[Federal Register Volume 79, Number 129 (Monday, July 7, 2014)]
[Notices]
[Pages 38327-38329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-15765]


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DEPARTMENT OF HOMELAND SECURITY

 Customs and Border Protection


Notice of Issuance of Final Determination Concerning Certain 
Toner Cartridge Products

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 toner cartridge products known as All-In-
One Toner Cartridges. Based upon the facts presented, CBP has concluded 
in the final determination that Japan is the country of origin of the 
All-In-One Toner Cartridges for purposes of U.S. Government 
procurement.

DATES: The final determination was issued on June 24th, 2014. 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 August 6, 2014.

FOR FURTHER INFORMATION CONTACT: Grace A. Kim, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of International Trade 
(202) 325-7941.

[[Page 38328]]


SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 24, 2014 
pursuant to subpart B of Part 177, U.S. Customs and Border Protection 
Regulations (19 CFR part 177, subpart B), CBP issued a final 
determination concerning the country of origin of certain toner 
cartridge products known as All-In-One Toner Cartridges, which may be 
offered to the U.S. Government under an undesignated government 
procurement contract. This final determination, HQ H251592, 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 processes performed in 
Japan, substantially transform non-TAA country All-In-One Toner 
Cartridges. Therefore, the country of origin of the All-In-One Toner 
Cartridges is Japan for purposes of U.S. Government procurement.
    Section 177.29, CBP 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: June 24, 2014.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.
Attachment

HQ H251592

June 24, 2014

OT:RR:CTF:VS H251592 GaK

CATEGORY: Origin

Fusae Nara
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036-4039

RE: U.S. Government Procurement; Country of Origin of All-In-One 
Toner Cartridges; Substantial Transformation

Dear Ms. Nara:
    This is in response to your letter, dated February 21, 2014, 
requesting a final determination on behalf of Ricoh Company Ltd. 
(``Ricoh''), pursuant to subpart B of part 177 of the U.S. Customs 
and Border Protection (``CBP'') Regulations (19 C.F.R. Part 177). 
Under these regulations, which implement Title III of the Trade 
Agreements Act of 1979 (``TAA''), 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. This 
final determination concerns the country of origin of Ricoh's all-
in-one (``AIO'') toner cartridge (``AIO cartridge''). We note that 
as a foreign manufacturer, Ricoh 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:

    Ricoh designed and developed the AIO cartridge in Japan, which 
is used with Ricoh's Aficio multifunctional products (``MFP'') as 
well as printers. The AIO cartridge can be distinguished from 
conventional toner cartridge in that it does not only contain the 
toner powder, but also a cleaning unit and a development unit. It 
serves multiple functions by storing and transporting the toner, 
then transferring and affixing letters and images onto paper. The 
AIO cartridge also cleans the surface of the Organic Photo Conductor 
(``OPC drum''), which converts the light signal to the electric 
charge, enabling the toner particles to be affixed onto the paper. 
In contrast, in a conventional cartridge, the cleaning of the OPC 
drum is done by the MFP or printers.
    As stated above, the AIO cartridge has three main components: 
toner powder, development unit, and cleaning unit. The toner powder 
is the ink that forms the letters and images on paper and is claimed 
to be the most critical element of the AIO cartridge. Ricoh 
developed and produces the toner powder in Japan and the formula for 
the toner is proprietary and patented. The production process 
involves pre-mixing the chemical ingredients using a highly 
sophisticated chemical mixer; mixing and kneading the toner powder 
by adding air pressure, followed by a cooling process; pulverizing 
the toner; equalizing the toner particles into the same size; and 
final mixing and packaging.
    The development unit has a container called a ``hopper,'' that 
holds the toner powder. The development unit is assembled in China 
and imported to Japan, where the hopper will be filled with toner 
powder. After the hopper is filled with toner powder, the hopper is 
sealed and cleaned to avoid any contamination of the MFPs and 
printers.
    The cleaning unit is assembled in Japan and contains the OPC 
drum, cleaning blade, charge rollers and other miscellaneous parts. 
With the exception of the OPC drum, all components are made in 
Japan. The OPC drum is produced in Thailand with parts from various 
countries. It is stated that the assembly of the cleaning unit 
requires experienced technicians, as the assembly is of a delicate 
nature. The assembly process includes assembling the cleaning blade, 
applying black toner powder on the cleaning blade for a smooth 
contact with the OPC drum, setting the waste toner case, assembling 
the cleaning blade to the spent toner case, and assembling the OPC 
drum and charger roller into the cleaning unit.
    The next step in producing the AIO cartridge involves making a 
frame assembly in Japan, which is the outer structure of the AIO 
cartridge. The arm shutter is assembled to both the right and left 
sides of the frame; a spring is attached to each arm shutter; the 
right frame is assembled by attaching the arm shutter and electrode 
sheets, which connect the cleaning unit and development units to the 
toner hopper; a memory chip and radio-frequency identification tag 
(``RFID chip'') is installed to the side of the right frames. The 
same processes are repeated for the left frame, except that the left 
frame does not include a memory chip or RFID chip. After the outer 
structure is assembled, the toner hopper, developer unit and 
cleaning unit are assembled together in Japan. The assembly process 
involves mounting the right and left frames onto the assembled 
development unit and cleaning unit combination, assembling gears 
connecting the frame to the development and cleaning units, and 
installing the OPC drum shutter. The AIO cartridge is inspected and 
data is input onto the RFID chip, which allows the MFP or printer to 
recognize the AIO cartridge and informs the user when the AIO 
cartridge should be replaced.

