N335815

N335815 November 3, 2023 CLA-2-90:OT:RR:NC:N1:105 CATEGORY: Classification; Country of Origin TARIFF NO.: 9031.80.8085 Joseph Issa Merck & Co. 126 East Lincoln Avenue Rahway, NJ 07065 RE: The tariff classification and country of origin of the SenseHub Tag Dear Mr. Issa: In your letter dated October 6, 2023, you requested a tariff classification and country of origin determination ruling. The item under consideration is described as the “SenseHub Tag” or “Tag,” which is a device designed to monitor a cow’s behavior through a proprietary algorithm that provides the farmer, via the Tag’s software, the necessary information about changes in behavior to make informed farm management decisions. This monitoring is achieved through two sensors (a temperature sensor and a MEMS accelerometer) and an infrared (IR) receiver within the Tags. The temperature sensor updates the Tag with an ambient temperature (i.e., air temperature, not the cow’s body temperature) measurement, which is used for monitoring general environmental conditions. The MEMS accelerometer gathers information on the dairy cow’s activity by sensing velocity, force, vibration (measured in three axes), and acceleration. This information is then processed and transmitted through the overall system, and used to assess the animal’s behavioral state once it reaches the cloud or farmer. Finally, the IR receiver communicates with IR transmitters located at different parts of the farm (e.g., at sorting gates) and receives a unique IR signal from the IR transmitter (2.4 GHz - 802.15.4 Zigbee protocol wireless communication hardware) identifying the Tag’s location. Once the receiver receives the location data, the Tag’s CPU aggregates this location data with other data collected by the Tag. The Tag then processes and transmits the location data in real-time back out of the Tag, specifically, to the Controller, and then to the cloud or farmer. The Tag additionally contains a central processing unit (CPU) which aggregates and filters the data from the MEMS sensor and contains a short-term memory cache for storing most data for up to 20 minutes. The transmission of data permits the overall system to know the cow’s location and (as needed) open gates or enable milking machines for the cow wearing the particular Tag. A user, on their smart device, can then view a range of reports and graphs, including ones that show how rumen activity for any specific cow wearing the Tag is affected by feeding changes, typical physiological phases (e.g., calving, lactation starting), etc. The SenseHub Tags will be imported with a belt, belt rings, full rubber weight, and installation instructions. The belt and belt rings allow the Tag to be placed around the neck of the dairy cow. The weight provides a counterbalance to the Tag to ensure the Tag falls on the cow’s neck at the best position for the wireless receipt and transmission of data. The installation instructions are provided to assist the farmer in installing the Tag around the dairy cow’s neck. The SenseHub Controller will be imported separately. Classification under the Harmonized Tariff Schedule of the United States (HTSUS), is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings and any relevant section or chapter notes. In the event the articles cannot be classified solely on the basis of GRI 1, GRI’s 2 through 6 may be applied in order, as appropriate. The Explanatory Notes to the HTSUS, while not legally binding, may also be consulted to aid in classification. The Tag is considered to be a composite good within the meaning of GRI 3. Goods classifiable under GRI 3(b) shall be classified as if they consisted of the material or a component which gives them their essential character. The Explanatory Note to GRI 3(b)(VIII), states that the factors which determine essential character will vary between different kinds of goods. It may for example, be determined by the nature of the materials or components, its bulk, quantity, weight, or value, or by the role of a constituent material in relation to the use of the goods. GRI 3(c) states that when the essential character of a composite good cannot be determined, classification is based on the heading that occurs last in numerical order among those which equally merit consideration. In your letter, you suggest the applicable subheading for the SenseHub Tag to be 8517.62.0090, HTSUS. We disagree. The item is used to determine or track the activity/location of cows. It’s a monitoring device that determines the level of physical movement/exertion. The location and activity functions are carried out by various sensors. Without the ability to identify the cow’s location and/or be able to measure the movement of the cow, there would be no need for the transmission function. In other words, the transmission of data is in service of determining a cow’s location and physical activity. It is the opinion of this office that the wireless transmission ability in heading 8517, HTSUS, merits equal consideration to the accelerometer in heading 9031, HTSUS. Consequently, classification will be determined based on the competing heading that occurs last in numerical order. Therefore, according to GRI 3(c), the applicable subheading for the SenseHub Tag will be 9031.80.8085, HTSUS, which provides for “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other instruments, appliances and machines: Other: Other.” The general rate of duty will be free. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current. Regarding the country of origin of the SenseHub Tag, the manufacturing will occur in Mexico from nine subassemblies or components originating in Mexico, Switzerland, and China. The two main subassemblies of the product are a weather-sealed plastic housing (with cover, body, and belt rings) and a printed circuit board assembly (PCBA) contained within the housing. The product’s PCBA will be assembled in Mexico, with surface-mount technology (SMT) equipment used to build up a bare printed circuit board (PCB) into a finished PCBA. Through SMT, numerous individual components will be soldered onto the bare printed circuit board to create a functional motherboard PCBA specifically designed for the Tag. At the facility in Mexico, 49 different components (including both the primary functional components discussed above such as the MEMS accelerometer, as well as secondary components such as ceramic capacitors and resistors, among other components) from numerous different countries (including the Philippines, Singapore, Taiwan, Thailand, the Czech Republic, Israel, and China) will all be surface mounted to form the finished PCBA. After physical assembly of the PCBA in Mexico, the PCBA will also be programmed in Mexico (using software developed in Israel) and tested in Mexico. This programmed PCBA becomes the “brain” of the Tag. Once the PCBA is completed in Mexico, within the same production facility it will be incorporated into the plastic housing of the final article with components from Switzerland, China, and Mexico. The product’s cover, body, and belt rings will be injection molded in Mexico from plastic raw material sourced from Switzerland. The cover will be made of IR-transparent plastic that filters incoming IR signals from IR transmitters external to the Tag and permits those signals to be received by the IR receiver on the PCBA under the cover. An NFC antenna, belt, and full rubber weight sourced from China are also added as part of the device assembly in Mexico. The belt attached to the housing serves to place the Tag around the cow’s neck, while the weight hangs from the bottom of th

is applicable. The test for determining whether a substantial transformation will occur 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, 69 C.C.P.A. 151 (1982). To determine whether a substantial transformation has occurred, CBP considers the totality of the circumstances and makes such 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.Regarding the applicability of Section 301 trade remedies, it is the opinion of this office that the PCBA surface mount technology assembly process, which includes the installation of the MEMS accelerometer and various electronic components (such as ceramic capacitors and resistors), from numerous different countries results in a substantial transformation of the components. The use of the SMT process transforms the individual components into a new and different article capable of providing force and movement data to the farmer. The addition of the Chinese NFC antenna, belt, and full rubber weight added in Mexico do not substantially transform the product. Instead, they are just additional pieces that enhance the product. Thus, the product remains a product of Mexico where the SMT was used to build the PCBA. In view of these facts, the country of origin for Section 301 trade remedies is Mexico.The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate an