H304910

 HQ H304910 April 21, 2020 OT:RR:CTF:VS H304910 JMV CATEGORY: Origin Heather Jacobson, Esq. 999 Third Ave. Suite 2525 Seattle, WA 98104 RE: Country of Origin of Vehicle Lamps; Section 301 Trade Remedy; 9903.88.03, HTSUS Dear Ms. Jacobson: This is in response to your letter dated December 21, 2018, on behalf of Grakon LLC (“Grakon”). In your letter, you request a ruling pursuant to 19 C.F.R. Part 177 regarding the country of origin of Vehicle Lamps. FACTS: Grakon is a U.S. corporation with its principal place of business located in Seattle, WA. Grakon is a U.S. importer of the merchandise that is the subject of this request, and as such is authorized to file the instant request under the provisions of 19 C.F.R. § 177.24. The products at issue are three similar Light Emitting Diode (“LED”) lamps, identified as Parts 2082-003, 4289-001, and 2000-007, designed for incorporation into motor vehicles. Grakon submits that the manufacturing scenarios reviewed herein result in a substantial transformation of the articles in Mexico, and that the resulting finished lamps would therefore originate in Mexico for purposes of Section 301 tariffs. Alternatively, Grakon submits that the country of origin of the finished lamps for purposes of application of Section 301 tariffs is the country in which the LEDs are manufactured. Grakon states that each lamp model is designed for incorporation into a passenger vehicle of heading 8703, Harmonized Tariff Schedule of the United States (“HTSUS”) and that all three parts are classifiable under 8512.20.20, HTSUS, which provides for electrical lighting equipment for vehicles of subheading 8701.20 or heading 8702, 8703, 8704, 8705 or 8711. Part 2082-003: Door Dome Lamp Part 2082-003 is a dome lamp designed to be installed on the inside door of the vehicle. It consists of the following components: 1. Injection molded plastic back cover; 2. Injection molded plastic terminal support piece, to hold the Printed Circuit Board Assembly (“PCBA”); 3. Injection molded, plastic transparent dome lamp lens; 4. Injection molded plastic dome lamp reflector; 5. Brass dome lamp terminal; and 6. PCBA, including LED lights. You state that the PCBA constitutes 72.38% of the value of the component materials, including packaging. When Chinese overhead and assembly labor costs are included, the PCBA makes up 57.52% of the value of the fully assembled lamp. The PCBA will be manufactured in Mexico using LEDs manufactured in Japan and other components sourced in Mexico or elsewhere. The transparent plastic dome lamp lens will be manufactured in Mexico or in China. All other components will be purchased from manufacturers in China, where the lamp will be assembled. In China, the brass lamp terminal will be soldered to the PCBA. The remaining components will then be assembled together by hand through use of connectors on the components; no screws or other external fasteners will be required. Inspection and testing will be conducted, then the finished part will be packaged for shipment and sale. Part 4289-001: LED Dome Lamp Part 4289-001 is an LED Dome Lamp designed for installation in the back of a heavy-duty truck, to provide lighting in the sleeping area. Part 4289-001 is approximately 1.5 feet in length, and includes two separate lighting options: a direct LED dome light that shines concentrated light on a specific area, and two light pipes that diffuse LED light throughout the space. These two light sources may be used independently or in conjunction with one another. The dome light consists of an LED PCBA, and each of the light pipes is also connected to its own LED PCBA, for a total of three separate LED PCBAs within the product. The components of Part 4289-001 include: 1. Injection molded, transparent plastic dome lens; 2. Injection molded, transparent plastic side lens; 3. Injection molded plastic housing; 4. Injection molded plastic light pipes; 5. Screws for assembly of light pipes to housing; 6. The dome light PCBA, attached to an injection molded plastic back cover; 7. The light pipe PCBAs, assembled within a plastic housing; 8. Speed clips, which hold the multiple wire harnesses in a secure position; 9. Pillar clips, which mount and hold the lamp assembly to the vehicle headliner; and 10. Wiring and related connectors and electronics to connect the light pipe PCBAs to the dome PCBA so all three can connect to the vehicle electronics via one connector. The three PCBAs together constitute 56.5% of the total cost of materials for Part 4289-001. The three PCBAs make up 42.97% of the value of the completed lamp when Chinese labor and overhead is included. The PCBA will be manufactured in Mexico using LEDs manufactured in Japan and other components sourced in Mexico or elsewhere. The transparent plastic side lens will be manufactured in Mexico or in China. The speed clips and pillar clips will be purchased from manufacturers in the United States. All other components will be purchased from manufacturers in China. Part 4289-001 will be assembled in China. The component parts will be assembled with screws or other connectors, without the need for adhesive or further processing. Inspection and testing are conducted, then the finished part is packaged for shipment and sale. Part 2000-007: Exterior Marker Lamp Part 2000-007 is an exterior marker lamp for a vehicle. It consists of the following components: 1. Injection molded, plastic transparent lamp lens; 2. Washers; 3. LED wire harness assembly; 4. EVA foam gasket; 5. Rubber gasket; 6. Injection molded, chromed plastic housing; 7. Screws; 8. Washers; and 9. Epoxy. Grakon states that the LED assembly is the second highest value component, comprising 21.5% of the total materials cost. The LED assembly of Part 2000-007 represents 15.34% of the value of the final product, which includes Chinese overhead and labor. The PCBA will be manufactured in Mexico using LEDs manufactured in the United States and other components sourced in Mexico or elsewhere. Then, the PCBA with LEDs will be assembled with the wire harness in Mexico. The transparent plastic lens will be manufactured in Mexico or in China. All other components will be purchased from manufacturers in China. Part 2000-007 will be assembled in China. First, the LED wire harness electronics are encased in epoxy potting material prior to assembly with the rest of the components. The components are then assembled together using screws or self-connecting components. Inspection and testing are conducted, then the finished part is packaged for shipment and sale. PCBA Manufacturing in Mexico You state that in all manufacturing scenarios, the PCBAs for each vehicle lamp at issue will be assembled in Mexico. PCBA production in Mexico includes assembling the LEDs into the PCBA so that, once assembled, each finished PCBA will be a complete light source with fully integrated LEDs and circuitry. The PCBAs incorporated into 2082-003 and 4289-001 are manufactured using a process called Surface Mount Technology (“SMT”) while the PCBAs incorporated into 2000-007 are manufactured using an older process known as Wave Soldering. SMT is a method of manufacturing PCBAs whereby components are soldered to the surface of the PCB rather than placed into holes on the PCB. The PCBs used in this process are manufactured in “panels” of multiple PCBs connected together. Here, each panel results in 6 identical PCBAs. Plastic mechanical holders or connectors are added to the PCBA, which allow the PCBA to be connected with other interfacing components or wire harnesses in the finished product. In some cases, terminals, that provide the electrical interface to the vehicle wire harness, are hand soldered onto the PCBA at this stage of the manufacturing process. This step may also occur during the final assembly process; connection of the vehicle wire harness might also use snap-on connectors rather than soldering. For the 2000-007 Wave Soldering is used and individual components of the

When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. 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 order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, or use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process may be considered when determining whether a substantial transformation has occurred. No one factor is determinative. Substantial transformation, including the “name, character and use” test, was at issue in National Hand Tool Corp. v. United States. Therein, the Court of International Trade determined that certain mechanics’ tools did not undergo substantial transformation in the United States, and therefore, were not exempt from the marking requirements set forth in 19 U.S.C. § 1304. The court found that there was no change in name because each article as imported had the same name in the completed tool. The court also found that there was no change in character because the