The country of origin and application of the Section 301 trade remedy of a digital blood pressure monitor

N316933 January 22, 2021 CLA-2-90:OT:RR:NC:N3:135 CATEGORY: Country of Origin Mr. Lawrence R. Pilon Rock Trade Law LLC 134 North LaSalle Street Suite 1800 Chicago, IL 60602 RE: The country of origin and application of the Section 301 trade remedy of a digital blood pressure monitor Dear Mr. Pilon: In your letter dated January 13, 2021, on behalf of Medline Industries, Inc., you requested a ruling on the country of origin and application of Section 301 additional duties for a digital blood pressure monitor. The merchandise under consideration is a digital blood pressure monitor. In its condition as imported, it consists of a fully assembled digital blood pressure monitor unit, cuff, and four AA batteries packaged together. The digital blood pressure monitor unit is composed of a pressure sensor, a MCU (microprocessor control unit), an IC (integrated circuit), printed circuit board, resistors, capacitors, a plastic shell (that forms the body of the blood pressure monitor unit), a LCD (liquid crystal display), a plastic face plate, springs (for the battery compartment), and rubber shims ("feet" for the bottom of the monitor). The design research and product development for the finished digital blood pressure monitor, including the pressure sensor, IC assembly, and MCU, as well as creation of the custom firmware for later incorporation into the integrated circuit assembly, are all performed in Taiwan. The pressure sensor, IC, MCU, and printed circuit board are all manufactured and fully assembled with the discrete electronic components (resistors and capacitors), then inspected, and tested in Taiwan. The firmware that operates and controls the blood pressure monitor is burned into the integrated circuit assembly in Taiwan. The plastic shell is also a product of Taiwan. The Taiwanese components are then shipped to China to be assembled into the finished blood pressure monitor unit with the following Chinese components: a LCD, a plastic face plate, rubber shims, and springs. This assembly process is a simple repetitive process that requires relatively little skill and little time. Post-assembly inspection and testing take place in China. The finished blood pressure monitor unit is then packaged with a Chinese-sourced cuff and four AA batteries, then shipped to Medline in the United States. The "country of origin" is defined in in section 134.1(b), Customs and Border Protection (CBP) Regulations (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 design research and product development for the digital blood pressure monitor occur in Taiwan. The Taiwanese components and software perform the essential function of the finished product and account for most of the cost. We find that the Taiwanese components and software determine the essential character of the digital blood pressure monitor. These items are not substantially changed by either the addition of the Chinese components or the relatively simple assembly, inspection, testing, and packaging operations performed in China. Thus, the country of origin of the imported blood pressure monitor is Taiwan for the purposes of marking and the assessment of both normal trade relations duty rate and Section 301 duties. As the imported merchandise will not be a product of China, Section 301 duties will not apply. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Fei Chen at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division