[Federal Register Volume 89, Number 116 (Friday, June 14, 2024)]
[Notices]
[Pages 50595-50598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13113]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning UPanelS LED 
Display Panels

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 various models of LED display panels sold under 
the UPanelS brand. Based upon the facts presented, CBP has concluded in 
the final determination that the components of the subject UPanelS 
devices undergo substantial transformation in Taiwan upon the 
manufacture of their printed circuit board assembly (PCBA) and light-
emitting diode (LED) lamp assembly.

DATES: The final determination was issued on June 10, 2024. 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 July 15, 2024.

FOR FURTHER INFORMATION CONTACT: Austen Walsh, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of Trade, at 
[email protected].

SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 10, 
2024, CBP issued a final determination concerning the country of origin 
of various models of LED display panels sold under the UPanelS brand 
for purposes of title III of the Trade Agreements Act of 1979. This 
final determination, HQ H332752, was issued at the request Unilumin USA 
LLC (Unilumin), 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 components, which 
are largely sourced from China and Taiwan, are substantially 
transformed in Taiwan when made into the subject UPanelS devices.
    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.

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

HQ H332752

June 10, 2024

OT:RR:CTF:VS H332752 AMW

CATEGORY: Origin

Ms. Angelica Tsakiridis
Managing Director--Global Trade Advisory
Deloitte LLP
555 Mission Street, Suite 1400
San Francisco, CA 94105

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 UPanelS Products

Dear Ms. Tsakiridis:

    This is in response to your request, dated September 8, 2021, on 
behalf of your client, Unilumin USA LLC (``Unilumin''), for a final 
determination concerning the country of origin of the ``UPanelS'' 
product line of light-emitting diode (``LED'') display panels, 
pursuant to Title III of the Trade Agreements Act of 1979 (``TAA''), 
as amended (19 U.S.C. 2511 et seq.), and subpart B of Part 177, U.S. 
Customs and Border Protection (``CBP'') Regulations (19 CFR 177.21, 
et seq.). Your request, submitted as an electronic ruling request, 
was forwarded to this office from the National Commodity Specialist 
Division. Unilumin is a party-at-interest within the meaning of 19 
CFR 177.22(d)(1) and 177.23(a) and is therefore entitled to request 
this final determination.

[[Page 50596]]

