N346168

N346168 March 17, 2025 OT:RR:NC:N2:201 CATEGORY: Origin Byeoung Ho Park SEIN Customs & Auditing Corp 138, Seoun-ro, Seocho-gu Seoul 06619 South Korea RE: The country of origin of Main Beam Module Assemblies from Mexico Dear Mr. Park: In your letter dated February 21, 2025, you requested a country of origin ruling on Main Beam Module Assemblies on behalf of your client, SL MEX SLP S. DE R.L. DE C.V. (“SL” or “SL MEX”), located in San Luis Potosi, Mexico. There are fourteen (14) manufacturing steps that take place in South Korea and Mexico. 1. Manufacturing process of Light Source Module in SL ELECTRONIC (Korea) 1. OS and LED driver firmware are downloaded to eMMC (AP) using the Gang Programming method, followed by data integrity verification. 2. UV Laser Marking (Korea) 1. Marks product information by printing a 2D barcode with a UV Laser, ensuring production traceability. 3. Screen Printer (Korea) 1. Prints solder paste onto printed circuit board (“PCB”) Pads with controlled pressure and speed to prepare for electronic component mounting. 2. PCB Pad: a metal contact point on the PCB board that connects electronic components. 4. SPI (Korea) 1. Ensure quality by measuring the solder printing condition and deposition volume on PCB pads using 3D inspection. 5. Chip Mounter (Korea) 1. High-speed and precise placement of SMD components on the PCB for the SMT process implementation. 6. Reflow (Korea) 1. Melting and curing the solder through temperature control by zone to permanently attaching SMD components to the PCB. 7. AOI (Korea) 1. 7. 1. Inspection of soldering quality and improper placement through automatic optical inspection to identify defects. 8. Integrated ICT/FCT (Korea) 1. Check for circuit abnormalities through ICT inspection, followed by software download and Secure Debug FCT testing. 9. Coating (Korea) 1. Apply coating liquid uniformly on the PCB substrate to protect it from moisture and contamination. 10. Connector AOI & Coating Inspection (Korea) 1. Perform automatic optical inspection to check the mounting condition of the Waveless-type connector and automatically inspect the coated areas and thickness to confirm the coating status. 11. Manufacturing process of Light Source Module in SL ELECTRONICS (Korea) 1. Router Process : Cut the PCB substrate into individual modules(Routing) and load them onto trays. 2. Selective Soldering : Selectively solder components such as capacitors. Finally, export the finished light source modules to the SL Mexico factory 12. Final Assembly Process at SL’s facility (Mexico) 1. Assembling LAM, heat sink, bezel, lens and wiring (Assembly equipment). 13. Inspection (Mexico) 1. Conducting appearance and lighting inspection (Inspection equipment). 14. Packaging & Delivery (Mexico) 1. Storing and sealing in a dedicated packaging container Shipping finished products from SL MEXICO to SL TENNESSEE (U.S). When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis 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). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, 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. 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. Substantial transformation, including the “name, character and use” test, was at issue in National Hand Tool Corp. v. United States. Therein, the Court of International Trade determined that certain mechanics’ tools did not undergo substantial transformation in the United States, and therefore, were not exempt from the marking requirements set forth in 19 U.S.C. § 1304. The court found that there was no change in name because each article as imported had the same name in the completed tool. The court also found that there was no change in character because the articles, which were either hot-forged or cold-formed into its final shape in Taiwan, remained the same after heat treatment, electroplating, and assembly in the United States. The court further determined that the use of the imported articles was predetermined at the time of entry – noting that each component was intended to be incorporated in a particular finished mechanics’ hand tool, except for one exhibit. Lastly, the court rejected the Plaintiff’s claim that the value added in the United States was relatively significant to the operation in Taiwan so that that substantial transformation should be found, noting that such a finding could lead to inconsistent marking requirements for importers who perform the same processes on imported merchandise, but sell at different prices. Id. The Court of International Trade more recently interpreted the meaning of “substantial transformation” in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016). Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight. All the components of the flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States and assembled into the finished Generation II flashlight. The Energizer court reviewed the “name, character and use” test utilized in determining whether a substantial transformation had occurred and noted, citing Uniroyal, Inc., 3 C.I.T. at 226, that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. In reaching its decision in Energizer, the court expressed the question as one of whether the imported components retained their names after they were assembled into the finished Generation II flashlights. The court found “[t]he constitutive components of the Generation II flashlight do not lose their individual names as a result [of] the post-importation assembly.” The court also found that the components had a predetermined end-use as parts and components of a Generation II flashlight at the time of importation and did not undergo a change in use due to the post-importation assembly process. Finally, the court did not find the assembly process to be sufficiently complex as to constitute a substantial transformation. Thus, the court found that Energizer’s imported components did not undergo a change in name, character, or use because of the post-importation assembly of the components into a finished Generation II flashlight. Virtually all the components of the military Generation II flashlight, including the most important component, the LED, were of Chinese origin. Thus, the court determined that China was the correct country of origin of the finished Generation II flashli

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). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, 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. 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. Substantial transformation, including the “name, character and use” test, was at issue in National Hand Tool Corp. v. United States. Therein, the Court of International Trade determined that certain mechanics’ tools did not undergo substantial transformation in the United States, and therefore, were not exempt from the marking requirements set forth in 19 U.S.C. § 1304. The court found that there was no change in name because each article as imported had the same name in the completed tool. The court also found that there was no change in character because the articles, which were either hot-forged or cold-formed into its final shape in Taiwan, remained the same after heat treatment, electroplating, and