H333699

 HQ H333699 June 6, 2024 OT:RR:CTF:VS H333699 RRB CATEGORY: Origin George W. Thompson, Esq. Thompson & Associates, PLLC 1050 Connecticut Avenue, NW Suite 500 Washington, D.C. 20036 RE: Country of Origin of Lexmark MS/MX and CS/CX Series Printers; Substantial Transformation; Marking; 19 C.F.R. § Part 102 Dear Mr. Thompson: This is in response to your correspondence, dated July 11, 2023, on behalf of Lexmark International, Inc. (“Lexmark”) requesting a ruling concerning the country of origin of Lexmark’s MS/MX and CS/CX series printers for purposes of marking and the application of trade remedies. You previously requested a ruling concerning these same printers under a different proposed production scenario, and we determined in Headquarters Ruling Letter (“HQ”) H304677, dated April 21, 2023, that they were products of China for both marking and trade remedy purposes. On January 30, 2024, our office sent a request via email for additional information concerning the subject printers. On March 12, 2024, you responded to our request via email with a supplemental submission, which included photographs, flow charts, additional bills of materials for some of the subassemblies, and more detailed information about the production process of the printers and their subassemblies. You have requested that certain information submitted in connection with this ruling request be treated as confidential. In addition, you have requested that certain information identified in your supplemental submission be treated as confidential. On March 29, 2024, our office held a meeting with you and your client to discuss the scope of your confidentiality request. On April 15, 2024, you sent another supplemental submission narrowing the parameters of your confidentiality request. Inasmuch as the amended scope of your confidentiality request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. 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. You note that these are the same printers that were discussed in HQ H304677, but that Lexmark has revised the production processes in Mexico, such that the analysis in HQ H304677 is no longer applicable to the current production procedures. As with the production procedures described in HQ H304677, certain components of the subject printers 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), and power supply unit (PSU). After their assembly in China is complete, the printer transports will be shipped to Mexico. Unlike in HQ H304677, you aver that in addition to the Printed Circuit Board Assembly (“PCBA”), three of the most important subassemblies—the imaging unit (“IU”), developing unit (“DU”), and toner cartridge (“TC”)—are manufactured in Mexico. You state that “[t]he functionality of the Chinese-origin printer transports are significantly diminished with the removal of the imaging unit and the toner cartridge from them” as “[t]hey no longer have ‘all of the mechanical printing functions’ [i.e., printing, scanning, copying, etc.] incorporated in them.” The production of the printer transports in China accounts for 37% of the manufacturing time by labor hours of the printers at issue. You explain that in order for a laser printer to produce a clear and long-lasting image using small particles of toner that adhere to paper or other media, the PCBA contains software and firmware functions to control the different modules comprising the laser printer assembly. Each of what you describe as the essential subassemblies work in tandem to achieve this functionality. The printer toner is stored in a toner cartridge, which supplies the powder to a developing unit. The developing unit charges the polymer toner through triboelectric means to a specific level and applies a uniform layer of toner to the primary component of the developing unit, which is the developer roll. Subsequently, this uniform layer is transferred to the imaging unit, where its primary component, the organic photoconductor (“OPC”), presents the desired electrostatic image to the uniform toner layer, which results in the development of the final toner image on the OPC. The OPC then transfers the image onto paper or other media. 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. The printers will then be packaged and palletized for transportation. Printed Circuit Board Assemblies (PCBAs) Extensive information was presented on the manufacture of the PCBAs, the toner cartridges, the developing units, and the imaging units. As we noted in HQ H304677, the PCBA is a complete assembly comprised of 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 the 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. Conducive pathways are “etched” and printed onto the board, and transistors, resistors, and ICs 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 OpPanel or a network interface. The requests to perform functions are translated by the firmware running on the SOC to a sequence of action then commanded to each module. You state that production of the PCBA in Mexico accounts for 44% of the manufacturing time by labor hours of the finished printer at issue. Toner Cartridges and Toner You explain that the toner cartridges are produced in Mexico from components originating in Mexico, the United States and China. The toner cartridge incorporates two primary components: the paddle and tenor level assembly and the toner cartridge primary assembly. The toner powder within the toner cartridge provides a durable and lasting pigment that is easily discernible on media, such as paper. The function of the toner cartridge primary assembly is to meter known amounts of toner powder to the developing unit when called for either by mechanical means from the developing unit or when prompted by the PCBA. Developing Unit You state that the developing unit is produced in Mexico from components originating in various countries. It involves 34 separate steps and parts. These components include the Mexican-origin plastic housing, Chinese-origin paddles, Mexican-origin augers, developer rolls, toner adder rolls, cleaning blades, seals, toner, and packaging materials. You explain that the production process involves a high degree of skill and precision. The developer roll, which originates in a third country, is a highly engineered component that helps transfer powder into the

Country of Origin for Trade Remedies 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 (in