[Federal Register Volume 76, Number 115 (Wednesday, June 15, 2011)]
[Notices]
[Pages 35007-35009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14842]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning the Country 
of Origin of Certain Office Chairs

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

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (``CBP'') has issued a final determination concerning the 
country of origin of certain office chairs. Based upon the facts 
presented, CBP has concluded in the final determination that the U.S. 
is the country of origin of the office chairs for purposes of U.S. 
government procurement.

DATES: The final determination was issued on June 9, 2011. 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 on or before July 15, 2011.

FOR FURTHER INFORMATION CONTACT: Elif Eroglu, Valuation and Special 
Programs Branch: (202) 325-0277.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 9, 2011, 
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 the SAYL task chair and the SAYL side chair which 
may be offered to the U.S. Government under an undesignated government 
procurement contract. This final determination, Headquarters Ruling 
Letter (``HQ'') H154135, was issued at the request of Herman Miller, 
Inc. 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). In the final determination, CBP has concluded 
that, based upon the facts presented, the assembly of the SAYL task 
chair and the SAYL side chair in the U.S., from parts made in China, 
Canada, and the U.S., constitutes a substantial transformation, such 
that the U.S. is the country of origin of the finished articles for 
purposes of U.S. government procurement.
    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, CBP Regulations (19 CFR 177.30), provides 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.

    Dated: June 9, 2011.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.

Attachment

HQ H154135

June 9, 2011

OT:RR:CTF:VS H154135 EE

CATEGORY: Marking

Lisa A. Crosby
Sidley Austin, LLP
1501 K Street, NW
Washington, D.C. 20005

RE: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. Sec.  2511); Subpart B, Part 177, CBP Regulations; 
Office Chairs

Dear Ms. Crosby:

    This is in response to your correspondence of March 4, 2011, 
requesting a final determination on behalf of Herman Miller, Inc. 
(``Herman Miller''), pursuant to subpart B of part 177, U.S. Customs 
and Border Protection (``CBP'') Regulations (19 C.F.R. Sec.  177.21 
et seq.). Under the pertinent regulations, which implement Title III 
of the Trade Agreements Act of 1979, as amended (19 U.S.C. Sec.  
2511 et seq.), CBP issues country of origin advisory rulings and 
final determinations as to whether an article is or would be a 
product of a designated country or instrumentality for the purpose 
of granting waivers of certain ``Buy American'' restrictions in U.S. 
law or practice for products offered for sale to the U.S. 
Government.
    This final determination concerns the country of origin of the 
SAYL task chair and the SAYL side chair (collectively, the SAYL 
office chairs). We note that Herman Miller is a party-at-interest 
within the meaning of 19 C.F.R. Sec.  177.22(d)(1) and is entitled 
to request this final determination.

FACTS:

    Herman Miller is a U.S. supplier of furniture products and 
accessories for home, office, healthcare and learning environments. 
The merchandise at issue is the Herman Miller SAYL task chair and 
the SAYL side chair. You state that Herman Miller engineered and 
designed the office chairs wholly within the U.S. The assembly of 
the office chairs, from U.S. and imported components, occurs in the 
U.S.
    The SAYL task chair is intended for the principal occupant in an 
office and it swivels and has casters. The SAYL side chair is 
intended to serve as a guest chair in an office; it does not swivel, 
although it can be equipped with casters. Both SAYL office chairs 
have a variety of ergonomic features. For example, the SAYL task 
chair provides pelvic stabilization and the height may be adjusted 
and tilted to allow the body to naturally pivot at the ankles, 
knees, and hips. The seat depth adjusts. Two back support options 
are available to improve posture and lower back comfort. Three arm 
choices are also available--fixed, height-adjustable and fully-
adjustable (i.e., pivot, fore/aft slide, in/out slide).
    The SAYL chairs are offered in several aesthetic configurations: 
1) upholstered back, 2) single surface elastomeric thermo-plastic 
urethane (``TPU'') (i.e., mesh) back, and 3) an injection molded 
hard plastic back (not the subject of this final determination 
request). All configurations offer two leg options: a four-leg base 
and a cantilever base.
    The SAYL task chair, depending on its specific configuration, 
comprises approximately 35 components (excluding fasteners). The 
SAYL side chair, depending on its specific configuration, comprises 
approximately 15 components (excluding fasteners). All of the 
components are of U.S., Chinese, or Canadian origin.
    You submitted the costed bills of materials for the SAYL task 
chair and the SAYL side chair. Each bill of material represents a 
different aesthetic configuration. The two types of SAYL office 
chairs share many of the same components. The components from China 
of the SAYL chairs include: casters, tilt assembly, cylinder, arm 
supports, and plastic back (including the TPU mesh). The component 
from Canada is a five-star base subassembly. The components from the 
U.S. include: foam seat assembly, crossing, seat pan, spine, pelvis, 
mid-back foam assembly, leg base, glides, back frame, arms, and back 
assembly.
    You state that the manufacture of both types of SAYL office 
chairs involves similar processes. The production in the U.S. 
involves approximately 35 individual steps to convert the components 
into a finished chair. From start to finish, including quality 
testing and packaging, it takes approximately 19 minutes to 
manufacture the TPU mesh configuration and 17 minutes to manufacture 
the upholstered configuration.

