H336031

H336031 AMW CATEGORY: Origin Mr. Josh Beker, Esq. Roberts & Kehagiaras LLP 2339 Commerce St. Suite 162 Houston, TX 77003 RE: Country of Origin; CATV Amplifiers; Section 301 trade remedy Dear Mr. Beker: This is in response to your request dated November 16, 2023 , on behalf of your client, Applied Optoelectronics, Inc. (“AOI”), regarding the country of origin of several models of cable television broadband (“CATV”) amplifiers for purposes of Section 301 measures. Your request, originally submitted as an electronic ruling request to the National Commodity Specialist Division, was forwarded to this office for review. FACTS: The following facts are based on the information provided in your November 16, 2023, submission and follow-up information provided on February 5, 2024, and February 16, 2024. AOI is a manufacturer and importer of fiberoptic network products servicing a wide range of end markets. You state that the physical components and characteristics of the subject products are similar to those subject to a prior ruling obtained by AOI, HQ H326574, dated June 21, 2023. Nevertheless, the locations of assembly and manufacturing for various components differ from those discussed in HQ H326574. Your request involves three different foreign-manufactured articles: 1. Quantum12 High Gain Balance Triple 1.2 GHz System Amplifier (the “HGBT”); 2. Quantum12 High Gain Dual 1.2 GHz Amplifier (the “HGD”); and 3. Quantum12 LE 1.2 GHz Line Extender (the “LE” or “Line Extender”). The HGBT and HGD are system amplifiers used by cable operators to optimize hybrid fiber-coaxial networks. The Line Extender, meanwhile, is a broadband amplifier designed to assist cable operators in evolving their HFC networks to meet subscriber demand. The HGBT offers three radio frequency (“RF”) outputs while the HGD provides two high-level outputs with an option to create a third RF output by using the optional plug-in auxiliary path signal director. Both devices are factory configured with reverse amplifiers, diplex filters, thermal compensation circuits, forward interstate pads, and equalizers to promote optimal performance. The Line Extender only offers one high-level RF output. Your request indicates that the subject system amplifiers (the HGBT and HGD) and the Line Extender have almost identical production processes with slightly different processing times and components used. Each device is comprised of a main printed circuit board assembly (“PCBA”) and other structural component parts. The HGBT and HGD models contain a Chinese-origin reverse amplifier module (i.e., the “reverse AMP”), which is a secondary PCBA used to transmit and amplify signals in the reverse path from the user end to operators. The system amplifiers and Line Extender are manufactured in a series of approximately nine steps occurring in either China or “Vietnam, Taiwan, or a country other than China.”1 In addition to describing the manufacturing steps, you provided information concerning the time it takes to conduct the various operations. The steps are as follows: Step One – Preliminary PCB Priming and SMD Process (Vietnam, Taiwan, or country other than China): the PCBA is produced by a third-party manufacturer using a two-step surface mount technology (“SMT”) and dual-in-line package (“DIP”) process. First, solder paste is applied onto the topside of a raw printed circuit board (“PCB”) and various electrical and electronic components are mounted and soldered onto the PCB to create a surface mount device (“SMD”) assembly. The SMD assembly is then inspected for imperfections and passed down the assembly line. Additional components are added to the SMD assembly via the DIP process to create the “generic” PCBA (i.e., one capable of use in a variety of amplifiers). The components added to the PCBA of each device type at this stage differ slightly. For the Line Extender, seven types of components are added: resistors, capacitors, an inductor, an RF connector, fuses, amplifier chips, wires, and power connector. For the HGD, eight component types are added: resistors, capacitors, an inductor, an RF connector, fuses, amplifier chips, wires, and power connectors. For the HGBT, seven component types are added: resistors, capacitors, an RF connector, fuses, amplifier chips, wires, and power connectors. Step Two – PCBA Setup (Vietnam, Taiwan, or country other than China): A soldering iron is used to affix the alternating current (“AC”) wires onto the PCBA as well as etched capacitors according to radio frequency (“RF”) characteristic requirements. This step results in the final completion of the main PCBA, which can be used for a variety of amplifier functions. At this stage, press-fit holes are added to the PCBA where components will be attached during later assembly stages. Following this step, the PCBA is transported to China for incorporation into the final product. 1 Once again, you indicate that the production process and steps occurring in this request are the same as those described in your prior ruling, HQ H326574, dated June 21, 2023. However, your present request removes the “full station test” described in step eight as a standalone step and integrates this test into the “packaging process.” To maintain consistency with the process as described in HQ H326574, this ruling continues to describe these processes as separate steps. 2 Step Three – Signal Path Setup (China): An AOI employee uses a screwdriver to assemble RF connectors onto the device’s chassis. The PCBA is then mounted onto the chassis with screws and soldered into place. For the HGD and HGBT units, the Chinese-origin reverse AMP module is placed onto the bottom of the chassis using a screwdriver and attached with 12 screws. The low pass filter trim module (“LPFT”) is then plugged into the reverse AMP via pins. Subsequently, a soldering iron is used to affix the RF connectors and feed-through capacitors onto the PCBA. The remaining electrical components (e.g., mirrored and non-mirrored diplexers, HPFT, system trim jumper) are added and installed onto the PCBA via push-pin assembly into the sockets pre-drilled into the PCBA during step two. For the Line Extender, no reverse AMP module is added. Instead, the PCBA is mounted onto the chassis, the metal cover is assembled onto the housing, and various pushpin accessories are attached to the PCBA (e.g., mirrored and non-mirrored diplexer and system trim jumper). Step Four – PCBA Burn-In (China): AOI tests the product’s power consumption with a 60-volt AC power input at 50 degrees celsius. The power test is intended to create a baseline reading for the assembled PCBA. The test is run at an elevated temperature to allow time for minor changes in electrical values to settle close to their final values. Step Five – Automatic Gain Control (“AGC”) Test (China): AGC is installed on many, but not all, units based on customer specification and model number. It is used to maintain the output gain at a specified level and in an active manner. Step Six – Launch Amplifier Final Assembly, Tuning, and Testing (China): The amplifier module (reverse amplifier combined with forward amplifier) is tuned to customer specifications to be functional in a Cable Television Network environment. During this stage, a technician may alter the physical characteristics of the PCBA assembled in steps one and two above. For instance, circuit traces may be modified, etched capacitors connected, and component positioning adjusted. The full extent of the changes per unit will vary by customer specifications. Following the board tuning, a metal cover is placed onto the chassis and a screwdriver used to fasten screws and tighten clamps to the metal cover. Step Seven – Full Station Assembly (China): The launch amplifier is installed in a housing along with a power supply and cables, and routed to their proper position. The full assembly is sealed using an electric screwdriver. Step Eight – Full Station Test (China): A visual inspection is p

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, HTSUS. The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(f), HTSUS. When determining the country of origin for purposes of applying Section 301 measures, the substantial transformation analysis applies. See, e.g., Headquarters Ruling (“HQ”) H301619, dated November 6, 2018. The substantial transformation 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. See Texas Instruments Inc. v. United States, 681 F.2d 778 (CCPA 1982). The issue of substantial transformation is a “mixed question of technology and customs law, mostly the latter.” 681 F.2d at 783. To determine whether a substantial transformation occurs when components of various origins are assembled into completed products, U.S. Customs and Border Protection (“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. See, e.g., HQ H311606, dated June 16, 2021. 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. The Court of International Trade interpreted the meaning of “substantial transfor