H305552

HQ H305552 March 31, 2020 OT:RR:CTF:VS JMV H305552 CATEGORY: Origin Sandra Liss Friedman Barnes, Richardson & Colburn, LLP Global Trade Law 100 William Street, Ste. 305 New York, NY 10038 RE: Toner Cartridges; Country of Origin Marking; Section 301 Measures Dear Ms. Friedman, This is in response to your correspondence, dated August 7, 2019, on behalf of your client Brother International Corporation, (“BIC”). In your letter, you request a ruling pursuant to 19 C.F.R. Part 177 regarding the country of origin of certain toner cartridges. FACTS: BIC, headquartered in Bridgewater, New Jersey, imports various toner cartridges that are designed and developed in Japan. These toner cartridges are used with BIC’s stand-alone laser and multifunction printers to carry out their printing function. The toner cartridge that is the subject of this ruling is Model TN439C, which is a color toner cartridge, capable of printing approximately 9,000 pages. The TN439C is assembled in China from parts of various origins. You assert that the TN439C is similar in design to other toner cartridges and that the main component is the toner powder, which originates in Japan and is by far the single most valuable component. In support of this assertion, you provided this office with a bill of materials for the toner cartridge, which shows that the toner represents approximately 51% of the total cost of the finished toner cartridge, including labor. You also note that customers believe they are purchasing toner, not a cartridge, and refer to it as such. The toner powder formula is proprietary and confidential. You state that the toner powder at issue is an electrically charged powder made of plastic and pigment. The pigment provides the color while the plastic allows the pigment to stick to the paper when the plastic is heated and melts. You state that the melting process gives laser toner an advantage over ink in that it binds firmly to the paper fibers resisting smudges and bleeding, and provides an even, vivid tone that helps text appear sharp on the page. In addition to the toner, the finished toner cartridge contains several other components from Malaysia, South Korea, China and Japan. The blade and developer roller are sourced from outside China. These non-Chinese parts together with the Japanese toner represent 74% of the total cost of the finished toner cartridge. Conversely, Chinese parts and labor only make up 26% of the total production costs. The assembly process in China for the toner cartridge includes heat welding the developer assembly and the attachment or insertion of components to form the finished cartridge. You state that the process takes a total of 13 minutes to complete. You ask this office to find that the country of origin of the BIC toner cartridge is Japan. You state in an email with this office that you are seeking a ruling for general customs purposes. ISSUE: Whether the country of origin of the BIC toner cartridges is Japan. LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. By enacting 19 U.S.C. § 1304, Congress intended to ensure “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134). Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” 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 the marking laws and regulations. A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. United States v. GibsonThomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments, Inc. v. United States, 681 F.2d 778, 782 (1982). In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Id. at 1373. Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The Court of International Trade (“CIT”) has applied the “essence test” to determine whether the identity of an article is changed through assembly or processing. For example, in Uniroyal, Inc. v. United States, 3 C.I.T. 220, 225 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983), the court held that imported shoe uppers added to an outer sole in the United States were the “very essence of the finished shoe” and thus were not substantially transformed into a product of the United States. Further, the court noted that the attachment of the outsole to the upper was a minor manufacturing or combining process which left the identity of the upper intact. In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the CIT found that articles imported in a pre-fabricated form with a predetermined use are not substantially transformed by assembly into the final product, without more. In Energizer, the 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 of 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 CIT noted that the assembly operations were not complex and that the imported components retained their names after they were assembled into the finished Generation II flashlight. Therefore, the CIT determined that China, the source of all but two components, was the correct country of origin of the finished Generation II flashlights under the government procurement provisions of the TAA. Similarly, in HQ H009107, dated August 2, 2007, CBP found that final assembly in the United States of remanufactured cartridge subassemblies of various origins, imported in a pre-fabricated form with restored functionality, did not result in a substantial transformation. In HQ H009107, empty toner cartridges of various origins were collected, and sent to a foreign country where damaged parts were removed. After being rebuilt with a clean blade, roller and gears, the developer section was temporarily assembled with the rebuilt waste hopper and a “host” toner section, which was used repeatedly for testing purposes only. The temporarily assembled unit was tested, and then the main sub-assembly components (the developer section, the toner hopper, and the waste hopp

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. By enacting 19 U.S.C. § 1304, Congress intended to ensure “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134). Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” 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 the marking laws and regulations. A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. United States v. GibsonThomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments, Inc. v. United States, 681 F.2d 778, 782 (1982). In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the exten