Facts

    Unilumin imports various models of ``high-performance [LED] 
display[s]'' sold under the UPanelS product line. The UPanelS 
product line consists of a series of display units capable of 
producing high-definition video or photographic images 
differentiated primarily by pixel pitch. The UPanelS devices are 
used in commercial and educational settings as signage or digital 
displays, including in large format settings such as concert 
backdrops or film sets.\1\ UPanelS devices are capable of being 
affixed directly into a wall mount, displayed free standing, or hung 
with hanging beams.\2\
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    \1\ See ``What makes a successful interactive LED wall,'' 
available at https://www.unilumin-usa.com/led-101/what-makes-a-successful-interactive-led-wall/ (accessed Jan. 8, 2024).
    \2\ UPanelS Product guide, available at https://www.unilumin-usa.com/wp-content/uploads/2020/02/upanels-1.pdf (accessed Jan. 8, 
2024).
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    Each UPanelS consists of two major sub-assemblies: a ``module 
board'' and a ``cabinet housing.'' The module board drives and 
controls each LED unit, forming images for display. The cabinet 
encases the device and provides the power supply function.
    The module board is assembled in Taiwan and is comprised of two 
subassemblies that are also assembled in Taiwan: (1) the main 
printed circuit board assembly (``PCBA'') with LED lamps; and (2) 
the HUB board and receiver card. The main PCBA with LED lamps 
consists of the main PCBA, which regulates the flow of power to the 
LED lamps; and the LED lamps (originating in Taiwan), which light to 
form viewable images. The HUB board and receiver cards assembly 
consists of the HUB board, a separate PCBA printed in China that 
relays information between the receiver card and module board; a 
receiver card (originating in either Taiwan or Romania), which reads 
programmed command signals regulating the brightness and color of 
the LEDs and sequencing the display; and the indicator light board 
(originating in Taiwan), which displays power supply indicators to 
the LED lamps.
    Assembly of the main PCBA with LED lamps occurs in Taiwan over 
approximately 12 steps, which involve the creation of the PCBA via 
surface mount technology (``SMT'') and the placement of LED lamps 
onto the non-printed side of the PCBA:
    1. Mount handling fixture to the integrated circuit (``IC'') 
side of a Chinese-origin bare printed circuit board (``PCB'');
    2. Print components onto the PCB;
    3. Inspect solder paste;
    4. Mount remaining miscellaneous components onto PCB;
    5. Cure the board in reflow oven;
    6. Remove fixture(s) mounted to the IC side of the PCB in step 
one and mount a fixture to the LED side;
    7. Print onto the reverse side of the PCB;
    8. Inspect solder paste;
    9. Mount components;
    10. Cure the board in a reflow oven;
    11. Apply conformal coating on PCB;
    12. Install gasket onto PCB.
    Next, assembly of the HUB board and receiver card occurs in the 
following steps:
    1. Paste installation stickers to a lower/bottom shell (the 
``turtle shell'') and blacken the bottom with a pen;
    2. Insert the receiver card into the HUB board and place the HUB 
board into the bottom of the turtle shell;
    3. Divide the indicator light board into several smaller boards, 
affix the indicator lights, and connect them with the module board 
adapter;
    4. Paste and scan serial number; and
    5. Install the HUB board assembly on the turtle shell and check 
for flatness and gaps.
    The fully assembled PCBA with LED lamps is then combined with 
the HUB board and receiver card assembly to form the completed 
module board. Once combined, the LED lamps can light and display 
video or photographic images.
    The cabinet is the second major subassembly of the completed 
UPanelS. The cabinet houses the module board and provides the power 
supply to the finished device. The cabinet also enables the 
combination of multiple module boards to create larger-format arrays 
(e.g., 4x4 or 2x1 configurations). The cabinet is comprised almost 
entirely of Chinese-origin components, and contains the following 
sub-assemblies: power supply adapter board, power supply, motor 
assembly, power signal combination connector, and wall controller.
    The cabinet is assembled in Taiwan in approximately six steps:
    1. Affix the power cables to the cabinet;
    2. Affix the lacing strip, three core cables, and ground cables 
to the cabinet;
    3. Affix the adapter board to the cabinet;
    4. Assemble left and right-side motor and assemble cables with 
electric screwdriver;
    5. Connect internet cables to the power supply adapter board; 
and
    6. Fit the insulating gasket on the power supply cover and affix 
the power supply cover.
    Once the module board and cabinet are completed, they are 
shipped to China where they are combined into a complete UPanelS 
unit and tested for functionality. Afterwards, the UPanelS is 
disassembled and separately packaged for shipment to the United 
States.
    Each UPanelS will be imported into the United States in one of 
two ways: (1) the UPanelS's finished module board and cabinet are 
imported as two separately packaged, unique product numbers entered 
in the same shipment; or (2) the module board and cabinet are 
entered in the same shipment as separately packaged products along 
with a separate ``wall controller unit.'' \3\ You state that the 
UpanelS is imported in an unassembled condition because the finished 
module board and cabinet are delicate and that shipping the 
components in a single box may damage the panels. To aid 
installation in the United States, each module board or cabinet will 
be assigned a serial number or code allowing for the recombination 
of each module board with its corresponding cabinet.
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    \3\ According to the request, the wall controller unit is a 
third sub-module that, when connected to the UPanelS, receives data 
signals from a source and translates and transmits those signals to 
the receiver card component of the module board. When fully 
assembled, the UPanelS connects to the wall controller via a 
category 5 cable. The wall controller unit will originate in 
Germany, Taiwan, or the United States.
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Issue

    What is the country of origin of the Unilumin UPanelS for 
purposes of U.S. Government procurement?

