[Federal Register Volume 68, Number 160 (Tuesday, August 19, 2003)]
[Notices]
[Pages 49788-49791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21010]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection


Notice of Issuance of Final Determination Concerning Fiber Optic 
Cable Products

AGENCY: Customs and Border Protection, Department of Homeland Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that the Bureau of Customs and 
Border Protection (CBP) has issued a final determination concerning the 
country of origin of certain fiber optic cable products to be offered 
to the United States Government under an undesignated government 
procurement contract. The final determination found that based upon the 
facts presented, the countries of origin of products referred to as 
Glass, Glass Polymer patch cords, Fiber Interconnect Product cable 
assemblies and Multimode (ST MM) epoxy connectors are the United 
States, the United States, and Japan, respectively.

DATES: The final determination was issued on August 11, 2003. A copy of 
the final determination is attached. Any party-at-interest, as defined 
in 19 CFR 177.22(d), may seek judicial review of this final 
determination within 30 days of August 19, 2003.

FOR FURTHER INFORMATION CONTACT: Craig Walker, Special Classification 
and Marking Branch, Office of Regulations and Rulings (202-572-8836).

SUPPLEMENTARY INFORMATION: Notice is hereby given that on August 11, 
2003, pursuant to Subpart B of Part 177, Customs Regulations (19 CFR 
part 177, subpart B), CBP issued a final determination concerning the 
country of origin of certain fiber optic cable products to be offered 
to the United States Government under an undesignated government 
procurement contract. The CBP ruling number is HQ 562754. This final 
determination was issued at the request of 3M Company under procedures 
set forth at 19 CFR part 177, subpart B, which implements Title III of 
the Trade Agreements Act of 1979, as amended (19 U.S.C. 2511-18).
    The final determination concluded that, based upon the facts 
presented, the assembly in China of U.S.-origin fiber optic cable and 
Chinese-origin connectors to create Glass, Glass Polymer (``GGP'') 
patch cords does not result in a substantial transformation of the 
components into a product of China. Therefore, the country of origin of 
the product is the United States. The final determination also 
concluded that neither the assembly in China of a Japanese-origin 
ceramic ferrule with U.S.-origin components to create connectors nor 
the subsequent assembly in China of the connectors with U.S.-origin 
fiber optic cable to produce Fiber Interconnect Product (``FIP'') cable 
assemblies results in a substantial transformation of the components 
into products of China. Accordingly, the origin of the FIB cable 
assemblies is the United States. Finally, the final determination 
concluded that the assembly in China of a Japanese-origin ceramic 
ferrule with U.S., Canadian and Chinese components to produce Multimode 
(ST MM) epoxy connectors does not result in a substantial

[[Page 49789]]

transformation of the components into products of China. Therefore, the 
country of origin of the ST MM epoxy connectors is Japan.
    Section 177.29, Customs Regulations (19 CFR 177.29), provides that 
notice of final determinations shall be published in the Federal 
Register within 60 days of the date the final determination is issued. 
Section 177.30, Customs Regulations (19 CFR 177.30), states that any 
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial 
review of a final determination within 30 days of publication of such 
determination in the Federal Register.
    Any party-at-interest, as defined in 19 CFR 177.22(d), may seek 
judicial review of this final determination within 30 days of August 
19, 2003.

    Dated: August 13, 2003.
Myles B. Harmon for Michael T. Schmitz,
Assistant Commissioner, Office of Regulations and Rulings.
MAR-2 RR:CR:SM 562754 CW
CATEGORY: Marking

Mr. Robert E. Burke
Counsel, Barnes, Richardson & Colburn, 303 East Wacker Drive, Suite 
1100, Chicago, Illinois 60601

Re: Country of Origin of fiber optic cable products; government 
procurement; final determination

    Dear Mr. Burke: This is in response to your letter dated May 9, 
2003, on behalf of your client 3M Company (``3M'') requesting a 
ruling on fiber optic cable products. 3M requests a country of 
origin determination for the fiber optic cable products in order to 
comply with the Federal Acquisition Regulations, 48 CFR 25.000 et 
seq., and the ``Trade Agreements Act,'' 19 U.S.C. 2501 et seq. 
Specifically, this ruling concerns the following three products: 
Glass, Glass Polymer (``GGP'') patch cords; Fiber Interconnect 
Product (``FIP'') cable assemblies (also referred to as ``FIP patch 
cords''); and Multimode (ST MM) epoxy connectors. In accordance with 
your request, this response constitutes a final determination issued 
in accordance with 19 CFR 177.22(c).

FACTS

GGP Patch Cord

    3M manufactures optical fiber, and further manufactures the 
fiber into optical fiber cable. These processes, all of which take 
place in the United States, begin with an imported fiber optic 
``seed,'' which 3M uses as raw material in manufacturing the optical 
fiber. The optical fibers, in turn, are made into optical fiber 
cable in the United States. Once the optical fiber cable is 
completed, 3M expects to send the cable to China, where it is to be 
cut and fitted with connectors. A description of the steps in the 
production process, beginning with the imported ``seed,'' is as 
follows:
    1. 3M produces optical fiber in the United States from an optic 
core, called a ``seed,'' which is imported into the U.S. from the 
Netherlands. The seed is a multi-layered glass rod. The rings, or 
layers, or glass that comprise the seed are melded together and 
light travels through the layers of glass, all of which have 
different refractive indexes.
    2. After importation, 3M adds a glass ``sleeve'' to the core. 
This process is known as ``cladding.'' The seed and the sleeve 
comprise an optical fiber ``preform,'' measuring approximately 2\1/
2\ inches in diameter by one meter.
    3. 3M then draws the preform, via a drawing tower, into an 
extremely thin o ptical glass fiber. The resulting diameter of the 
optical fiber is 0.004 inches. The drawing also melds the core and 
glass sleeve into one integrated product, giving the optical fibers 
required optical properties. 3M refers to this optical fiber as 
``glass, glass, polymer,'' or ``GGP''. 3M owns a patent, in the U.S. 
and in several other countries, on the GGP process.
    4. 3M then sends the optical fiber to another U.S. company, 
which adds a thermoplastic jacket and aramid fibers to the final 
optical fiber. The jacket and the fibers are added solely for the 
protection of the delicate optical fiber. After jacketing, this 
company winds the finished optical fiber cable onto spools and sends 
it to China.
    5. In China, the U.S. optical fiber cable in spools is cut to 
length and molded plastic connectors made in China are applied to 
the optical fiber cable using the following steps:
    a. The spooled cable is cut to length;
    b. Each end of the cut cable is threaded through a plastic 
holder where about two inches of sheathing are removed from each end 
of the cable and any exposed Kevlar fiber is cut away and the 
plastic jacketing of the optical fiber is removed;
    c. The exposed fiber is cleaned with alcohol and measured;
    d. The fiber is threaded through a connector, glued to the 
connector and excess fiber is trimmed;
    e. The connectors are placed into a finishing machine, where the 
fiber ends are automatically beveled and polished;
    f. The metal springs, sourced from the United States, are 
inserted into a connector and ultrasonically welded into place;
    g. The connectors are ultrasonically cleaned and tested and a 
protective plastic shroud is snapped onto the connector.

FIP Cable Assembly

    1. 3M purchases optical fiber cable from an unrelated company in 
the U.S. This cable is a standard fiber optic cable, and consists of 
one or more fiber optic fibers, aramid (Kevlar TM) for 
strength, and a thermoplastic coating that provides protection for 
the very thin fiber(s).
    2. 3M purchases a ceramic ferrule in Japan. This ferrule, a 
hollow cylinder, is used to align the ends of the optical fibers as 
the fibers are inserted into the connectors. The hollow center of 
the ferrule contains one channel that is designed to fit the optical 
fiber and to align the fiber ends, enabling light to pass through 
the connection.
    3. 3M purchases or self-produces plastic parts to be used in the 
cable connectors. All self-produced parts are molded in the United 
States.
    4. 3M sends the spooled fiber optic cable and plastic parts, 
along with a small metal ring from the U.S., and the ferrule from 
Japan, to China.
    5. In China, the ceramic ferrule, the metal ring, and the 
plastic parts are assembled into a connector for the ends of the 
cable assemblies. The fiber optic cable is also cut-to-length and 
assembled with the connectors. Specifically, the steps involved in 
the assembly process are as follows:
    a. The spooled cable is cut to length;
    b. Each end of the cut cable is threaded through a respective 
plastic boot and the metal ring;
    c. After removing about two inches of sheathing, Kevlar 
TM fiber, and plastic jacketing of the cable, the exposed 
fiber is cleaned with alcohol and measured;
    d. The fiber is threaded through the ferrule and fastened by 
adhesive;
    e. The metal ring is attached, by crimping, and the fiber is 
trimmed;
    f. The exposed ends of the fiber are scored, machine-polished, 
and cleaned;
    g. The unit is inspected and tested, and a plastic protective 
dust cap is placed on it.

ST MM Epoxy Connector

    3M also separately imports a connector, called an ``ST MM Epoxy 
Connector'' from China. This connector is similar to the connector 
used on the FIP Cable Assemblies described above, and the component 
source and assembly process is also substantially similar. In this 
case, the assembly consists of the following components:
    1. 3M purchases a Japanese made ceramic ferrule which it 
provides to the assembler. This ferrule is a hollow cylinder, used 
to align the ends of the optical fibers as the fibers are inserted 
into the connectors. The hollow center of the ferrule contains one 
channel that is highly engineered to fit the optical fibers exactly 
and to provide a precise alignment of the optical fiber ends to 
minimize the loss of light in the connection.
    2. 3M supplies the assembler with an epoxy ring, a spring, a c-
clip and tygon tubes from the United States. 3M also supplies the 
assembler with a small, metal ``backbone'' and a metal ``bayonet'' 
from Canada. Packing materials and labels are from China.
    3. 3M supplies the assembler with a plastic dust cap and a boot, 
made in China.
    The assembly process is as follows:
    1. The backbone and epoxy ring are assembled and glued with the 
ceramic ferrule, bayonet, spring and c-clip to form the ST MM Epoxy 
Connector.
    2. The dust cap is then put over the assembly. This cap is only 
used for protection of the connector during transit; it is removed 
before final use.
    3. The capped connector is put into the plastic bag, along with 
the tygon tube and the boot. The boot and tygon tubing is added to 
the connector by the final user to provide strain relief. (The Tygon 
tubing is used to protect the fiber when the connector is terminated 
onto 900 um fiber. It is not used 100% of the time). The end user 
determines if the assembly needs the tygon tubing.

ISSUES

    For purposes of government procurement, what is the country of 
origin of the patch

[[Page 49790]]

cords, FIP Cable Assembly and ST MM Epoxy Connector processed as 
described above?

LAW AND ANALYSIS:

    Under Subpart B of Part 177, 19 CFR 177.21 et seq., which 
implements Title III of the Trade Agreements Act of 1979, as amended 
(19 U.S.C. 2511 et seq.), the Bureau of Customs and Border 
Protection (CBP) issues country of origin advisory rulings and final 
determinations on whether an article is or would be a product of a 
designated country or instrumentality for the purposes of granting 
waivers of certain ``Buy American'' restrictions in U.S. law or 
practice for products offered for sale to the U.S. Government.
    In regard to determining the country of origin of goods intended 
for government procurement, section 177.22(a), Customs Regulations 
(19 CFR 177.22(a)), provides, in pertinent part, as follows:
    For the purpose of this subpart, an article is a product of a 
country or instrumentality only if (1) it is wholly the growth, 
product, or manufacture of that country or instrumentality, or (2) 
in the case of an article which consists in whole or in part of 
materials from another country or instrumentality, it has been 
substantially transformed into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was so transformed.
    19 CFR 177.22(a)(1) does not apply in the instant case because 
the fiber optic cable products are not wholly produced in the United 
States. Therefore, 19 CFR 177.22(a)(2) is applicable.
    An article that consists in whole or in part of materials from 
more than one country is a product of the last country in which it 
has been substantially transformed into a new and different article 
of commerce with a name, character, and use distinct from that of 
the article or articles from which it was so transformed. See United 
States v. Gibson-Thomsen, 27 C.C.P.A. 267 (1940); Uniroyal Inc. v. 
United States, 542 F. Supp. 1026 (Ct. Int'l Trade 1982), aff'd, 702 
F.2d 1022 (Fed. Cir. 1983); Koru North America v. United States, 701 
F. Supp 229 (Ct. Int'l Trade 1988); National Juice Products Ass'n v. 
United States, 628 F. Supp. 978 (Ct. Int'l Trade 1986); Coastal 
States Marketing Inc. v. United States, 646 F. Supp. 255 (Ct. Int'l 
Trade 1986), aff'd, 818 F.2d 860 (Fed. Cir. 1987); Ferrostaal Metals 
Corp. v. United States, 664 F. Supp. 535 (Ct. Int'l Trade 1987).
    If the manufacturing or combining process is a minor one which 
leaves the identity of the imported article intact, a substantial 
transformation has not occurred. See Uniroyal Inc. v. United States, 
3 CIT 220, 542 F. Supp. 1026 (CIT 1982). Assembly operations which 
are minimal or simple, as opposed to complex or meaningful, will 
generally not result in a substantial transformation. See C.S.D. 80-
111, C.S.D. 85-25, and C.S.D. 90-97.

GGP Patch Cords

    In the case of the patch cords, a foreign ``seed'' is used in 
the U.S. in the manufacture of optical fiber cable. The first issue 
is whether the processing in the United States performed on this 
imported ``seed'' results in a substantial transformation. In 
Headquarters' Ruling Letter (``HRL'') 561774 dated January 29, 2001, 
Customs addressed a similar situation. In HRL 561774, the issue 
involved the country of origin marking of imported glass rod 
(``cane'') used in the production of optical fiber preforms in the 
U.S. The imported cane was subjected to a ``overcladding'' process 
to create the fiber preform. According to the facts in HRL 561774, 
[t]he fiber itself consists of two different types of glass--one 
making up the ``core'' [of the preform, i.e., cane], and the other 
making up the ``cladding'' surrounded by a protective acrylate 
coating. The core is the light-guiding region of the fiber, while 
the cladding, which has a different index of refraction than the 
core, ensures that the light signal remains within the core as it is 
carried along the fiber's length.
    Customs held that, as the optical properties are imparted at the 
preform stage of production, the ``essence'' or character of the 
preform does not derive from the cane, but from the added cladding 
and its interaction with the core (cane). Therefore, we found that 
the production of the fiber preform resulted in a substantial 
transformation of the imported cane.
    In the present case, an imported multi-layered glass rod 
(referred to as a ``seed'') is subjected to a ``cladding'' process 
in the U.S., involving the addition of a glass ``sleeve'' to the 
core. The preform is then drawn into optical glass fiber which, in 
turn, is made into optical fiber cable. Consistent with the holding 
in HRL 561774, we find that the above processing in the U.S. 
(specifically, the operations resulting in the preform) 
substantially transforms the foreign-origin ``seed'' into a 
``product of'' the United States.
    The second issue involving this first product is whether the 
operations performed in China result in a substantial transformation 
of the U.S.-origin optical fiber cable into a ``product of'' China. 
The U.S.-origin optical fiber cables are sent to China. In China, 
the optical fiber cable is cut-to-length, two inches of sheathing is 
removed from each end of the cable, and plastic connectors of 
Chinese origin are attached to each end of the cable.
    In C.S.D. 85-25 (HRL 561392) dated September 25, 1984, Customs 
held that an assembly does not constitute a substantial 
transformation unless the operation is ``complex and meaningful.'' 
The Bureau of Customs and Border Protection (CBP) criteria for 
determining whether an operation is ``complex and meaningful'' 
depends upon the nature of the operation, including the number of 
components assembled and number of different operations involved. 
Prior CBP rulings raise additional considerations such as processing 
time, costs, visibility of the imported article after processing, 
and skill required by the assembly operation.
    In HRL 561392 dated June 21, 1999, Customs considered the 
country of origin marking requirements of an insulated electric 
conductor which is an electrical cable with pin connectors at each 
end used to connect computers to printers or other peripheral 
devices. The cable and connectors were made in Taiwan. In China, the 
cable was cut to length and connectors were attached to the cable. 
Customs held that the cutting of the cable to length and assembly of 
the cable to the connectors in China did not result in a substantial 
transformation. In HRL 560214 dated September 3, 1997, Customs held 
that where wire rope cable was cut to length, sliding hooks were put 
on the rope, and end ferrules were swaged on in the U.S., the wire 
rope cable was not substantially transformed. Customs concluded that 
the wire rope maintained its character and did not lose its identity 
and become an integral part of a new article when attached with the 
hardware. In HRL 555774 dated December 10, 1990, Customs held that 
Japanese wire cut to length and electrical connectors crimped onto 
the ends of the wire was not a substantial transformation.
    In the case of the GGP patch cords in this case, it is our 
opinion that the cutting of the cable to length and assembly of the 
cable to the Chinese-origin connectors in China does not result in a 
substantial transformation of the cable. Therefore, as the 
connectors lose their separate identity when combined with the fiber 
optic cable, the country of origin of the imported optical fiber 
cable is the United States.

