[Federal Register Volume 76, Number 249 (Wednesday, December 28, 2011)]
[Notices]
[Pages 81518-81520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-33213]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Laser-Based 
Multi-Function Office Machines

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 laser-based multi-function office machines. Based 
upon the facts presented, CBP has concluded in the final determination 
that the assembly and programming operations together convey the 
essential character of the laser-based multi-function office machine, 
and it is at their assembly and programming where the last substantial 
transformation occurs. Therefore, when the laser-based multi-function 
office machines are assembled and programmed in Mexico, the country of 
origin for purposes of U.S. government procurement is Mexico.

DATES: The final determination was issued on December 21, 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 January 27, 2012.

FOR FURTHER INFORMATION CONTACT: Christina Kopitopoulos, Valuation and 
Special Programs Branch: (202) 325-0217.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on December 21, 
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 laser-based multi-function office machines which 
may be offered to the U.S. Government under an undesignated government 
procurement contract. This final determination, HQ H185775, was issued 
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 concluded that, 
based upon the facts presented, the assembly and programming of the 
office machines together convey the essential character of the laser-
based multi-function office machines and it is at their assembly and 
programming where the last substantial transformation occurs. 
Therefore, when the laser-based multi-function office machines are 
assembled and programmed in Mexico, the country of origin for purposes 
of U.S. government procurement is Mexico.
    Section 177.29, Customs Regulations (19 CFR 177.29), provides that 
a notice of final determination 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: December 21, 2011.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.
Attachment

HQ H185775

December 21, 2011

OT:RR:CTF:VS H185775 CK

CATEGORY: Marking

Carlos Halasz, Hewlett-Packard Company, 8501 SW 152 Street, Palmetto 
Bay, Florida 33157

RE: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. Sec.  2511); Subpart B, Part 177, CBP Regulations; 
laser-based multi-function office machine

Dear Mr. Halasz:

    This is in response to your correspondence of September 13, 
2011, requesting a final determination on behalf Hewlett-Packard, 
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 HP 
LaserJet Enterprise 500 MFP M525 (``M525''). We note that Hewlett-
Packard 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:

    The finished M525 is a laser-based multi-function office machine 
that incorporates multiple functions, including printing, scanning, 
copying and faxing.
    The major component of the M525 is the incomplete Print Engine. 
The complete print engine is the central mechanism of the M525 that 
performs printing. The incomplete print engine which is produced in 
Vietnam and is non-functional in this form consists of a metal 
frame, plastic skins, motors, controller board (supplier provided 
firmware), a laser scanning system, fuser, paper trays, cabling 
paper transport rollers, miscellaneous sensing and imaging systems.
    The following assemblies are added to the incomplete print 
engine in Mexico to form the finished unit.
    Formatter Board: The printer formatter is the main controller of 
the printer. It consists of a printed circuit board, industry 
standard components, and customized integrated circuits. The main 
function of the formatter is to receive input data from remote 
devises via different input ports, translate that data into a format 
that the print engine understands, and then send the data onto the 
print engine enabling the information to be successfully printed 
onto paper. The formatter is also responsible for providing command 
and control signals allowing the engine to start, run and stop 
motors in a manner that allows the paper to move from input devices 
to the designated output bin of the printer, while at the same time, 
putting the printed image on the paper. The image is constructed by 
the firmware that runs on the formatter, which tells the lasers how 
to place the image on the paper for proper resolution and image 
quality. The formatter operates the HP Embedded Web Server, which 
allows remote PC users to view the printer settings and make 
adjustments. It creates and stores critical and printer-unique 
calibration and configuration data, which ensure that the sub-
systems have consistent measurements for paper size, page break,

[[Page 81519]]