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 or 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 in 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, the extent and 
nature of post-assembly inspection and testing procedures, and 
worker skill required during the actual manufacturing process will 
be considered when determining whether a substantial transformation 
has occurred. No one factor is determinative.
    In determining whether the combining of parts or materials 
constitutes a substantial transformation, the determinative issue is 
the extent of the operations performed and whether the parts lose 
their identity and

[[Page 38329]]

become an integral part of the new article. Belcrest Linens v. 
United States, 6 Ct. Int'l Trade 204, 573 F. Supp. 1149 (1983), aff 
'd, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or 
combining process is a minor one that leaves the identity of the 
imported article intact, a substantial transformation has not 
occurred. Uniroyal, Inc. v. United States, 3 Ct. Int'l Trade 220, 
542 F. Supp. 1026 (1982). Assembly operations that are minimal or 
simple, as opposed to complex or meaningful, generally will not 
result in a substantial transformation. See C.S.D. 80-111, C.S.D. 
85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97.
    CBP has held in a number of cases involving similar merchandise 
that complex and meaningful operations involving a large number of 
components result in a substantial transformation. Ricoh states that 
the toner for the cartridge is the most valuable component citing 
Headquarters Ruling Letter (HQ) W563548 (Nov. 9, 2009). In that 
case, CBP considered the country of origin of toner cartridges and 
image drums which were remanufactured in the U.S. The toner 
cartridges comprised 52 parts plus toner and 20 new parts were used 
to remanufacture the toner cartridges: 14 from the U.S., 1 from the 
U.K., and 5 from China. The remaining 32 parts were salvaged from 
used cartridges, which were cleaned for reassembly. The components 
with mechanical function such as the shutters, mixing gear, mixing 
bar, and spiral attachments were simply cleaned and not replaced. 
The cartridges were filled with new toner of Japanese origin and 
tested. CBP found that the cartridges were not substantially 
transformed in the U.S. because the remanufacturing processes were 
rather simple. Rather, the toner was the only significant component 
replaced during the remanufacturing operation. CBP concluded that 
since the toner imparted the essential character of the 
remanufactured toner cartridge, the country of origin was Japan. HQ 
W563548 also considered the remanufacture of image drums in the U.S. 
The image drums were comprised of 110 parts and 56 new parts were 
used from various countries: 12 in the U.S., 1 in Canada, 5 in 
Japan, and 38 in Thailand. Several of the newly manufactured parts 
were significant to the functionality of the image drum, such as the 
organic photoreceptor drum (claimed to be the most valuable 
component of the image drum), the developing roller, the charge 
roller, and the cleaning blade, which were all manufactured in Japan 
including new lubricating toner powder. Unlike the toner cartridge 
in W563548, the remanufacturing of the image drums required 
replacement of most of the components that contributed to the 
functionality of the image drum. Based on these facts, CBP concluded 
that the image drum was substantially transformed in the U.S.
    We find that substantial manufacturing operations are performed 
in Japan in producing the AIO cartridge. While the OPC drum is 
manufactured in Thailand, the other parts of the cleaning unit 
originate in Japan. As a result of the assembly of the cleaning unit 
in Japan, the OPC drum becomes an integral part of the cleaning unit 
such that it may be considered a product of Japan. This is analogous 
to the remanufactured image drum assembly process described in HQ 
W563548. The development unit is manufactured in China. The toner 
powder is manufactured in Japan and as found in W563548, it is the 
most critical element of the AIO cartridge. These three components 
(two of Japanese origin and one from China) are brought together by 
the frame assembly also performed in Japan. Therefore, we find that 
the country of origin of the Ricoh AIO cartridge is Japan.

HOLDING:

    Based on the facts of this case, we find that the processing in 
Japan substantially transforms the non-Japanese components. 
Therefore, the country of origin of the AIO cartridge is Japan 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. 2014-15765 Filed 7-3-14; 8:45 am]
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