The country of origin of a fiber optic cable module

N315760 November 19, 2020 CLA-2-90:OT:RR:NC:N2:212 CATEGORY: Country of Origin Paula Connelly Sandler, Travis & Rosenberg, P.A. 100 Trade Center, Suite G-700 Woburn, MA 01801 RE: The country of origin of a fiber optic cable module Dear Ms. Connelly: In your letter dated November 9, 2020, you requested a country of origin ruling on behalf of your client, Senko Advanced Components, Inc. The merchandise under consideration, identified by part number DWG ENC-0520-737, is described as a Fused Biconical Taper (FBT) coupler and cable assembly. The subject assembly consists of an optical fiber bundle and a coupler structure made up of a quartz tube contained within a metal housing. The fiber optic bundle passes through the coupler where it is split into individual fibers to create multiple outputs at the other end of the coupler. The finished devices are used in various telecommunications and data communication applications. You state that the manufacturing process begins when U.S. originating individual optical fibers are sent to China where they are cut to the desired length and twisted together in a pair. The fibers are then fused together and passed through a quartz tube, which is then placed within a stainless-steel case and filled with silicone and epoxy. The epoxy is then cured in an oven and the finished assembly is tested for function. We note that the quartz tube and stainless-steel case originate from China. The “country of origin” is defined in 19 CFR 134.1(b), in pertinent part, 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.” For tariff purposes, the courts have held that 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). Further, in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer, the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), 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.” Energizer at 1318. In addition, the court noted, “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. v. United States, 16 C.I.T. 308, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. Regarding the origin of the subject assemblies, it is the opinion of this office that the optical fibers impart the essential functional component of the finished article. While the addition of the coupler components in China adds to the form and function of the finished device, we find that this process does not substantially transform the fibers into a new and different article of commerce with a name, character, and use distinct from the exported article. Therefore, the country of origin of the FBT coupler and cable assembly, part number DWG ENC-0520-737, is the United States. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the USA. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Luke LePage at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division