The country of origin of an Automotive Display Panel

N327379 August 25, 2022 OT:RR:NC:N2:208 CATEGORY: Country of Origin Jeffrey Richardson Miller, Canfield, Paddock and Stone, PLC 840 West Long Lake Road, Suite 150 Troy, MI 48098 RE: The country of origin of an Automotive Display Panel Dear Mr. Richardson: In your letter dated July 27, 2022, on behalf of Tianma America, Inc., you requested a country of origin ruling determination. The merchandise under consideration is described as Automotive Display Panels (Auto-Display), which are an interface used in vehicles. The Auto-Display panels measures eleven inches diagonally and can be used in automobiles as either a driver or passenger display to provide infotainment, navigation, and any other operating system reports, such as display of ground speed, battery or fuel status, warnings, and lights. The completed Auto-Display will integrate with the select vehicle and display the selected infotainment and operation system reports. Each Auto-Display panel is comprised of a Printed Circuit Board Assembly (PCBA), a BLU-subassembly, a glass panel subassembly, and a deco-class A plastics. In the submission, it is stated that the manufacturing process begins in Malaysia where the PCBA is manufactured via Surface Mount Technology (SMT). This SMT process attaches all of the components to the bare board including the micro-controller unit, deserialiser, LED driver, multiple Integrated Circuits, and various resistors and capacitors. The BLU-Subassembly, which is the backlight unit, is manufactured in China or Japan. The unit is comprised of an LED bar, a light guide plate, and films set within a housing. This subassembly provides the necessary light source to the glass panel. Next, the glass panel subassembly is manufactured in China and described as the LCD glass sandwich used for the unit’s display. The subassembly consists of a thin-film transistor (TFT) array, color filter, and liquid crystal layer encapsulated within a housing. Lastly, the deco-class A plastics are sourced from China, Mexico, or any Southeast Asian countries. The deco-class are described as various components that finish out the manufacture of the finished unit. These include front and rear covers, trim, brackets, knobs, switches, and mounting screws. Then, the PCBA, BLU-subassembly, glass panel subassembly, and the deco-class A plastics are imported to the company’s facility in Japan for final assembly. The four parts are assembled together via a semi-automated process prior to software being loaded on the device. The unit is then tested and inspected for form and quality before it is packaged for importation into the United States. 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 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. Accordingly, it is our opinion, that the PCBA subassembly manufactured in Malaysia, is the essential functional component of the finished article. The complex manufacturing process performed in Malaysia renders the end-use predetermined. Though the assembly process performed in Japan adds significant functionality, we find that it does not substantially transform the PCBA into a new and different article of commerce with a name, character, and use distinct from the exported good. Therefore, based upon the facts presented, the country of origin of the Automotive Display Panel is Malaysia. 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