The country of origin of RFID Tickets

N340624 July 1, 2024 OT:RR:NC:N2:208 CATEGORY: Origin Franco Jofre Miller & Chevalier Chartered 900 16th St NWWashington, DC  20006 RE:  The country of origin of RFID Tickets Dear Mr. Jofre: In your letter dated June 10, 2024, on behalf of Confidex Incorporated, you requested a country of origin ruling. The merchandise under consideration is Confidex Radio Frequency Identification (RFID) Tickets.  The subject RFID tickets store and transmit data.  Moreover, each RFID ticket contains unique identification data (UID), which is used to verify the authenticity of each RFID ticket.  These imported RFID tickets will be used with various tracking and identification systems, such as metro cards, tickets for events, conferences, etc. The item consists of three main components: a microchip, an antenna, and an adhesive.  In Taiwan, a microchip/integrated circuit (IC) is manufactured.  This microchip stores data that will be transmitted by the RFID ticket.  The manufacturing of the microchip starts with the creation of silicon wafers, followed by the processes of photolithography, etching, and doping to construct the necessary circuitry.  During production, each microchip is assigned a unique identifier number.  The identifiers are recorded onto the microchip before it is shipped to China for final assembly into RFID tickets. The antenna, which is used for transmitting and receiving signals to and from the IC, is made in China.  After performance testing, these antennas are sent to another company within China for final assembly. The anisotropic conductive paste (ACP), which facilitates the electrical connection between the ICs and antennas without causing shorts with adjacent conductive materials, is produced in Germany.  This paste is shipped to China. The subject RFID tickets are assembled into the finished product in China.  The following steps are performed in China.  First, the antenna material is unwound from a supply reel.  Next, the antenna and the recorded microchip are inspected and cleaned in preparation for a bonding process.  After that, the ACP is applied to the contact points on the antenna.  Using "pick-and-place" machines, the microchips are placed onto the antennas where the ACP has been applied, a phase known as pre-bond (IC placement).  Then, a curing oven is used to bond the components together, resulting in a "dry inlay."  The RFID tickets are then tested, inspected, and re-wound onto a take-up reel for packaging.   Next, workers unwind the paper that will be used to encase the dry inlay and sandwich the dry inlay between two layers of paper.  After that they conduct pre-testing to ensure the integrity of the inlay before it is encapsulated. A hot melt adhesive is then applied for robust bonding and the inlay is cut and dispensed into its designated position on the adhesive-coated paper. The layers are then laminated together, securing the inlay firmly in place, producing a ticket. After lamination, the tickets undergo die-cutting, providing their final dimensions and design.  Lastly, final testing is performed, and the tickets are rewound onto a take-up reel, preparing them for distribution. 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). Based on the facts presented, it is the opinion of this office that the microchip ICs, which are made in Taiwan, contribute to the main functionality and character of the finished RFID tickets.  The primary function of the finished product is to store and transmit data, which is done by the microchip.  Furthermore, the assembly process performed in China, would not substantially transform the microchip IC of Taiwanese origin into a new and different article of commerce with a name, character, and use distinct from that of the exported good.  Accordingly, the subject RFID tickets would be considered a product of Taiwan for origin purposes at the time of importation into the United States. 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 Lisa Cariello at lisa.a.cariello@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division