color reproduction and other standards. The country of origin of the 
formatter is China.
    Scanner/Automatic Document Feeder (ADF): This subsystem controls 
scanning functions based on communication from the formatter. It 
consists of metal frames, plastic skins, paper transport rollers and 
control surfaces, controller/motor driver printed circuit 
assemblies, motors, imaging assembly, glass, cabling, and 
miscellaneous sensors. The scanner is designed and developed in the 
US and the assembly is produced in the US.
    Control Panel: This assembly controls the user interface panel 
and accepts user inputs through the touch screen interaction. The 
panel also provides interface ports with other forms of customer 
interaction. It consists of a plastic frame, LCD screen, touch 
panel, controller board (the firmware is developed and written at HP 
in the US) miscellaneous buttons, connectors, and cabling. The 
control panel communicates with the formatter to execute user 
commands. It is designed in the US and the panel is manufactured in 
China.
    Fax Card: This consists of a printed circuit board, industry 
standard components (modem with supplier furnished firmware) and 
speaker. The fax card allows the M525 to be connected to a phone 
line and to transmit or receive fax messages.
    Hard Disk Drive/Solid State Drive: This is where data is stored. 
The hard disk drive is produced in Malaysia, the solid state drive 
in China. The drives consist of a metal frame, disk media or solid 
state memory, and a controller board (supplier provided firmware).
    Firmware: The term refers to fixed internal programs that 
control electronic devices. The firmware that is installed in Mexico 
is what enables all of the M525's functionality, whether hardware or 
software. The machine is non-functional without the firmware. The 
firmware includes both programs for lower level hardware control and 
higher level operating system functionality. The control panel, 
formatter and other sub-systems have their own firmware for 
operation. The firmware installed in Mexico is developed and written 
in the US, although testing and de-bugging is carried out outside 
the US.
    Minor components and accessories that are also part of the 
process in Mexico include: keyboard (some units only), stapler (some 
units only), cables, fasteners, nameplates and labels, plastics, 
power supply, toner cartridge, and CD's/manuals, all of which are 
sourced from various countries.
    The foregoing assemblies and components are processed in Mexico 
by skilled labor:
     Formatter sub-assembly:
    [cir] The formatter printed circuit assembly may be integrated 
onto a sheet metal tray with multiple screws.
    [cir] The external memory device is installed onto the 
formatter.
    [cir] The fax card is installed onto the formatter
    [cir] Cables are routed.
     Using a lift the incomplete print engine is loaded on a 
pallet.
     The scanner/ADF assembly is set into place atop the 
engine assembly. The two units are mated together using screws and 
cables.
     The hinge assembly between the engine and the scanner/
ADF assembly is secured with screws and side panels are installed.
     The control panel is attached to a hinge on the 
scanner/ADF assembly, and the panel is cabled to the engine.
     The formatter assembly is installed onto the engine 
with several screws, and then connected with cables.
     When needed a keyboard is attached to the unit.
     The firmware for all sub-systems (engine, scanner, ADF, 
fax, control panel, output devices) is downloaded onto the hard 
drive or solid state drive.
Testing is done with skilled labor and consists of:

     The finished units are moved to test stations and are 
connected to computers. The testing software is developed and 
written in the US. Some tests are automated and some performed by 
people.
     As part of the testing process, hardware components are 
verified, the firmware is updated as necessary, the functionality is 
checked, print and copy quality are examined.
     The M525's operating system- a type of firmware is 
installed onto the hard and solid state drives. Settings for the 
product are made according to the option and country the unit is 
intended to be shipped to. Configuration settings are made for 
language, paper, and functionality.
The following packaging and accessories are performed also:

     The finished unit is inspected for correct assembly, 
cosmetic issues, print/copy quality, etc.
     Shipping locks and tape are added to the unit.
     The printer is bagged and shipping foam is added.
     Accessories (e.g., manuals, CD's, power supply) are 
added to the packaging.
     The finished product and the accessories are packaged 
in a box container.
     Box containers are palletized and loaded into 
containers for shipment to a distribution center.

ISSUE:

    What is the country of origin of the HP LaserJet Enterprise 500 
MFP M525 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 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 HQ H125975 (January 19, 2011), CBP examined the country of 
origin of an electronic data storage system that ensured data 
integrity and availability. The system consisted of an operating 
system/firmware developed in the United States, a controller 
assembly, a mounting assembly, hard drives, slot drive module 
assembly and cabinet assembly. These units and components were 
assembled in Mexico, where the US-origin software was downloaded 
onto the finished unit. Testing was also conducted in Mexico. CBP, 
in determining the country of origin was Mexico, focused on the 
final assembly and the fact that the various components originated 
from multiple countries.
    In HQ H082476 (May 11, 2010), CBP addressed the country of 
origin of certain mass data storage devices. The devices included a 
central processing unit, an application specific integrated circuit, 
a capacitor and resistors, an electrically erasable programmable 
read-only memory, a motherboard, a hard drive, chassis, memory 
module and other components. The items were assembled in the US, 
where US-developed proprietary application and firmware was also 
installed. The country of origin was determined to be the US.
    In this case, nonfunctioning assemblies and components from 
various countries are shipped to Mexico. In Mexico the assemblies 
and components are assembled and production on the finished product 
is conducted by skilled laborers. The US-origin firmware is 
downloaded and the M525 is programmed, so that it becomes 
functional. The assembled finished product is tested in Mexico, and 
prepared for shipping to its ultimate destination. Applying the 
above-cited precedent, to the facts in this case, we find that a 
substantial transformation of the various components occurs in 
Mexico, and that the assembly of the materials from various 
countries results in the HP LaserJet Enterprise 500 MFP M525. 
Therefore, the country of origin of the M525 is Mexico.

[[Page 81520]]

HOLDING:

    Based on the facts provided, the assembly and programming 
operations performed in Mexico on the components of the M525 give 
rise to a new and different article, the HP LaserJet Enterprise 500 
MFP M525. As such, the M525 is to be considered a product of Mexico 
for purposes of U.S. Government procurement.
    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 of 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. 2011-33213 Filed 12-27-11; 8:45 am]
BILLING CODE 9111-14-P