Law and Analysis

    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, 
pursuant to subpart B of Part 177, 19 CFR 177.21-177.31, which 
implements Title III of the TAA, as amended (19 U.S.C. 2511-2518).
    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.
    The Secretary of the Treasury's authority mentioned above, along 
with other customs revenue functions, are delegated to CBP in the 
Appendix to 19 CFR part 0--Treasury Department Order No. 100-16, 68 
FR 28,322 (May 23, 2003).
    The rule of origin set forth under 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 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 
Regulation (``FAR''). See 19 CFR 177.21. In this regard, CBP 
recognizes that the FAR restricts 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 FAR, 48 CFR 25.003, defines ``designated country end 
product'' as:
    a 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.
    Section 25.003 defines ``WTO GPA country end product'' 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

[[Page 50597]]

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.
    Once again, we note that the subject UPanelS devices are 
assembled in Taiwan, a TAA-designated country, with components 
sourced from TAA-designated countries (e.g., Taiwan, Japan) and non-
TAA-designated countries (e.g., China).
    In determining whether a substantial transformation occurs, 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, CBP considers 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 when determining 
whether a substantial transformation has occurred. No one factor is 
determinative.
    Assembly operations that are minimal or simple, as opposed to 
complex or meaningful, will generally not result in a substantial 
transformation. Factors which may be relevant in this evaluation 
include the nature of the operation (including the number of 
components assembled), the number of different operations involved, 
and whether a significant period of time, skill, detail, and quality 
control are necessary for the assembly operation. 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. If the manufacturing or combining process is a minor one, 
which leaves the identity of the article intact, a substantial 
transformation has not occurred. See Uniroyal, Inc. v. United 
States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022 
(Fed. Cir. 1983) (imported shoe uppers added to an outer sole in the 
United States were the ``very essence of the finished shoe'' and the 
character of the product remained unchanged and did not undergo 
substantial transformation in the United States).
    The Court of International Trade (``CIT'') more recently 
interpreted the meaning of ``substantial transformation'' in 
Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 
(2016). Energizer involved the determination of the country of 
origin of a flashlight, referred to as the Generation II flashlight. 
All the components of the flashlight were of Chinese origin, except 
for a white LED and a hydrogen getter. The components were imported 
into the United States and assembled into the finished Generation II 
flashlight. The Energizer court reviewed the ``name, character and 
use'' test utilized in determining whether a substantial 
transformation had occurred and noted, citing Uniroyal, Inc., 3 
C.I.T. at 226, that when ``the post-importation processing consists 
of assembly, courts have been reluctant to find a change in 
character, particularly when the imported articles do not undergo a 
physical change.'' Energizer at 1318. In addition, the court noted 
that ``when the end-use was pre-determined at the time of 
importation, courts have generally not found a change in use.'' 
Energizer at 1319, citing as an example, National Hand Tool Corp.
    In reaching its decision, the Energizer court expressed the 
question as one of whether the imported components retained their 
names after they were assembled into the finished Generation II 
flashlights. The court found ``[t]he constitutive components of the 
Generation II flashlight do not lose their individual names as a 
result [of] the post-importation assembly.'' The court also found 
that the components had a predetermined end-use as parts and 
components of a Generation II flashlight at the time of importation 
and did not undergo a change in use due to the post-importation 
assembly process. Finally, the court did not find the assembly 
process to be sufficiently complex as to constitute a substantial 
transformation. Thus, the court found that Energizer's imported 
components did not undergo a change in name, character, or use as a 
result of the post-importation assembly into a finished Generation 
II flashlight. Virtually all of the components of the Generation II 
flashlight, including the most important component, the LED, were of 
Chinese origin. Accordingly, the court determined that China was the 
correct country of origin of the Generation II flashlights for 
purposes of government procurement.
    The CIT has also looked at the character of an article to 
determine whether its identity has been substantially transformed 
through assembly or processing. For example, in Uniroyal, Inc. v. 
United States, 3 C.I.T. at 225, the court held that imported shoe 
