[Federal Register Volume 82, Number 47 (Monday, March 13, 2017)]
[Notices]
[Pages 13462-13463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04806]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning the WorkFit-
TL Sit-Stand Desktop Workstation

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 the WorkFit-TL Sit-Stand Desktop Workstation. 
Based upon the facts presented, CBP has concluded in the final 
determination that the United States is the country of origin of the 
WorkFit-TL Sit-Stand Desktop Workstation for purposes of U.S. 
government procurement.

DATES: The final determination was issued on March 7, 2017. 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 no later than April 12, 2017.

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

SUPPLEMENTARY INFORMATION: Notice is hereby given that on March 7, 
2017, 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 the WorkFit-TL Sit-
Stand Desktop Workstation which may be offered to the U.S. Government 
under an undesignated government procurement contract. This final 
determination, Headquarters Ruling Letter (``HQ'') H280512, 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, 
under the totality of the circumstances, the country of origin of the 
WorkFit-TL Sit-Stand Desktop Workstation is the United States 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: March 7, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.

Attachment

HQ H280512

March 07, 2017

OT:RR:CTF:VS H280512 EE

CATEGORY: Marking

Jim Noreault
Ergotron Inc.
1181 Trapp Road
Eagan, MN 55121

RE: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; 
WorkFit-TL Sit-Stand Desktop Workstation

Dear Mr. Noreault:

    This is in response to your correspondence of September 29, 2016 
requesting a final determination on behalf of Ergotron Inc. 
(``Ergotron''), pursuant to subpart B of Part 177, U.S. Customs and 
Border Protection (``CBP'') Regulations (19 CFR 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. 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 the 
WorkFit-TL Sit-Stand Desktop Workstation. We note that Ergotron is a 
party-at-interest within the meaning of 19 CFR 177.22(d)(1) and is 
entitled to request this final determination.

FACTS:

    The merchandise at issue is the WorkFit-TL Sit-Stand Desktop 
Workstation. You state that the WorkFit-TL is an ergonomic, height 
adjustable desk intended to help promote a healthy work environment 
by giving the user the ability to easily adjust between a standing 
or sitting positon. The WorkFit-TL can be adjusted by releasing the 
hand-brake levers on either side of the unit to position the surface 
higher or lower to accommodate sitting or standing position. The 
WorkFit-TL is assembled in the United States from U.S. and Chinese 
components. Ergotron received a country of origin marking ruling for 
the WorkFit-T Sit-Stand Desktop Workstation from the National 
Commodity Specialist Division (New York Ruling Letter (``NY'') 
N276731, dated July 15, 2016). You state that WorkFit-TL features a 
larger keyboard tray and wider work surface than the WorkFit-T but 
the products and the assembly processes are otherwise identical.
    You have submitted photographs, an assembly drawing, a process 
flow map, and two bills of materials for the WorkFit-TL. The first 
bill of materials is for materials utilized for all processing 
performed in the United States. The second bill of materials is for 
all processing performed in China. You state that of the total cost 
of production, 57 percent is attributable to materials of U.S. 
origin and U.S. labor costs (including overhead).
    You state that the WorkFit-TL is comprised of three main 
components: A Chinese origin lift assembly, a U.S. origin laminated 
particle board work surface and keyboard tray. The lift assembly 
consists of base metal and provides user assisted lift functionality 
by means of spring force to allow adjustment of the product between 
sitting and standing positions. The lift assembly from China is 
assembled with components fabricated in Ergotron's facility in the 
United States including the work surface, keyboard tray, right and 
left keyboard support brackets, and metal support bar. The design 
and development of the WorkFit-TL occurs in the United States. The 
production that occurs in the United States includes the following:

The right and left keyboard support brackets and metal support bar

     Laser cutting sheet metal components
     Press braking to bend sheet metal components to create 
the right and left brackets and the metal support bar
     Stud insertion into the sheet metal components
     Painting the sheet metal components
     Assembling the sheet metal components to the imported 
lift mechanism.

