The country of origin of a network security device

N326483 June 22, 2022 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Country of Origin Shiva Louie Thales DIS CPL USA Inc. Arboretum Plaza II 9442 Capital of Texas Highway North, Suite 400 Austin, TX 78759 RE: The country of origin of a network security device Dear Ms. Louie: In your letter dated June 6, 2022, you requested a country of origin ruling. The merchandise under consideration is identified as the SafeNet eToken 5110 FIPS and is described as a USB authenticator network security device. The subject device is comprised of a printed circuit board assembly (PCBA) populated with various electronic components including a microcontroller IC attached to a USB-A connector and encased within a plastic enclosure. In use, the device saves personal credentials such as passwords, private keys, and digital certificates. The device further allows for secure access when plugged into a computer or other personal devices within an existing network. The user will be prompted to add the eToken authenticator and password before they are allowed access to the system, adding a second layer of security. In your request, you state that the manufacturing process for the device takes place entirely in Cambodia using Chinese materials. In Cambodia, the PCBA is assembled using surface mount technology to mount all necessary components to the board before it is inspected and the firmware is loaded. The USB connector and plasctic housing are then added to complete the device. 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). Regarding the origin of the subject device, it is the opinion of this office that the complete manufacturing process performed in Cambodia is significantly complex and transforms all Chinese components into new and different articles of commerce with a name, character and use distinct from the individual components. As such, based upon the information provided, the country of origin of the SafeNet eToken 5110 FIPS is Cambodia. 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