FIP Cable Assemblies

    In the case of the FIP cable assembly, a Japanese-origin ceramic 
ferrule and fiber optic cable (purchased from an unrelated company 
in the U.S.), metal ring (purchased in the U.S.), and plastic parts 
(purchased in the U.S. or self-produced by 3M in the U.S.) are used 
during the assembly operation in China. First, the connectors are 
assembled using the ferrule, adhesive, plastic covers, and a metal 
ring. The ferrule gives the connector its form and function. The 
connectors are then attached to each end of the fiber optic cable. 
For purposes of this ruling, we are assuming that those components 
said to be purchased in the U.S. for use in making the FIP cable 
assembly are of U.S. origin.
    In your submission, you state that the assembly operation for 
the FIP cable assembly is substantially similar to that described 
above for the GGP patch cord. You mention that the only major 
difference is that the FIP connectors include the Japanese-origin 
ferrule, which provides the structure and the enclosure for the 
cable at the point of connectivity. According to your submission, 
the ceramic ferrule is precisely designed to allow the joining of 
hair-thin fiber optic cables. The other parts of the connector are 
simply a means of affixing the ferrule in place. You assert that the 
assembly operation performed in China does not result in a 
substantial transformation of either the ferrule or the fiber optic 
cable. Therefore, you contend that the country of origin of the 
imported FIP cable assembly is the U.S. as the fiber optic cable 
imparts the essential character to the cable assembly or, 
alternatively, that the country of origin of the fiber optic portion 
of the assembly is the U.S. and the origin of the connector portion 
is Japan.
    In HRL 556020 dated July 1, 1991, Customs addressed the issue of 
whether electrical

[[Page 49791]]

connectors produced in a designated beneficiary developing country 
under the Generalized System of Preferences (GSP) qualified as 
substantially transformed constituent materials of the electrical 
cable to which they were attached for purposes of the 35% value-
content requirement under the GSP. The production of the connectors 
involved machining brass rod into contact pins and then joining the 
contact pins with plastic connector housings. Customs held that, 
while the initial fabrication of the contact pins from brass rod 
resulted in a substantial transformation, neither the subsequent 
assembly of the contact pins with connector housings to create the 
electrical connectors nor the later assembly of the electrical 
connectors with the cable resulted in a second substantial 
transformation. We stated that these are considered simple assembly 
operations which will not result in a substantial transformation, as 
they involve a small number of components and do not appear to 
require a considerable amount of time, skill, attention-to-detail, 
or quality control.
    Similarly, in the instant case, we find that neither the U.S.-
origin fiber optic cable nor the Japanese-origin ferrule undergoes a 
substantial transformation in China as a result of the assembly 
operations performed there to create the FIP cable assemblies. These 
are considered simple assembly operations involving only a small 
number of components. In considering the last country in which the 
FIP cable assembly underwent a substantial transformation, it is our 
opinion that the cable assembly's characteristics are primarily 
imparted at the time that the fiber optic cable is manufactured in 
the U.S. The fibers making up the cable serve as the transmission 
medium through which light signals travel. Therefore, the country of 
origin of the imported FIP cable assemblies is the U.S.

ST MM Epoxy Connector

    In your submission, you state that the assembly operation for 
the ST MM Epoxy Connector is substantially similar to that described 
above for the FIP cable assembly connector. Based on the reasoning 
cited above and as found in HRL 556020, it is our opinion that the 
assembly is relatively simple and only involves a small number of 
components. Therefore, in considering the last country in which the 
connectors underwent a substantial transformation, we believe that 
the connector's characteristics are primarily imparted by the 
ferrule which provides the structure and enclosure for the fiber 
optical cable at the point of connectivity. Therefore, the country 
of origin of the MM Epoxy Connector is Japan.

HOLDING

    Based on the facts presented, joining the Chinese-origin 
connectors to the U.S.-origin fiber optic cable in China to create 
the GGP patch cords does not constitute a substantial 
transformation. As a result, the imported GGP patch cord is a 
product of the United States for government procurement purposes 
under 19 CFR Part 177, Subpart B.
    Based on the facts presented, the assembly of the connectors and 
the subsequent assembly of the connectors to the fiber optic cable 
in China to produce the FIP cable assembly does not result in a 
substantial transformation. Therefore, as the very essence of the 
cable is imparted by the fiber optical cable, the FIP cable assembly 
is a product of the United States for government procurement 
purposes.
    Based on the facts presented, the assembly of the ST MM epoxy 
connector in China does not result in a substantial transformation. 
Therefore, as the very essence of the connector is imparted by the 
ferrule, the connector is a product of Japan for government 
procurement purposes.
    Notice of this final determination will be given in the Federal 
Register as required by 19 CFR 177.29. Any party-at-interest other 
than the party which requested this final determination may request, 
pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and 
issue a new final determination.
    Any party-at-interest may, within 30 days after publication of 
the Federal Register notice referenced above, seek judicial review 
of this final determination before the Court of International Trade.

 Sincerely,

Michael T. Schmitz,
Assistant Commissioner, Office of Regulations and Rulings

[FR Doc. 03-21010 Filed 8-18-03; 8:45 am]
BILLING CODE 4820-02-P