uppers added to an outer sole in the United States were the ``very 
essence of the finished shoe'' and thus the character of the product 
remained unchanged and did not undergo substantial transformation in 
the United States. Similarly, in National Juice Products Association 
v. United States, 10 C.I.T. 48, 61, 628 F. Supp. 978, 991 (1986), 
the court held that imported orange juice concentrate ``imparts the 
essential character'' to the completed orange juice and thus was not 
substantially transformed into a product of the United States.
    As CBP examines the totality of circumstances in its substantial 
transformation analysis, considerations such as the origin of a 
light source or a PCBA, while not determinative, may be considered 
together with the nature of the overall assembly operations. For 
example, in Headquarters Ruling Letter (``HQ'') H304910, dated April 
21, 2020, CBP determined the country of origin of three models of 
LED automotive lamps to be Mexico, the country in which the PCBA and 
LED lights were assembled together. For all three models, CBP 
determined that the assembly of the Japanese-origin LEDs and the 
Mexican-origin PCBAs in Mexico resulted in a substantial 
transformation. CBP determined that the SMT and wave soldering 
processes incorporated a large number of discrete parts onto a 
printed circuit board, which was a sufficiently ``complex and 
meaningful'' operation so as to result in a substantial 
transformation of the parts making up the product's PCBA. In that 
case, LEDs were one of the discrete components incorporated into the 
PCBA. See also, HQ H331515, dated December 6, 2023 (citing HQ 
H304910 in determining the country of origin of a refrigerator shelf 
light, which included a PCBA and an LED light system, to be Mexico, 
the country of origin for the light's PCBA); and C.S.D. 85-25, 19 
Cust. Bull. 544 (1985) (finding assembly of more than 50 components 
onto PCB results in substantial transformation).
    CBP has also determined the origin of image or video-producing 
devices to be the country in which the underlying PCBA is produced. 
In HQ H218360, dated September 11, 2013, CBP considered the origin 
of devices used to ``capture motion picture images and sound and 
send them digitally . . . to a similar unit at a different location. 
. . .'' In that matter, we found that the origin of the devices was 
the country in which the underlying ``video processing electronic 
circuit board'' and ``network filter electronic circuit board'' were 
produced because these items imparted the character of the devices 
as a video conferencing server. See also HQ H114395, dated May 18, 
2011 (determining the country of origin of a pocket projector to be 
the location of assembly of the light engine module and PCBA).
    In the present matter, and in accordance with HQ H304910 and 
H218360, the assembly of the main PCBA in Taiwan results in a 
substantial transformation. We find that the SMT and curing 
processes incorporate a large number of discrete component parts 
onto a PCB, which is a sufficiently complex and meaningful operation 
so as to result in a substantial transformation of the parts making 
up the PCBA. Similar to HQ H331515, a variety of electronic 
components are added to the raw PCB via SMT in Taiwan to create the 
subject PCBAs. This includes the attachment of the Taiwanese-origin 
LED lamps. Of particular importance, we also note that it is the 
PCBA that enables the device to distribute power to the LED lamps 
and therefore imparts the character of the subject device. In 
addition, the Taiwanese-origin LED lamps also perform the important 
function of displaying the images to be viewed. Furthermore, we find 
that the processing in China, which consists of ``installing'' and 
``attaching'' the subassemblies together for testing, is not 
sufficiently complex and meaningful to result in a substantial 
transformation. Based on the information provided, we therefore 
conclude that the processing in Taiwan results in a product with a 
new name, character, and use, i.e., an LED device capable of forming 
and displaying images.
    Finally, as outlined above, after final assembly in China, each 
UPanelS unit will be separated into the module board, cabinet, and 
sometimes a wall controller unit for

[[Page 50598]]

shipment to the United States. Here, we note that, although the 
devices will be disassembled for shipment, the components will 
nevertheless represent a single item of commerce if shipped 
together. See HQ H100055, dated May 28, 2010 (finding a medical 
patient lift imported unassembled to be a single unit for country of 
origin purposes when shipped together).
    Based on the analysis above, we find that the country of origin 
of the subject UPanelS devices is Taiwan and, therefore, the devices 
would be the product of a foreign country or instrumentality 
designated pursuant to 19 U.S.C. 2511(b)(1).

Holding

    Based on the facts and analysis set forth above, the country of 
origin of the instant UPanelS will be Taiwan.
    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 U.S. Court of International Trade.

Sincerely,

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

[FR Doc. 2024-13113 Filed 6-13-24; 8:45 am]
BILLING CODE 9111-14-P