[Federal Register Volume 85, Number 240 (Monday, December 14, 2020)]
[Notices]
[Pages 80798-80799]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26342]
[[Page 80798]]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning a Whoop
Strap Device
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 a device referred to as a Whoop Strap. Based upon
the facts presented, CBP has concluded in the final determination that
the incomplete Whoop Strap and the programming in the United States
would not render the Whoop Strap device to be a product of a foreign
country or instrumentality designated for purposes of U.S. Government
procurement.
DATES: The final determination was issued on November 10, 2020. 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 January 13, 2021.
FOR FURTHER INFORMATION CONTACT: Cynthia Reese, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at (202)
325-0046.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on November 10,
2020, U.S. Customs and Border Protection (CBP) issued a final
determination concerning the country of origin of a Whoop Strap device
for purposes of Title III of the Trade Agreements Act of 1979. This
final determination, HQ H309761, was issued at the request of Whoop
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 incomplete imported Whoop
Strap and the programming in the United States would not render the
finished Whoop Strap to be a product of a foreign country or
instrumentality designated pursuant to 19 U.S.C. 2511(b) for purposes
of U.S. Government procurement.
Section 177.29, CBP 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: November 24, 2020.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H309761
November 10, 2020
OT:RR:CTF:VS H309761 CMR
Category: Origin
Steven B. Zisser, Esq.
Zisser Group
9355 Airway Road
Suite 1
San Diego, CA 92154
RE: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. 2511); subpart B, Part 177, CBP Regulations; Country of
Origin of a Whoop Strap Device
Dear Mr. Zisser:
This is in response to your request of February 27, 2020, on behalf
of your client, Whoop, Inc., for a final determination concerning the
country of origin of a device referred to as a ``Whoop Strap.'' This
request is being sought because your client wants to confirm
eligibility of the device for U.S. government procurement purposes
under Title III of the Trade Agreements Act of 1979 (TAA), as amended
(19 U.S.C. 2511 et seq.). As an importer of the merchandise imported
from China that is processed in the United States to become a finished
``Whoop Strap,'' your client may request a final determination pursuant
to 19 CFR 177.23(a).
Facts:
You describe the ``Whoop Strap'' as:
. . . a fitness performance tracker that combines a wrist-worn
device with a cloud-based analytics system. It incorporates a sensor
that generates data that is to be processed through the analytics
system to provide information relating to the fitness of the
individual wearing the wrist-worn device.
You indicate ``[t]he products consists of hardware, a sensor,
printed circuit board assembly (PCBA) incorporating a radio module, and
battery which [are] encased in a polycarbonate housing with clasp and
attached to a fabric wristband.'' A memory device on the PCBA is
adapted to receive and store proprietary software which is developed by
Whoop. The software records and communicates the fitness data and
generates the analytics.
The manufacturing of the hardware of the Whoop Strap occurs in
China where the sensor, PCBA, battery and housing are assembled. You
also indicate that there is a cover that is placed over the case/kit.
You state:
All hardware components are ``designed'' in the USA and produced
and assembled in China. In the USA, the hardware is attached to the
fabric waistband with a clasp.
After assembly in China and before exportation to the United
States, the Whoop Strap is tested to confirm the assembly was properly
done. You refer to the test as a ``power on'' test which requires
minimal software and equipment. You indicate that the testing software
is removed prior to shipment to the United States and ``[a] `simple'
firmware updater is loaded on the device in China [that] will allow
further software to be loaded in the USA.'' At the time of shipment
from China, you indicate that the Whoop Strap does not function.
After importation into the United States, ``Whoop programs the
proprietary communications software, file software, and battery pack
communications firmware.'' You state that ``[t]his process is achieved
by writing, testing and implementing the necessary code to make the
product function as intended.'' The software and firmware codes are
developed and written in the United States by Whoop employees. Once
programmed in the United States, the device functions as intended,
i.e., being able to sense and communicate health data to the user. The
programming of the device in the United States greatly increases its
value.
Issue:
Whether the Whoop Strap, which is assembled in China and programmed
with software and firmware in the United States, is eligible under the
Title III of the TAA, as amended (19 U.S.C. 2511-2518).
Law and analysis:
U.S. Customs and Border Protection (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, pursuant to subpart B of Part 177, 19 CFR 177.21
et seq., which implements Title III, Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511-2518).
The rule of origin set forth in 19 U.S.C. 2518(4)(B) states:
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
[[Page 80799]]
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 the Federal Procurement 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.
The regulations define a ``designated country end product'' as:
WTO GPA [World Trade Organization Government Procurement
Agreement] country end product, an FTA [Free Trade Agreement]
country end product, a least developed country end product, or a
Caribbean Basin country end product.
A ``WTO GPA country end product'' is defined as an article that:
(1) Is wholly the growth, product, or manufacture of a WTO GPA
country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in a WTO GPA country 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. The term refers
to a product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services (except transportation services) incidental to the article,
provided that the value of those incidental services does not exceed
that of the article itself.
See 48 CFR 25.003.
China is not a WTO GPA country.
The article imported into the United States is the Whoop Strap
assembled hardware consisting of a sensor, PCBA, battery and housing
with a cover placed over the case/kit. The article, in its condition as
imported, is incomplete and non-functional as it lacks the software and
firmware necessary for it to function. The incomplete Whoop Strap, at
the time of importation, is a product of China. CBP is of the view that
programming would not result in a substantial transformation. This is
consistent with CBP's prior determination in H284523 dated August 22,
2017, where CBP held that an imported tablet did not undergo a
substantial transformation by programming. See also H284617 dated
February 21, 2018.
CBP's authority to issue advisory rulings and final determinations
is set forth in 19 U.S.C. 2515(b)(1), which states:
For the purposes of this subchapter, the Secretary of the
Treasury shall provide for the prompt issuance of advisory rulings
and final determinations on whether, under section 2518(4)(B) of
this title, an article is or would be a product of a foreign country
or instrumentality designated pursuant to section 2511(b) of this
title.
Emphasis added.
Therefore, the Whoop Strap would not be considered to be the
product of a foreign country or instrumentality designated pursuant to
19 U.S.C. 2511(b). As to whether the Whoop Strap processed in the
United States may be considered a ``U.S.-made end product'' is under
the jurisdiction of the procuring agency. See Acetris Health, LLC. v.
United States, No. 2018-2399 (Fed. Cir. February 10, 2020).
Holding:
The incomplete Whoop Strap and the programming in the United States
would not render it to be a product of a foreign country or
instrumentality designated pursuant to 19 U.S.C. 2511(b). You may wish
to check the classification of this product to determine if it may be
subject to any Section 301 duties upon importation.
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 of 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. 2020-26342 Filed 12-11-20; 8:45 am]
BILLING CODE 9111-14-P