H337456

HQ H337456 September 3, 2024 OT:RR:CTF:VS H337456 AMW CATEGORY: Origin Center Director Electronics CEE U.S. Customs and Border Protection 1 World Trade Center Long Beach, CA 90831 Attn: Sorbrina Vilsain, Import Specialist, Electronics CEE RE: Application for Further Review of Protest No. 330323100897; Ubiquiti Inc.; Country of Origin of High-Performance Wi-Fi Bridges; Section 301 Trade Remedy Dear Center Director: This is in response to an Application for Further Review (“AFR”) of Protest Number 330323100897, timely filed on behalf of Ubiquiti Inc. (“Ubiquiti” or the “protestant”), concerning liquidation and assessment of duties pursuant to Section 301 of the Trade Act of 1974 for the entry of certain high-performance Wi-Fi bridge devices. The protestant asked that certain information submitted in connection with the protest be treated as confidential. Inasmuch as this request conforms to the requirements of 19 CFR § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets and all attachments to this ruling request, forwarded to our office, will not be released to the public and will be withheld from published versions of this decision. FACTS: The following facts are based on Ubiquiti’s protest submitted on November 8, 2023, a prior disclosure submitted the same day, and follow-up submissions provided on April 9, 2024, April 10, 2024, April 15, 2024, May 20, 2024, and July 24, 2024. Ubiquiti is an importer of various electronics, including those related to wireless data communication. On February 12, 2023, Ubiquiti entered into the United States various 5 GHz high-performance Wi-Fi bridges sold as the PowerBeam 5AC Gen2 (the “PowerBeam”) and the NanoBeam 5AC Gen2 (the “NanoBeam”) (collectively, the “products” or “devices”). Ubiquiti declared the country of origin of the imported products to be Country A [ ]. The products in the subject entry were purchased via a multi-tier transaction involving two Ubiquiti entities. Specifically, the subject products were initially purchased from [ ] (the “contract manufacturer”) located in Country A by a Ubiquiti entity based in Country B [ ] (“Ubiquiti Country B”), which then sold the merchandise to Ubiquiti, the importer of record, for importation into the United States. As such, the subject entry involves three intercompany invoices issued by a related company, Ubiquity Country B, to Ubiquiti via “Ubiquiti’s production planning portal” operated by Ubiquiti [ ] Sales Ltd. The invoices are numbered as follows: 2917691, 2917692, and 2917693, each dated December 29, 2022. The products are used by wireless internet service providers (“WISPs”) to supply wireless connectivity to their customers. The products utilize separate Wi-Fi management radios, allowing WISPs to use Ubiquiti’s proprietary airOS firmware to manage their networks. The products, which are imported as unassembled kits, are classified under subheading 8517.62.00, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for, “[t]elephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527, or 8528; parts thereof: Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wires or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching or routing apparatus….” As imported, the products consist of the following components: The PowerBeam includes: (1) dish reflector; (2) antenna feed, which houses the device’s printed circuit board assembly (“PCBA”); (3) rear housing; (4) mounting bracket; (5) four hex bolts with washers; (6) pole clamp; (7) two carriage bolts; (8) two flange nuts; (9) a power over ethernet source; and (10) a power cord. The NanoBeam includes: (1) Wi-Fi bridge (also called the NanoBeam 5AC Gen 2), which contains the device’s PCBA; (2) ball joint mount; (3) lock ring; (4) metal strap; (5) power over ethernet source; and (6) a power cord. For both products, the individual components are placed separately into the same box in which they will be sold to end-users in the United States. The raw materials and components used to manufacture the products are sourced from a variety of countries, including China, Country A [ ]), Country C [ ], and several other countries. Ubiquiti states that the components are assembled in Country A at a facility owned by the unrelated contract manufacturer. Specifically, Ubiquiti explains that the following steps occur at the contract manufacturer’s Country A facility: (1) imported components and raw materials undergo quality control; (2) device PCBA is assembled via surface-mount technology (“SMT”); (3) PCBA is assembled into the main device (i.e., the antenna feed or Wi-Fi bridge); (4) firmware (mainly developed in Country C [ ]) and operation system uploaded; and (5) packing. In a corresponding prior disclosure, Ubiquiti concedes that it had previously sourced NanoBeam and PowerBeam devices from manufacturers in China, including the Country A contract manufacturer’s Chinese affiliate, [ ]. Beginning in 2019, however, Ubiquiti claims it started shifting production from China to Country A. In an April 9, 2024, follow-up submission Ubiquiti clarified that manufacturing operations were moved out of China in stages; the production of NanoBeam and PowerBeam devices in Country A began in 2021 with the first export shipment occurring in May 2021. The last shipment of NanoBeam devices from China occurred on October 15, 2022, and the last shipment of PowerBeam devices occurred on October 31, 2022. In its May 14, 2024, submission, Ubiquiti clarified that the October shipment dates represent “the last date the Products left [ ] China, and it is not necessarily the last date the Products left China as the company still had in its inventory…certain Products manufactured by [ ] China, and those Chinese-origin products continued to ship to the United States for some time.” After reviewing the subject entry, U.S. Customs and Border Protection (“CBP”) personnel found that at least one of the products’ components was labeled as originating in China. As a result, CBP submitted to Ubiquiti three CBP Form 28 (“CF-28”) Requests for Information. First, on April 20, 2023, CBP requested product samples. Second, on May 5, 2023, CBP requested information regarding the products’ retail packaging and “documentation to support the claim of the country of origin label made in [Country A].” Third, on June 30, 2023, CBP requested information related to the pricing of the products. In response to these inquiries, Ubiquiti asserted that the products were manufactured at the contract manufacturer’s Country A facility [ ], and provided the following documents: A “Certificate of Origin” issued by the Country A Chamber of Commerce and Industry dated June 13, 2023. Purchase orders TW1023410 and TW1021589 relating to Ubiquiti Country B’s purchase of NanoBeam and PowerBeam devices from the contract manufacturer in Country A and an Excel document connecting these purchase orders to Ubiquiti invoice no. 2917692, which is one of the three intercompany invoice numbers associated with the subject entry. On May 25, 2023, CBP issued a CBP Form 29 (“CF-29”) Notice of Action informing Ubiquiti that the documentation submitted in response to the May 5, 2023, CF-28 contained insufficient evidence demonstrating the products originated in Country A. CBP warned Ubiquiti that without further information the country of origin would be changed to China. On June 16, 2023, CBP issued a CF-29 again advising Ubiquiti th

We note that this matter is protestable under 19 U.S.C. § 1514(a)(5) as a decision relating to the liquidation or reliquidation of an entry. The protest was timely filed, within 180 days of liquidation for the entry. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103(2)(B)(ii)-(iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further review of this protest is properly accorded to the importer pursuant to 19 CFR § 174.24(b) because the issues protested involve questions of law or fact, which have not been ruled upon.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 relevant Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(r), which provides in pertinent part that for the purposes of subheading 9903.88.15, products of China that are classified in the subheadings enumerated in U.S. note 20(s), shall be subject to an additional 7.5 percent ad valorem rate of duty. Products of China classifiable in subheading 8517.62.0090, HTSUS, are subject to the additional tariff under subheading 9903.88.15, HTSUS. Therefore, when determining the country of origin for applying trade remedies under Section 301, the substantial transformation analysis is applicable.A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use which differs from the original material subjected to the process. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments, Inc. v. United States, 681 F.2d 778, 782 (1982). If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a su