The country of origin of radio frequency identification (RFID) labels

N347234 April 28, 2025 OT:RR:NC:N2:208 CATEGORY: Origin Franco Jofre Ricignuolo Miller & Chevalier 900 16th St NW Washington, DC 20006 RE: The country of origin of radio frequency identification (RFID) labels Dear Mr. Jofre Ricignuolo: In your letter dated March 31, 2025, on behalf of Guangzhou Confidex Electronics SCI, you requested a country of origin ruling. The merchandise under consideration is RFID Labels, referred to as High Frequency Labels (HF Labels), Ultra-High Frequency Labels (UHF Labels), and On Metal Labels (OM Labels). The HF labels (item # NFC PCB SLIX2) are used in secure transactions, authentication, and access control. The UHF Labels (item # Cruiser Windshield Getipass M780) are designed for supply chain and inventory management. The OM Labels (item # Silverline Micro II MR6-P FCC Zebra PN 10026764) are for use on metal surfaces and incorporate materials to prevent signal interference. Each of the subject RFID labels contains a unique identification code and is used to store and transmit data. Moreover, the subject identification labels are devices that consist of three main components: a microchip, an antenna, and an adhesive paste. There are two scenarios in question: Scenario 1: RFID Labels are assembled in China using Taiwan-origin MR6-P microchips; and Scenario 2: RFID Labels assembled in China using Malaysia-origin MR6-P microchips. As per the information provided, the microchip, model MR6-P, is manufactured in Malaysia or Taiwan. The microchip is an integrated circuit (IC) that contains non-volatile memory. During fabrication, specific programming is embedded into the microchip to handle communication protocols, which allow the labels to communicate with RFID readers by reflecting and modulating radio signals. The microchip, which includes unique identifiers, stores and transmits data. The antenna is made in China. The antenna is printed, etched, or stamped onto a non-conductive substrate, creating the structure that captures and transmits radio signals. It receives signals from an RFID reader and sends data back from the microchip. The paste, which bonds the microchip to the antenna, is produced in Germany. The paste is shipped to China. The production process for HF Labels, UHF Labels, and OM Labels includes microchip fabrication, antenna production, bonding, assembly, and final testing. The production process for the RFID labels begins with the fabrication of the microchips. These microchips are made in Malaysia or Taiwan depending on the manufacturer’s facility location. The construction of these microchips involves semiconductor manufacturing techniques, such as the creation of silicon wafers, photolithography, etching, and doping. During production, each microchip is assigned a unique identifier number or UID that can be authenticated and traced. The assembly process in China consists of the antenna material being unwound from a supply reel. Next, the Chinese antenna and the Malaysian or Taiwanese recorded microchips are inspected and cleaned in preparation for a bonding process. Then, the German paste is applied to the contact points on the antenna. Using "pick-and-place" machines, the microchips are positioned onto the antennas, and the paste is applied. After that, a curing oven is used to bond the components together, resulting in a dry inlay. The microchips are then loaded into the bonding machine in the form of a wafer. Following the curing process, the RFID labels are tested and inspected. Lastly, the completed RFID labels are re-wound onto a take-up reel for packaging. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (HQ) H301619, dated November 6, 2018. 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, 681 F.2d 778 (C.C.P.A. 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 recorded RFID microchip, which is created in Malaysia or Taiwan, depending on the manufacturer’s facility location, is the dominant component of the finished RFID labels. The assembly processes that take place in China do not result in a substantial transformation of the recorded RFID microchips. Therefore, the RFID labels would be considered a product of Malaysia or Taiwan, depending on where the RFID microchip 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 Lisa Cariello at lisa.a.cariello@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division