The country of origin of a device used for locating and tracking

 N324862 March 31, 2022 OT: RR:NC: N2:208 CATEGORY: Country of Origin Mr. Andrew Bisbas Lowenstein Sandler 2200 Pennsylvania Ave NW Washington, District of Columbia 20037 RE: The country of origin of a device used for locating and tracking Dear Mr. Bisbas: In your letter dated March 16, 2022, on behalf of Omni-ID, Inc, you requested a country of origin ruling determination. The merchandise under consideration is the Sense Asset+ device, which is an electronic device that locates and tracks objects. This Sense Asset+ device is attached to an object and relays information regarding the location and movement of that object to a smartphone application. It is used in various settings including construction yards, manufacturing facilities, and hospitals. Based on the information provided, the manufacturing process begins with a PCBA that is manufactured in the Philippines. The Philippines-origin PCBA accounts for the majority of the device’s total manufacturing costs. The South Korean GPS is installed using surface mount technology (SMT) onto the PCBA in the Philippines. Next, the device is programmed in the Philippines with the code and tested. The PCBA has the capabilities necessary to perform the locating and tracking functions before leaving the Philippines. The PCBA is then shipped to China where it is assembled into the final product using China-origin plastic cases and other minor components. Lastly, the Sense Asset+ devices are tested for functionality before being imported into the United States. The "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 to render such other country the 'country of origin' within the meaning of this part. When considering a product that may be subject to antidumping, countervailing, or other safeguard measures, the substantial transformation analysis is applied to determine the country of origin. See 19 C.F.R. § 102.0; HQ 563205, dated June 28, 2006.   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 before 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). 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). Based upon the facts presented, it is the opinion of this office that the manufacturing process that takes place in the Philippines to create the PCBA (the dominant component) is substantial and complex. The various electrical elements are transformed in the Philippines into a different article with a new name, character, and use. They lose their separate identities and become an integral part of a new article as a result of the manufacturing process. Accordingly, the country of origin of the Sense Asset+ device for origin purposes would be the Philippines at the time of importation into the United States. 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 Lisa Cariello at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division