[Federal Register Volume 89, Number 127 (Tuesday, July 2, 2024)]
[Notices]
[Pages 54843-54846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14549]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning a 
DisplayPort Male to Female Video Adapter

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 ``DisplayPort male to female adapter''. Based 
upon the facts presented, CBP has concluded that the country of origin 
of the adapter is Taiwan, where the printed circuit board assembly 
(``PCBA'') is manufactured.

DATES: The final determination was issued on June 27, 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 no later than August 1, 2024.

FOR FURTHER INFORMATION CONTACT: Austen Walsh, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of Trade, at (202) 
325-0114.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 27, 
2024, CBP issued a final determination concerning the country of origin 
of a DisplayPort adapter for purposes of title III of the Trade 
Agreements Act of 1979. This final determination, Headquarters Ruling 
Letter (``HQ'') H331939, was issued at the request of Aegis Multimedia 
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 
the country of origin of the DisplayPort adapter is Taiwan, where the 
PCBA is manufactured. The final determination also finds that the 
country of origin for marking purposes of the subject DisplayPort male 
to female adapter is Taiwan.
    Section 177.29, CBP Regulations (19 CFR 177.29), provides that a 
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

[[Page 54844]]

publication of such determination in the Federal Register.

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

HQ H331939

June 27, 2024
OT:RR:CTF:VS H331939 AMW

Category: Origin

Sammy Hsieh
Aegis Multimedia Inc.
2F, No. 21, LN 48 Guangming St., Tucheng Dist.
New Taipei, 236, Taiwan

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 DisplayPort Male to Female Adapter

Dear Mr. Hsieh:

    This is in response to your request, dated May 1, 2023, for a final 
determination concerning the country of origin of a video graphics 
array adapter 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 for response. Aegis Multimedia Inc. (``Aegis'') 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.

Facts

    Aegis imports a ``DisplayPort male to female adapter'', which is an 
eight-inch-long video converter. The adapter is used to connect a 
desktop or laptop computer with a video graphics array (``VGA'') 
compliant monitor or television, converting signals transmitted between 
the computer and the monitor. You state that the adapter has one 
DisplayPort male connector (source signal input), one printed circuit 
board assembly attached to a VGA female connector (PCBA/signal output), 
and one eight-inch-long cable.
    The adapter manufacturing process consists of two phases: (1) 
printed circuit board assembly (``PCBA'') production in Taiwan, and (2) 
final assembly in China.

Phase One--PCBA Production (Taiwan)

    The PCBA is manufactured using surface mount technology (``SMT'') 
in which various components are affixed to a Taiwanese-origin circuit 
board:
    1. Solder paste is applied to a bare circuit board. The stainless-
steel foil of the bare circuit board is laser cut to form openings in 
the board for the size and location of each surface mount component at 
which point solder paste is applied.
    2. A high-speed chip mounter is used to place smaller and lighter 
components (e.g., small resistors, capacitors, and inductors) onto the 
circuit board.
    3. A slow-speed chip mounter is used to place larger and heavier 
components (e.g., ball grid array (``BGA'') chip, flash, and 
connectors) onto the circuit board.
    4. The unfinished circuit board is placed in a reflow oven, which 
melts the previously applied solder paste to form a non-metallic 
compound between the above-mentioned parts and the bare circuit board.
    5. The PCBA is placed in an automated optical inspection (``AOI'') 
device to be scanned to catastrophic failure and quality defects.
    6. The PCBA is combined with the VGA female connector and soldered 
together by hand. After the PCBA and VGA connector are completed, the 
devices are placed in a plastic tray for packaging and shipment to 
Aegis's China facility.

Phase Two--Final Assembly (China)

    The Chinese-origin components are assembled with the Taiwanese-
origin PCBA/VGA female connector assembly at the manufacturer's plant. 
The final assembly occurs over the following 13 stages:
    1. Flash programming software is downloaded onto the PCBA;
    2. Eight-inch cable is prepared and checked for quantity of cables;
    3. Visual inspection of eight-inch cable is conducted;
    4. Wire insulation is stripped using a stripping machine; the wire 
is cut to proper length for use as a connector cable; and, the wire's 
copper conductor is placed in tin stove to cover surface with tin;
    5. Top and bottom sides of the PCBA are soldered to the wiring;
    6. Initial PCBA function testing and visual inspection of video 
quality is conducted;
    7. A metal shell for the VGA female adapter is assembled and the 
PCBA is fitted into this shell;
    8. The VGA female adapter's metal shell is placed into a molding 
machine and a polyvinyl chloride (``PVC'') ``strain relief'' component 
is applied to the base of the metal casing;
    9. Acrylonitrile butadiene styrene (``ABS'') bottom and top shells 
are assembled for the DisplayPort male connector, placed over the metal 
shell, and punched to stamp the complete shell together;
    10. Final PCBA function testing is conducted;
    11. Visual inspection of video quality is conducted;
    12. An ABS shell for the VGA female connector is placed over the 
metal shell assembled in step 7 and stamped together; and
    13. The completed adapters are packaged in a zip bag and carton for 
shipment.
    You state that the PCBA is used to convert the DisplayPort++ signal 
into a VGA signal, which allows a VGA monitor to use the DisplayPort 
signal transmitted from a desktop or laptop via the adapter. The PCBA 
also contains a ``flash'' software program, which you state will detect 
whether the DisplayPort++ signal is acceptable. If the signal is 
acceptable, the software will notify the chipset that it can convert 
the DisplayPort++ signal to a VGA signal.

Issues

    What is the country of origin of the DisplayPort male to female 
adapter for purposes of U.S. Government procurement?
    What is the proper country of origin marking of the imported 
DisplayPort male to female
    adapter?

Law and Analysis

Government Procurement

    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

[[Page 54845]]

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 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.
    As previously noted, the adapter is assembled in China with a 
Taiwanese-origin PCBA. Taiwan is a TAA-designated country, and China is 
not.
    In order to determine 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).
    In C.S.D. 85-25, 19 Cust. Bull. 544 (1985), CBP held that for 
purposes of the Generalized System of Preferences (``GSP''), the 
assembly of a large number of fabricated components onto a printed 
circuit board in a process involving a considerable amount of time and 
skill resulted in a substantial transformation. In that case, in excess 
of 50 discrete fabricated components (such as resistors, capacitors, 
diodes, integrated circuits, sockets, and connectors) were assembled 
onto a Printed Circuit Board (``PCB''). CBP determined that the 
assembly of the PCBA involved a very large number of components and a 
significant number of different operations, required a relatively 
significant period of time, skill, attention to detail, and quality 
control.
    As CBP considers the totality of circumstances in its substantial 
transformation analysis, considerations such as the origin of a PCBA 
may be taken into account together with the nature of the overall 
assembly operations. Indeed, in several matters, CBP has determined 
that the PCBA provides the character of the subject devices and, 
accordingly, the country of origin is that in which the PCBA is 
manufactured. For example, in Headquarters Ruling Letter (``HQ'') 
H331515, dated December 6, 2023, CBP determined that the use of SMT to 
create a PCBA in Mexico with the assembly of a Chinese light-emitting 
diode (``LED'') strip resulted in a substantial transformation. And in 
HQ H304124, dated November 19, 2019, CBP determined the country of 
origin of a cardiac monitoring strip to be Finland, the country of 
origin of the device's PCBA, because the PCBA again provided the 
functionality and essence of the monitoring strips. See also, HQ 
H322417, dated February 23, 2022 (finding the PCBA imparts the 
character of a smart watch).
    Based on the information submitted, we find that the various 
components are substantially transformed when assembled into the PCBA 
in Taiwan. Similar to the decisions above, a variety of electronic 
components are added to the raw PCB via SMT in Taiwan to create the 
subject PCBAs. This includes the main chipset, which enables the 
subject device to convert the DisplayPort++ signal into a VGA signal. 
Of particular importance, we also note that it is the PCBA that enables 
the device to function as a connector, and, therefore, it imparts the 
character of the subject device. Furthermore, we note that the 
processing in China, which consists of wire cutting, stamping, fitting, 
and visual inspection, is not sufficiently complex and meaningful to 
result in a substantial transformation. Instead, as described above, 
the components added in China consist of casing and wires used to 
facilitate the functions performed by the PCBA. Based on the 
information provided, we conclude that the country of origin of the 
adapter is Taiwan, where the PCBA is manufactured. Accordingly, we find 
that the subject DisplayPort male to female adapter would be the 
product of a foreign country or instrumentality designated pursuant to 
19 U.S.C. 2511(b)(1).

Country of Origin Marking

    Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), 
provides that unless excepted, every article of foreign origin imported 
into the United States shall be marked in a conspicuous place as 
legibly, indelibly, and permanently as the nature of the article (or 
its container) will permit, in such a manner as to indicate to the 
ultimate purchaser in the United States, the

[[Page 54846]]

English name of the country of origin of the article. The Congressional 
intent in enacting 19 U.S.C. 1304 was ``that the ultimate purchaser 
should be able to know by an inspection of the marking on the imported 
goods the country of which the goods is the product. The evident 
purpose is to mark the goods so that at the time of purchase the 
ultimate purchaser may, by knowing where the goods were produced, be 
able to buy or refuse to buy them, if such marking should influence his 
will.'' United States v. Friedlander & Co., 27 C.C.P.A. 297 at 302; 
C.A.D. 104 (1940) (emphases added).
    Part 134 of CBP's Regulations (19 CFR part 134), implements the 
country of origin marking requirements and exceptions of 19 U.S.C. 
1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines 
``country of origin'' as:

    [T]he country of manufacture, production, or growth of any 
article of foreign origin entering the United States. Further work 
or material added to an article in another country must effect a 
substantial transformation in order to render such other country the 
``country of origin'' within the meaning of this part. . . .

    As outlined above, courts have held that a substantial 
transformation occurs when an article emerges from a process with a new 
name, character or use different from that possessed by the article 
prior to processing. E.g., Energizer Battery, Inc. v. United States, 
190 F. Supp. 3d 1308 (Court Int'l Trade 2016); United States v. Gibson-
Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool 
Corp. v. United States, 16 CIT 308 (1992), aff'd, 989 F.2d 1201 (Fed. 
Cir. 1993); Anheuser Busch Brewing Association v. United States, 207 
U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 
(Court Int'l Trade 1982).
    Based on the information and analysis provided above, the imported 
PCBA components undergo a substantial transformation when manufactured 
into the subject PCBA in Taiwan. In contrast, the PCBA does not undergo 
a change in name, character, and use during the final assembly process 
occurring in China, which is comparatively simple in nature. As a 
result, the country of origin for marking purposes of the subject 
DisplayPort male to female adapter is Taiwan, where the PCBA is 
manufactured.

Holding

    Based on the facts and analysis set forth above, the DisplayPort 
male to female adapter, comprised of a Taiwan-origin PCBA, would be the 
product of a foreign country or instrumentality designated pursuant to 
19 U.S.C. 2511(b). In addition, the country of origin for marking 
purposes of the adapter is 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. 2024-14549 Filed 7-1-24; 8:45 am]
BILLING CODE 9111-14-P