The work surface and keyboard tray

     Sawing raw Medium-Density Fiberboard (``MDF'') to the 
size of the work surface and keyboard tray
     Routing of profiles on the MDF sheets
     Sanding of MDF to prepare for the vinyl laminate
     Applying glue to the MDF
     Pressing the vinyl laminate onto the MDF

[[Page 13463]]

     Removing the excess laminate from the work surface and 
keyboard tray
     Removing the excess glue from the bottom of the work 
surface and keyboard tray
     Printing the Ergotron logo onto work surface
     Attaching the work surface and keyboard tray to the 
lift mechanism of Chinese origin.

ISSUE:

    What is the country of origin of the WorkFit-TL Sit-Stand 
Desktop Workstation for the purposes of U.S. Government procurement?

LAW AND ANALYSIS:

    Pursuant to 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.), 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. 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 CFR 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 Federal Acquisition 
Regulations. See 19 CFR 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 CFR 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 CFR 25.003.

    In order to determine whether a substantial transformation 
occurs when components of various origins are assembled into 
completed products, the determinative issue is the extent of 
operations performed and whether the parts lose their identity and 
become an integral part of the new article. See Belcrest Linens v. 
United States, 6 CIT 204 (1983), aff'd, 741 F.2d 1368 (Fed. Cir. 
1984). 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 HQ 561258, dated April 15, 1999, CBP determined that the 
assembly of numerous imported workstation components with the U.S.-
origin work surface, which was the essential and largest component 
of the workstation, into finished workstations constituted a 
substantial transformation. CBP held that the imported components 
lost their identity as leg brackets, drawer units, panels etc. when 
they were assembled together to form a workstation. In HQ H083693, 
dated March 23, 2010, CBP held that a certain wood chest assembled 
in the United States was a product of the United States for purposes 
of U.S. government procurement. The wood chest was assembled from 
over twenty U.S. and foreign components. Of the total cost of 
production, 40 percent was attributable to materials of U.S. origin, 
U.S. warehouse overhead and U.S. labor costs (including overhead). 
CBP held that the components that were used to manufacture the wood 
chest, when combined with a U.S. origin laminate top, were 
substantially transformed as a result of the assembly operations 
performed in the United States. See also HQ 731676, dated June 22, 
1989, (unfinished mahogany table legs and rails from the Philippines 
were substantially transformed in the United States when assembled 
into a table base with a U.S. origin wood veneered top).
    In the instant case, the lift assembly, manufactured in China, 
is assembled in the United States with laminated particle board work 
surface and keyboard tray, right and left keyboard support brackets, 
and metal support bar which are fabricated in the United States by 
Ergotron. The processes that occur in the United States include 
sawing, profiling, sanding, hot-pressing and trimming to manufacture 
the work surface and keyboard tray as well as laser-cutting, bending 
and painting of the sheet metal components followed by final 
assembly of the U.S. origin and the imported components. Based on 
the facts provided and consistent with the CBP rulings cited above, 
we find that the imported lift assembly is substantially transformed 
as a result of the assembly performed in the United States to 
produce the finished WorkFit-TL Sit-Stand Desktop Workstation. In 
support of this conclusion, we agree that the lift assembly is not 
functional to an end user by itself as it does not include the 
primary features of the U.S. origin work surface and keyboard tray 
which allow the work to be conducted, and without which, the lifting 
mechanism is incapable of being used as a workstation. Accordingly, 
we find that the country of origin of the WorkFit-TL Sit-Stand 
Desktop Workstation for purposes of U.S. Government procurement is 
the United States.

HOLDING:

    The country of origin of the WorkFit-TL Sit-Stand Desktop 
Workstation for government procurement purposes is the United 
States.
    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. Pursuant to 19 CFR 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,

Alice A. Kipel, Executive Director, Regulations and Rulings, Office 
of Trade

[FR Doc. 2017-04806 Filed 3-10-17; 8:45 am]
 BILLING CODE 9111-14-P