H311606

 HQ H311606 June 16, 2021 OT:RR:CTF:VS RSD H311606 CATEGORY: ORIGIN Damon V. Pike, Esq. BDO 1601 Forum Place, 9th Floor Centurion Plaza West Palm Beach, FL 33401 RE: Country of Origin of the Wacom Cintiq Pro 16 Drawing Tablet; Section 301 Measures Dear Mr. Pike: This is in response to your correspondence, dated June 11, 2020, on behalf of your client, Wacom Technology Corporation, (“WTC”). In your letter, you have requested a ruling pursuant to 19 C.F.R. Part 177 regarding the country of origin of the Wacom Cintiq Pro 16 drawing tablet. FACTS: The merchandise under consideration is identified as the Wacom Cintiq 16 with Pro Pen 2 (Cintiq 16). The Cintiq 16 is a device known as a drawing tablet, and it is described as a multifunctional device that has a liquid crystal display (LCD) with a touch screen that operates in conjunction with automatic data processing (ADP) machines. Therefore, the Cintiq 16 does not operate as a stand-alone unit. The user of the Cintiq 16 can make professional drawings and images, such as animations and industrial designs, and is able to draw directly onto the LCD screen by using a specialized stylus, a pen-like drawing apparatus stylus. The Cintiq 16 only functions as a drawing tablet and does not perform any other operations. The product is comprised of an LCD display module, front and back cover assemblies, and various printed circuit board assemblies (PCBAs). When it is sold to the consumer, the Cintiq16 is retail packaged with a power adapter, specialized cables, and the stylus pen. The Cintiq 16 contains technology that allows the tablet to capture each pen stroke pressure, and permits the tablet to tilt digitally to replicate the use of a pencil, paintbrush, etc. The stylus pen imported with the Cintiq 16 interacts with the tablet’s pressure-sensitive features to let the user determine how thick or thin a line should be by instantly capturing handwritten notations. The tablet wirelessly interacts with the stylus pen by plotting its location in microseconds as it makes the user’s edits onto the screen. Once the Cintiq 16 is connected, the display image from the ADP machine’s monitor is duplicated on the Cintiq 16 LCD. Thus, the LCD screen on the Cintiq 16 tablet functions as a secondary display while users create and/or edit content via the touch surface. Likewise, users have the capability to interact with their project and can visualize the results via an ADP machine’s display output. To perform its functions, the Cintiq 16 uses four PCBAs which are the electro-magnetic resonance (EMR) board, the keypad board, the scaler board, and the sensor control board (SCB). In New York Ruling Letter (NY) N308714, dated January 23, 2020, we considered the country of origin of a previous version of the Cintiq 16 that was produced with a different production process. The manufacturing process for making the new Cintiq16, SKU DTK-1660/KO-AB and KO-AC has now been changed. In NY N308714, three of the four PCBA boards contained in the device, the EMR board, the keypad board, and the scaler board were made in China, and only the SCB PCBA was manufactured in Taiwan. Now, WTC will populate two additional PCBA’s, the scaler board and the keypad board with components using Surface Mount Technology (“SMT”) in Taiwan instead of China. This means that under the new proposed production scenario, the keypad board, scaler board, and SCB will be produced in Taiwan instead of China. The first two stages of production of the Cintiq 16 involves manufacturing two subassemblies in China, which are identified as the back-cover module and the front-cover module. The back cover module contains air vents inside the plastic cover, a pen tag and two small rubber anti-rolling strips on the external body of the plastic cover. The assembly of the front-cover module consists of (1) placing glass on the plastic cover; (2) attaching the LCD panel behind the cover; (3) attaching the EMR board behind the LCD panel; and (4) placing the open cells and the backlight behind the cover. The Chinese-origin back-cover and front-cover modules will then be shipped to Taiwan together with the stylus pen, pen holder, AC adaptor, and a power cable. In addition, the following three bare Printed Circuit Boards (“PCBs”) (bare SCB PCB, bare scaler board PCB, and bare keypad board PCB) will be shipped to Taiwan for further manufacturing into the finished PCBAs through SMT. In Taiwan, the SMT processes will be used to populate each of the bare PCB’s boards with the various electronic components so that they will become fully built PCBAs. Upon completion of the SMT processes, Japanese-origin WTC tablet firmware will be installed on the SCB and Taiwanese-origin scaler board firmware will be installed on the scaler board. The scaler board is attached to the front-cover module. The SCB is attached to the LCD panel in the front-cover module so that it can sense and capture each pen stroke’s pressure on the bare EMR board. Without the SCB underlying it, it is claimed that the EMR board will not function as a sensor. The keypad board is also assembled to the front-cover module, and it is interconnected to the scaler board with cables to allow the transmission of signals and to function as a complete unit. The back-cover module is then combined with the front-cover module with screws. Counsel contends that the EMR board is a simple PCB board with tiny magnetic sensor coils, and it has no electronic components on it. It is attached behind the LCD screen to allow the sensor coils to magnetically capture each pen stroke. Counsel also claims that the SCB monitors the movement of the sensor coils attached on the EMR board, and that it recognizes each pen stroke, the pen’s location, pressure, and speed, and that it transmits these interpreted, digitized input signals to the output unit, i.e., the scaler board. In addition, counsel states that the role of the scaler board is as an output unit that generates images on the LCD screen. The scaler board has the highest number of components among the four different PCBAs. While the scaler board is responsible for producing the images on the LCD screen, as an alternative the consumer/artist can still use the Cintiq 16 tablet without the LCD screen, since the user can always view drawings produced on a connected external monitor. The fourth and final PCBA in the Cintiq 16 is the keypad board (called the “power switch”). It is responsible for directing power currents in the Cintiq 16 tablet. It functions basically as an on and off switch. ISSUE: What is the country of origin of the subject Cintiq 16 drawing tablet? LAW AND ANALYSIS: The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). See Section XXII, Chapter 99, Subchapter III, U.S. Note 20(r), HTSUS. The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(s)(i), HTSUS. When determining the country of origin for purposes of applying 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, 681 F.2d 778 (CCPA 1982). In deciding 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. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will

The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). See Section XXII, Chapter 99, Subchapter III, U.S. Note 20(r), HTSUS. The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(s)(i), HTSUS. When determining the country of origin for purposes of applying 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, 681 F.2d 778 (CCPA 1982). In deciding 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. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, 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. 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 actua