H332745

 HQ H332745 January 17, 2025 OT:RR:CTF:VS H332745 RRB CATEGORY: Origin Daniel E. Waltz Squire Patton Boggs (US) LLP 2550 M Street, NW Washington, DC 20037 RE: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C. § 2511); Subpart B, Part 177, CBP Regulations; Konica Minolta Business Solutions U.S.A., Inc.; Country of Origin of Multifunction Digital Printers; Substantial Transformation Dear Mr. Waltz: This is in response to your request, dated April 27, 2023, on behalf of your client, Konica Minolta Business Solutions U.S.A., Inc. (“Konica Minolta”), for a final determination concerning the country of origin of its Minerva SSBK series multifunction digital printers (“MFPs”), pursuant to Title III of the Trade Agreements Act of 1979 (“TAA”), as amended (19 U.S.C. § 2511 et seq.), and subpart B of Part 177, U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. § 177.21 et seq.). Konica Minolta is a party-at-interest within the meaning of 19 C.F.R. § 177.22(d)(1) and § 177.23(a) and is therefore entitled to request this final determination. FACTS: Konica Minolta plans to sell its Minerva SSBK MFPs to customers in the United States, including the U.S. Government. The Minerva SSBK MFPs are multifunction digital printers intended for use in mid-to-large size offices and light Centralized Reprographic Departments (“CRDs”) as high-speed printers, black-and-white copiers, scanners, and fax machines. According to counsel for Konica Minolta, most of the product design and development of the Minerva SSBK series MFPs is conducted in Japan, and several of its most important and complex components and subassemblies will be manufactured either in Mexico or China using a number of Japanese, Thai, or Vietnamese parts. The Minerva SSBK MFPs will initially be assembled in China. Counsel for Konica Minolta explains that several assemblies of the MFPs, including more complicated or advanced assemblies, will be removed before the resulting frame is shipped to Mexico for final assembly, as well as where other Mexican-made components and assemblies will be incorporated. Assembly Process in China In China, the following subassemblies will be assembled within the Minerva SSBK MFP’s frame: The Print Head will be produced in China from the following subcomponents: a G1 lens manufactured in Japan; a G2 lens manufactured in China; a polygonal motor manufactured in China; and a laser diode manufactured in Thailand. The print head operates by reflecting a laser beam off of the lenses and onto the polygonal mirrors to produce a copied image on the photoconductor (“OPC”) drum. According to counsel for Konica Minolta, while the G1 lens is among the print head’s most technically sophisticated parts, the cost per lens is low because they are produced in such large quantities. The print head will be assembled, and then installed into a frame in China to ensure proper alignment, but it will then be removed from the frame and shipped separately to Mexico for final installation. The Drum Unit incorporates important Japanese components, including a Japanese OPC drum, which receives laser light that is reflected off the polygonal mirrors. Toner is deposited on the OPC drum and then transferred to the image transfer belt to create an image, which is then transferred from the belt onto paper. The Developing Unit also incorporates important Japanese components. It holds the printer’s developing material. The developing material consists of toner and carrier and is made in Japan. When mixed with the carrier, the toner becomes negatively charged and is attracted to the latent electrostatic image on the OPC drum, creating a visible developed image. The 2nd Image Transfer Roller Unit will be manufactured in China. It supports the image transfer belt unit. Following testing for quality checks in China, the 2nd image transfer roller unit will be removed from the MFP frame and shipped to Mexico. A new version of the 2nd image transfer roller unit will be shipped from China to Mexico for final installation into the MFP frame. Additional units that are assembled within the MFP frame in China include the toner cartridge, which is manufactured in Japan, and the sub hopper unit, waste toner box, and copyholder, which are manufactured in China. Each of these units will be removed from the frame in China after initial testing for quality checks is complete. Replacement units known as “jig units” will be attached to the frame before it is shipped to Mexico for final assembly of the MFPs. The jig units have the same shape as the original units but cannot be attached to the finished product. Instead, during production in Mexico, the jig unit is used as an exchange device to prevent the sub hopper unit, toner cartridge unit, waste toner box and copyholder inside the frame from getting dirty. Like the original