3.1 inches by 4.6 inches by 1.6 inches and weighs 0.44lbs. The unit can be imported individually or in a value pack of two units. The units are imported with a biodegradable bag with three wire nuts and two screws, a welcome and wiring guide, giftbox sleeve, and support tray. Manufacturing of the product occurs completely in the Philippines, transforming individual components into a packaged smart thermostat ready for consumer use. The manufacturing includes the creation of the Printed Circuit Board Assembly (PCBA) via a pick and place process using Surface Mount Technology (SMT) machining, plastic case moldings (using plastic injection molding), component assembly of the plastics and PCBAs, firmware flashing, functional and quality verification, and packaging. The in-circuit testing, high potential (Hi-POT) testing, and functional testing all occurs in the Philippines prior to packaging.  The device assembly has nine steps including 1) top level component breakdown, 2) front assembly (using adhesive, nuts and bolts), 3) control board testing (applying pressure tests and control tests for failures), 4) front PCBA assembly (heat stakes and screws), 5) power board soldering, 6) power board testing (power testing for failures and pressure test), 7) back PCBA assembly (screws and wire hookups), 8) power board Hi-POT testing (with a special Hi-POT tester), and 9) final device assembly (screw). The Chinese components include the power board, control board, power supply adapter, protective film, washers, screws, nuts, integrated circuits, transistors, resistors, capacitors, diodes, inductors, the WIFI module, labels, and tape. The components sourced from the Philippines includes the case, insulating plate, front plate, matrix, screws, integrated circuits, humidity sensor, wiring, solder, and packaging material such as cardboard, labels and sleeves. Taiwanese articles include the chip resistors, chip capacitors, ceramic capacitors, and nylon ties. Malaysian components include integrated circuits and the switch. Additionally, there are wire connectors from Canada, film capacitors from India, and adhesive from Japan. Engineering of the product occurs in Canada including supporting software, firmware and application design.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). In regard to the country of origin of the Mysa Smart Thermostat (model MYSA BB V2-0-L), it is our opinion that the assembly process performed in the Philippines is considered complex and results in a substantial transformation. The manufacturing involves an assembly process of over a hundred different parts that do not have the ability to perform as a thermostat prior to their manufacturing process. The SMT and manual assembly process takes many of the individual components and generates a working PCBA capable of reading temperature and adjusting the heating source to match the predetermined temperature setting. It is our opinion that this is a new and different article of commerce with a name, character, and use distinct from the individual components. Accordingly, the country of origin of the thermostat for marking purposes will be the Philippines, which is where the article is manufactured. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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 Jason Christie at jason.m.christie@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division