H304677

 HQ H304677 April 21, 2023 OT:RR:CTF:VS H304677 RSD CATEGORY: ORIGIN George W. Thompson, Esq. Thompson & Associates, PLLC 1050 Connecticut Avenue, NW Suite 500 Washington, D.C. 20036 RE: Country of Origin of the Lexmark MS/MX and CS/CX Series Printers; Section 301 Trade Remedy Duties; Substantial Transformation; 19 C.F.R. Part 102 Dear Mr. Thompson: This is in response to your correspondence dated June 20, 2019, on behalf of Lexmark International, Inc. (Lexmark) requesting a ruling concerning the country of origin of the Lexmark’s MS/MX and CS/CX series printers for purposes of marking and whether the products would be subjection to Section 301 Trade Remedy Duties. On August 28, 2019, you made a supplemental submission via email, containing photographs and a description of the production process of the printers. A subsequent submission containing additional product information was received in an email on September 26, 2019. In another email you sent on June 21, 2021, further explanation regarding your position on the origin of the printers was provided. FACTS: The products at issue are the Lexmark MS/MX and CS/CX series of printers, which are imported into the United States from Mexico. The printers under consideration include both monochromatic and color multifunction and single-function machines. To produce the printers, various components are assembled in China to create printer subassemblies, referred to as printer transports. A printer transport consists of the basic housings and the associated structures of the printers. They are made up of items such as mechanical frames, covers, and the structures containing the printer’s contents such as the fuser (fuses toner to paper), laser scanning unit (LSU - forms the image to be printed), operator panel (OpPanel), scanner (imaging module used in multifunction devices only), power supply unit (PSU) and toner cartridges. After their assembly is complete, they will be exported to Mexico. You state that the printer transports have no functionality at the time they are imported into Mexico, in that they are unable to print, scan, copy, or do any of the other activities that will be performed by a finished printer without the installation of the Printed Circuit Board Assemblies (PCBAs). No information concerning the manufacture of the printer transports in China was provided. Extensive information was presented on the manufacture of the PCBAs in Mexico. The PCBA is a complete assembly comprising a printed circuit board (PCB) that uses Surface Mount Technology (SMT) and Pin Through Hole Technology (PTH) to incorporate components, such as transistors, resistors, integrated circuits (ICs), and capacitors. To make the PCBA, a PCB, a thin board made of fiberglass, composite epoxy, or other laminate material is used to serve as a base for the various microelectronic components. Conductive pathways are “etched” and printed onto the board, and transistors, resistors, and integrated circuits from China, Taiwan, Korea, Malaysia, or Japan are connected onto the PCB. The PCBA includes a system-on-a-chip (“SOC”) that interprets the requests from the operator panel (“OpPanel”) or a network interface. The requests to perform functions are translated by the firmware running on the SOC to a sequence of actions then commanded to each module. Firmware stated to be architected and designed in the United States, with support from Lexmark's subsidiary in the Philippines is downloaded onto the PCBA in Mexico. In addition, between 20 to 25 cables, depending on the printer model, will be connected to the PCBA and the other components of the printers, including the fuser, LSU, OpPanel, scanner, power supply, as well as other fans, sensors, and motors. Toner cartridges for testing the print quality and the paper movement will thereafter be installed. To perform the function of printing onto paper, the printers use toner that is manufactured in either the United States or Mexico. Some of the higher end printers will also undergo mechanical calibration to precisely align the paper path. The printers will then be packaged and palletized for transportation. ISSUES: What is the country of origin of the above-described Lexmark printers imported from Mexico for purposes of the application of the section 301 trade remedy duties? What is the proper country of origin marking under 19 U.S.C. 1304 for the Lexmark printers imported from Mexico? LAW AND ANALYSIS: Section 301 Duties Effective July 6, 2018, the Office of the United States Trade Representative imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. For additional information, see “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). Products of China that are classified in the subheadings enumerated in U.S. Note 20, HTSUS, continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products. When determining the country of origin for purposes of applying current trade remedies under Section 301, Section 232, and Section 201, the substantial transformation analysis is applicable. The test 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. Texas Instruments, Inc. v. United States, 69 CCPA 151, 681 F.2d 778 (1982). U.S. Customs and Border Protection (“CBP”) considers the totality of the circumstances and makes substantial transformation determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Minimal or simple assembly operations will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one, which leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (imported shoe uppers added to an outer sole in the United States were the “very essence of the finished shoe” and the character of the product remained unchanged and did not undergo substantial transformation in the United States). In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of the term “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight, under the TAA. All the components of the Generation II flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States where they were assembled into the finished Generation II flashlight. The court reviewed the “name, character and use” test in determining whether a substantial transformation had 

Section 301 DutiesEffective July 6, 2018, the Office of the United States Trade Representative imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. For additional information, see “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). Products of China that are classified in the subheadings enumerated in U.S. Note 20, HTSUS, continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products.When determining the country of origin for purposes of applying current trade remedies under Section 301, Section 232, and Section 201, the substantial transformation analysis is applicable. The test 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. Texas Instruments, Inc. v. United States, 69 CCPA 151, 681 F.2d 778 (1982). U.S. Customs and Border Protection (“CBP”) considers the totality of the circumstances and makes substantial transformation determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).Minimal or simple assembly operations will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number