N319959

N319959 June 29, 2021 CLA-2-90:OT:RR:NC:N3:135 CATEGORY: Classification Mr. David Stepp Crowell & Moring LLP 515 South Flower Street, 40th Fl. Los Angeles, CA 90071 RE: The country of origin and marking of certain blood pressure monitors Dear Mr. Stepp: In your letter dated June 10, 2021, you requested a country of origin and marking ruling on behalf of Health & Life Co., Ltd. A bill of materials, exploded view diagram, and manufacturing process flow chart accompanied your inquiry. A marked sample was not submitted with your request. The products under consideration are Model # WGNBPA240 (HL858CJ) blood pressure monitors (“the BP Monitors”). They are comprised of numerous components, which are sourced from China, Taiwan, and Vietnam. All components are shipped to Vietnam for assembly, function processing, and packaging. The BP Monitors contain a printed circuit board assembly (“PCBA”) produced by surface mount technology (“SMT”) in Vietnam by mounting Taiwanese and Chinese electrical components onto a Chinese-origin printed circuit board. The finished BP Monitors have several functions including: (a) detecting blood pressure; (b) measuring blood pressure; (c) processing and converting measured blood pressures into readily readable and quantifiable data measurements; and (d) displaying data measurements on the product’s screen for the user. To function as intended, each BP Monitor must undergo the following five (5) processing steps in Vietnam: (1) Firmware code burning - The firmware code is a binary code that contains the algorithms responsible for processing blood pressure detected and measured by the Taiwanese microcontroller unit (“MCU”) of the BP Monitors into readily readable and quantifiable data measurements. The firmware code is developed in Taiwan, with copies of the code distributed and kept at Health & Life’s manufacturing site in Vietnam. During the process of firmware code burning, the program code is transferred to the MCU’s memory using a burner hardware and dedicated software. The MCU is located in the assembled BP Monitor’s PCBA. (2) Heat-sealing - Heat-sealing is the process of connecting and bonding the printed circuit board (“PCB”) to the light crystal display (“LCD”) of the BP Monitor using a heat-sealing connector. During this process, specialized technicians align thermoplastic materials with the PCB and LCD and apply heat and pressure to seal the PCB and LCD together. (3) Pressure calibration - Pressure calibration involves calibrating the Taiwanese pressure sensors of the BP Monitors, so that they can accurately measure the blood pressure detected. During the process, specialized technicians calibrate and continuously monitor and fine-tune the pressure sensors to measure blood pressures between the range of 0 mm Hg to 300 mm Hg. (4) Pressure accuracy checkup - The pressure accuracy checkup involves a final testing and calibration checkup to ensure that measurements made by the pressure sensor and the BP Monitor itself meet industry standards. (5) Testing. At the end of testing, specialized technicians are required to analyze the testing results to ensure that these results meet industry standards and are optimal for the functioning of the BP Monitor. If the results do not meet industry standards and/or are not optimal, then the goods will undergo previous function processing, calibration and fine-tuning again. You state these function processing steps are all completed in Vietnam by specialized technicians who have obtained the necessary technical and engineering education and qualifications to conduct such work. Once completed, the finished BP Monitors are packaged in Vietnam for shipping and importation into the United States. COUNTRY OF ORIGIN "Country of origin" is defined in 19 CFR 134.1(b) as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part.” A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). The issue of whether a substantial transformation occurs is determined on a case by case basis. See HQ 561353, dated September 19, 2002. In this case, the printed circuit board assembly occurs in Vietnam using surface-mount technology. The blank MCUs are programmed in Vietnam using Taiwanese-origin firmware. The final assembly in Vietnam completes the BP monitors. You state the PCBA is critical to the function of the BP Monitors and imparts the essence of the finished articles. The firmware code enables the articles to read and quantify blood pressure data measurements as intended. HQ ruling H241177, dated December 3, 2013, states “the programming of a device that defines its use generally constitutes substantial transformation.” Customs and Border Protection (“CBP”) has consistently held that the assembly of components onto a printed circuit board is a substantial transformation. See HQ ruling 735306, dated December 21, 1993, wherein CBP stated: With respect to printed circuit boards, Customs has ruled that the complete assembly of all the components onto a printed circuit board was a substantial transformation of the printed circuit board because the assembly process was complex and involved a considerable amount of skill and time. See also, HQ ruling H302801, dated October 3, 2019, wherein CBP stated: The SMT [surface-mount technology] operations result in a new and different product with an overall use and function different than any one function of the individual components. Each individual component serves a particular purpose or function once incorporated into the PCBA. Prior to the SMT operations, these components are stand-alone, general use items. Based on the totality of the circumstances, we find that the SMT and programming operations performed in Vietnam substantially transform the PCBAs into products of Vietnam and the PCBAs convey the essential character of the BP Monitors. Consequently, we agree with you that the country of origin for the subject BP Monitors will be Vietnam. MARKING The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. The “ultimate purchaser” is defined in section 134.1(d), Customs and Border Protection (CBP) Regulations (19 CFR 134.1(d)), as the “last person in the U.S. to receive the article in the form in which it was imported.” If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the