TPU Mesh Configuration

    You state that the production of both types of SAYL chairs with 
the TPU mesh configuration begins with Herman Miller receiving a 
sheet of Chinese-origin TPU mesh from its supplier in the exact size 
and shape requested by Herman Miller. The TPU mesh is placed in a 
custom-made machine, which is designed to stretch the mesh into the 
required shape.
    Two arrow hangers are then added to the two top points of the 
TPU mesh. Using a special fixture, the hangers are pressed into 
place and the TPU mesh is stretched into a secure position in each 
hanger. Next, two strips of plastic featuring a dozen tabs are 
placed at the bottom of the TPU mesh, with

[[Page 35008]]

one strip on each side of the mesh. Using a special hand tool, each 
tab is bent upward in order to attach each strip of plastic to the 
TPU mesh. The TPU mesh is then ready for assembly with the spine and 
back. The Y-shaped spine is placed on top of the TPU mesh. The 
pelvis is then inserted into the Y-shaped spine. Next, the TPU mesh 
is stretched horizontally using a special tool. Arm sleeves are 
affixed to the TPU mesh. Using the stretcher fixture, the TPU mesh 
is stretched over the Y-shaped spine so that the two hangers at the 
top of the mesh fit over the spine. The TPU mesh is stretched until 
it snaps into place.
    The next step is to prepare the seat subassembly to which the 
TPU mesh-spine-pelvis subassembly is attached. Each seat consists of 
a foam base that is upholstered. The foam base is assembled with a 
plastic frame in advance. The seat upholstery is also cut and sewn 
into shape in advance. The upholstery is placed tightly over the 
foam base and is stapled into place. Then, the bottom frame and seat 
subassembly are secured into place by hand-driven screws.
    Next, the legs are prepared for insertion into the bottom frame. 
The five-star base subassembly is fitted with a top. Two adjustment 
levers, which permit the chair to tilt, are inserted into the top of 
the five-star subassembly. A mechanical subassembly, which houses 
the tilting mechanism and other aspects of the chair's ergonomic 
features, is fitted onto the top. The mechanical subassembly, top 
and five-star base subassembly are then joined with the seat.
    Next, the arm pads are inserted into the arms and secured with 
hand-driven screws. The arms are fitted into the arm sleeves. The 
components are pressed together until they snap into place.

Upholstered Configuration

    The first step in the production of both types of SAYL chairs 
with the upholstered configuration is to sew the cover of the chair 
back from U.S.-origin fabric. Depending on the fabric chosen, a 
liner may be sewn into the back side of the cover. A button hole 
also is sewn into the back side of the cover.
    Next, the foam base for the chair back is upholstered with the 
cover. A plug or control handle which controls the adjustability of 
the seat back is inserted into the buttonhole on the backside of the 
cover. A ``doghouse,'' or half circle, is then aligned inside the 
center back of the foam base. Using the doghouse as a guide, the 
fabric in the interior of the doghouse is cut, folded over and 
stapled in place.
    Next, the joints for attaching the spine are affixed to the 
chair back. A Y-shaped spine is then prepared for attachment to the 
pivot joints by inserting tabs into the spine. The top of the spine 
is then forced down onto the pivot joints until they click into 
place. The bottom of the spine fits into the opening created by the 
doghouse operation previously described. Then, nut plates are 
installed on either side of the chair. Arm sleeves are affixed to 
the nut plates using hand-driven screws.
    Next, the pelvis is assembled with the chair back. The pelvis 
and chair back then are joined with the seat. The seat is assembled 
in a manner similar to the chair back. Fabric is cut and sewn into a 
cover, which is fitted over a foam base. The cover is stretched 
tight over the foam base. Then, the seat handle is installed.
    Next, the arm pads are inserted into the arms and secured with 
hand-driven screws. The arms are then fitted into the arm sleeves. 
The components are pressed together until they snap into place.
    You provided a copy of the product brochure for the SAYL office 
chairs. Additionally, you submitted an example of Herman Miller's 
research in the field of ergonomics; sample job instructions which 
explain each step involved in the manufacturing process of the SAYL 
office chairs; and a DVD which depicts the assembly procedures for 
the SAYL office chairs. You also provided a list of patents 
applicable to the SAYL office chairs.

ISSUE:

    What is the country of origin of the SAYL task chair and the 
SAYL side chair for the purpose of U.S. government procurement?

LAW AND ANALYSIS:

    Pursuant to subpart B of part 177, 19 C.F.R. Sec.  177.21 et 
seq., which implements Title III of the Trade Agreements Act of 
1979, as amended (19 U.S.C. Sec.  2511 et seq.), CBP issues country 
of origin advisory rulings and final determinations as to 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.
    Under the rule of origin set forth under 19 U.S.C. Sec.  
2518(4)(B):

An article is a product of a country or instrumentality only if (i) 
it is wholly the growth, product, or manufacture of that country or 
instrumentality, or (ii) 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.