units, the jig units will be manufactured in China. After final assembly in Mexico is complete, the jig units are replaced with the original units that will be part of the final MFP. Assembly Process in Mexico When shipped from China to Mexico after initial testing is complete in China, the printer’s frame houses several subassemblies, but does not include the MFP board, print head, image transfer belt unit, fusing unit, and the 2nd image transfer roller unit, which have been removed, along with three jig units -- the sub hopper unit and toner cartridge, the waste toner box, and the copyholder. It also does not include the 1500 paper feed unit. New versions of all of these subassemblies except for the image transfer belt unit, the fusing unit, and 1500 paper feed unit will be produced in China and shipped from China to Mexico for final installation. The image transfer belt unit, the fusing unit, and 1500 paper feed unit are not shipped to Mexico because new, Mexican-made versions of these units are already in Mexico for final installation into the Minerva SSBK series MFPs. The MFP Board will be manufactured in Mexico. Counsel for Konica Minolta states that the MFP board constitutes the ”brain” of the digital printer, integrating its printer and copier functions. Konica Minolta’s proprietary software was majority developed and coded in Japan. The software is loaded onto the MFP board, the solid state drive, and the mechanical controller board in Mexico. The MFP board converts an electrical signal into a digital signal and sends the signal to the print head to create an image. It will be installed into the Minerva SSBK MFPs in Mexico. The MFP board consists of the following subcomponents: CPU Board from China; Base Board from China; and Solid State Drive from Taiwan. The Image Transfer Belt Unit will be manufactured in Mexico, and includes the following subcomponents: an intermediate transfer belt manufactured in Japan, which accepts a single image created by the OPC drum to create the image that is then transferred onto paper; a transfer frame manufactured in China; a transfer roller manufactured in China; and a brush manufactured in China. The image transfer belt unit is installed into the Minerva SSBK MFP frame in China to perform initial quality checks, but it is removed before the frame is shipped to Mexico. Counsel for Konica Minolta states that the image transfer belt unit finally installed in Mexico has never left Mexico. The Fusing Unit will be manufactured in Mexico, and includes the following subcomponents: a fusing belt manufactured in China; a pressure roller manufactured in China; a heating roller manufactured in China; and a heater lamp manufactured in China. The fusing unit will be installed into a Minerva SSBK MFP frame in China to perform initial quality checks, but it will be removed before the frame is shipped to Mexico. Counsel for Konica Minolta states that the fusing unit finally installed in Mexico has never left Mexico. The 1500 Paper Feed Unit will be manufactured in Mexico. It will be installed into a Minerva SSBK MFP frame in China to perform 

CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purpose of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. Government, pursuant to subpart B of Part 177, 19 C.F.R. §§ 177.21 et seq., which implements Title III, Trade Agreements Act of 1979, as amended (19 U.S.C. §§ 2511-2518).CBP’s authority to issue advisory rulings and final determinations stems from 19 U.S.C. § 2515(b)(1), which states:For the purposes of this subchapter, the Secretary of the Treasury shall provide for the prompt issuance of advisory rulings and final determinations on whether, under section 2518(4)(B) of this title, an article is or would be a product of a foreign country or instrumentality designated pursuant to section 2511(b) of this title.Emphasis added. The Secretary of the Treasury’s authority mentioned above, along with other customs revenue functions, are delegated to the Secretary of Homeland Security via Treasury Department Order (TO) 100-20 “Delegation of Customs revenue functions to Homeland Security,” dated October 30, 2024, and are subject to further delegations to CBP (see also 19 CFR Part 177, subpart B).The rule of origin set forth in 19 U.S.C. 2518(4)(B) states:An article is a product of a country or instrumentality only if (i) it is wholly the growth, product, or manufacture of that country or instrumentality, or (ii) in the case of an article which consists in whole or in part of materials from another country or instrumentality, it has been substantially transformed into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed.See also 19 CFR 177.22(a). In rendering advisory rulings and final determinations for purposes of U.S. Government procurement, CBP applies the provisions of subpart