See also, 19 C.F.R. Sec.  177.22(a).

    In rendering advisory rulings and final determinations for 
purposes of U.S. government procurement, CBP applies the provisions 
of subpart B of part 177 consistent with the Federal Acquisition 
Regulations. See 19 C.F.R. Sec.  177.21. In this regard, CBP 
recognizes that the Federal Acquisition Regulations restrict the 
U.S. Government's purchase of products to U.S.-made or designated 
country end products for acquisitions subject to the TAA. See 48 
C.F.R. Sec.  25.403(c)(1). The Federal Acquisition Regulations 
define ``U.S.-made end product'' as:

* * * an article that is mined, produced, or manufactured in the 
United States or that is substantially transformed in the United 
States 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 transformed.

48 C.F.R. Sec.  25.003.

    In order to determine whether a substantial transformation 
occurs when components of various origins are assembled into 
completed products, CBP considers the totality of the circumstances 
and makes such determinations on a case-by-case basis. The country 
of origin of the item's components, extent of the processing that 
occurs within a country, and whether such processing renders a 
product with a new name, character, and use are primary 
considerations in such cases. Additionally, factors such as the 
resources expended on product design and development, extent and 
nature of post-assembly inspection and testing procedures, and the 
degree of skill required during the actual manufacturing process may 
be relevant when determining whether a substantial transformation 
has occurred. No one factor is determinative.
    In Carlson Furniture Industries v. United States, 65 Cust. Ct. 
474 (1970), the U.S. Customs Court ruled that U.S. operations on 
imported chair parts constituted a substantial transformation, 
resulting in the creation of a new article of commerce. After 
importation, the importer assembled, fitted, and glued the wooden 
parts together, inserted steel pins into the key joints, cut the 
legs to length and leveled them, and in some instances, upholstered 
the chairs and fitted the legs with glides and casters. The court 
determined that the importer had to perform additional work on the 
imported chair parts and add materials to create a functional 
article of commerce. The court found that the operations were 
substantial in nature, and more than the mere assembly of the parts 
together.
    In Headquarters Ruling Letter (``HQ'') W563456, dated July 31, 
2006, CBP held that certain office chairs assembled in the U.S. were 
a product of the U.S. for purposes of U.S. government procurement. 
The office chairs were assembled from over 70 U.S. and foreign 
components. In finding that the imported parts were substantially 
transformed in the U.S., CBP stated that the assembly processing 
that occurred in the U.S. was complex and meaningful, required the 
assembly of a large number of components, and rendered a new and 
distinct article of commerce that possessed a new name, character, 
and use. CBP noted that the U.S.-origin seat and back frame 
assemblies, which were made with the importer's trademark fabric, 
together with the tilt assembly, were of U.S. origin and gave the 
chair its unique design profile and essential character.
    In this case, the SAYL task chair comprises approximately 35 
components and the SAYL side chair has approximately 15 components, 
which are assembled in the U.S. We note that some of the major 
components of the office chairs such as the spine, seat pan, and 
glides are of U.S. origin. You state that as in HQ W563456, the 
U.S.-origin fabric and the Chinese-origin TPU mesh, used in most 
aesthetic configurations of the SAYL office chairs, impart the 
essential identity of the chairs and that the backs were designed by 
Herman Miller in the U.S. and are trademarked. We note the Chinese-
origin TPU mesh is extensively processed in the U.S. by stretching 
and fitting it into the

[[Page 35009]]

required shape using special tools. Other U.S.-sourced components of 
the SAYL chairs include the foam seat assembly, crossing, seat pan, 
spine, pelvis, mid-back foam assembly, leg base, glides, back frame, 
arms, and back assembly. It takes approximately 19 minutes to 
manufacture the TPU mesh configuration of the office chairs and 17 
minutes to manufacture the upholstered configuration. Under the 
described assembly process, we find that the foreign components lose 
their individual identities and become an integral part of a new 
article, the SAYL task chair or the SAYL side chair, possessing a 
new name, character and use. Based upon the information before us, 
we find that the imported components that are used to manufacture 
the SAYL task chair and the SAYL side chair, when combined with the 
U.S. origin components, are substantially transformed as a result of 
the assembly operations performed in the U.S., and that the country 
of origin of the SAYL task chair and the SAYL side chair for 
government procurement purposes will be the U.S.

HOLDING:

    The imported components that are used to manufacture the SAYL 
task chair and SAYL side chair are substantially transformed as a 
result of the assembly operations performed in the U.S. Therefore, 
we find that the country of origin of the SAYL task chair and SAYL 
side chair for government procurement purposes is the U.S.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 C.F.R. Sec.  177.29. Any party-at-
interest other than the party which requested this final 
determination may request, pursuant to 19 C.F.R. Sec.  177.31, that 
CBP reexamine the matter anew and issue a new final determination. 
Pursuant to 19 C.F.R. Sec.  177.30, 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,

Sandra L. Bell

Executive Director
Regulations and Rulings
Office of International Trade
[FR Doc. 2011-14842 Filed 6-14-11; 8:45 am]
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