[Federal Register Volume 74, Number 64 (Monday, April 6, 2009)]
[Notices]
[Pages 15510-15513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7609]


-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Ground Fault 
Circuit Interrupter

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

-----------------------------------------------------------------------

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 ground fault circuit interrupter (``GFCI''). 
Based upon the facts presented, CBP has concluded in the final 
determination that Mexico is the country of origin of the GFCI for 
purposes of U.S. government procurement.

DATES: The final determination was issued on March 26, 2009. 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 May 6, 2009.

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

SUPPLEMENTARY INFORMATION: Notice is hereby given that on March 26, 
2009, pursuant to subpart B of part 177, Customs Regulations (19 CFR 
part 177, subpart B), CBP issued a final determination concerning the 
country of origin of the GFCI which may be offered to the U.S. 
Government under an undesignated government procurement contract. This 
final determination, in HQ H047362, was issued at the request of Pass & 
Seymour, 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 GFCI, assembled in 
Mexico from parts made in China, is substantially transformed in 
Mexico, such that Mexico is the country of origin of the finished 
article for purposes of U.S. government procurement.
    Section 177.29, Customs 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: March 26, 2009.
Sandra L. Bell,
Executive Director, Office of Regulations and Rulings, Office of 
International Trade.
Attachment

March 26, 2009.

MAR-2-05 OT:RR:CTF:VS H047362 EE

CATEGORY: Marking

Daniel B. Berman, Esq., Hancock & Estabrook, LLP, 1500 AXA Tower I, 
100 Madison Street, Syracuse, NY 13202.

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 Marking; Ground Fault Circuit Interrupter.

    Dear Mr. Berman: This is in response to your correspondence of 
November 20, 2008, requesting a final determination on behalf of 
Pass & Seymour, Inc. (``P&S''), pursuant to subpart B of part 177, 
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 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.
    This final determination concerns the country of origin of a 
ground fault circuit interrupter (``GFCI''). We note that P&S is a 
party-at-interest within the meaning of 19 CFR Sec.  177.22(d)(1) 
and is entitled to request this final determination.
    You also request a country of origin marking determination.
    FACTS: You describe the pertinent facts as follows. The business 
of P&S includes the design, manufacture, and distribution of GFCIs 
in the U.S. for residential and commercial use in electrical 
circuits of less than 1,000 volts. The GFCIs are electrical 
components, designed for permanent installation in electrical 
circuits, which are able to detect small imbalances in the circuit's 
current caused by leakages of current to ground. When leakage is 
detected, the GFCI opens the electrical circuit, stopping the flow 
of current. Legrand, the parent company of P&S, produces the 
components of the GFCI in China through another subsidiary, Rocom 
Electric Co. Ltd. (``Rocom''). Rocom plans to ship the components to 
a facility in Mexico where thirty-two of the components will be 
assembled in a forty-two step process into a Printed Circuit Board 
subassembly (``PCB''), which will in turn be assembled, with twenty-
nine other components, into the GFCI in a forty-three step process. 
The GFCI will be tested and packaged at the same facility. Upon 
completion of assembly, testing, and packaging, the GFCI will be 
imported into the U.S. by P&S for sale and distribution.
    The components from China include the following: cover, reset 
button, test button, light pipe, strap assembly, assembly terminals, 
contact, separator, springs, latch block top, spark gap blades, 
assembly screw

[[Page 15511]]

terminals, armature, spring assembly, term assemblies, resistors, 
capacitors, diodes, LEDs, latches, solenoids, wires, back body, 
miswire cap, screws, and labels. A complete list of the sixty-one 
components was included with your submission. You have provided six 
exhibits, which include schematics, photographs, and the step-by-
step assembly process of the GFCI in Mexico. Exhibit G shows phase 
one (the assembly of the PCB), which is comprised of forty-two 
discreet steps and thirty-two parts, takes approximately twelve 
minutes. Exhibit D shows phase two (the assembly of the GFCI from 
components including the PCB), which is comprised of forty-three 
discrete steps and thirty parts, takes approximately ten minutes. 
You claim that each step, unless otherwise noted, is completed by 
skilled workers who undergo an extensive training process.
    PCB assembly process:
    1. Apply adhesive to PCB (in three-up array).
    2-25. Place surface-mount electronic components onto foil-side 
of PCB: fourteen resistors; nine capacitors; integrated circuit.
    26. Cure adhesive in oven.
    27-32. Place leaded electronic components onto top-side of PCB: 
two jumper wires; Medal Oxide Varistor; Diode; Silicon Controlled 
Rectifier; Light Emitting Diode.
    33-34. Assemble bobbin solenoid subassembly--bobbin, latch 
block, latch, spring and auxiliary contact (two pcs). Fit 
subassembly into corresponding holes in PCB.
    35. Place spring over solenoid plunger and insert into hole in 
solenoid.
    36. Fit toroid subassembly into corresponding holes in PCB.
    37. Place leaded resistor through hole in toroid subassembly 
into PCB.
    38. Send PCB subassembly (still in array) through wave solder 
machine.
    39. Visually inspect solder side of PCB after wave solder, 
touch-up as required.
    40. Hand solder in miswire link between resistors R9 and R15.
    41. Send assembly through in-circuit test for component 
verification and measurement.
    42. Place array in press and singulate individual PCB 
subassemblies from array.
    GFCI assembly process:
    1. Place back body into date code fixture/stamping-press and 
press button to apply date code on side of back body.
    2. Remove back body from date code fixture. Place hot terminal-
screw/pressure-plate assembly into back body cradle on line end.
    3. Place neutral terminal-screw/pressure-plate assembly into 
back body cradle on line end.
    4. Place PCB subassembly into back body, capturing terminal-
screw/pressure-plate subassemblies under line terminals.
    5. Place hot terminal-screw/pressure-plate subassembly into back 
body cradle on load end.
    6. Place neutral terminal-screw/pressure-plate subassembly into 
back body cradle on load end.
    7. Place hot load terminal subassembly into back body, over load 
screw/pressure plate subassembly.
    8. Place neutral load terminal subassembly into back body, over 
load screw/pressure plate assembly.
    9. Place two break springs into latch block.
    10. Place latch block with springs onto line contacts, aligning 
leg of latch block over auxiliary switch on PCB.
    11. Drop separator over device, aligning test resistor lead 
through hole in separator. Snap separator onto back body.
    12. Place strap subassembly into center channel of separator.
    13. Place hot-side load contact into slot in separator.
    14. Bend test resistor lead over with finger to test blade slot.
    15. Press test blade leg into slot in separator, capturing test 
resistor lead in slot on bottom leg of test blade.
    16. Place neutral-side load contact into slot in separator.
    17. Place light pipe into hole/slot in separator.
    18. Place reset button/pin/make spring subassembly into hole 
through strap/separator.
    19. Set two shutter subassemblies into pockets in device cover/
test button subassembly.
    20. Place cover/test-button subassembly on top of device, 
fitting over reset button subassembly and light pipe.
    21. Turn device over. Place four assembly screws in holes at 
corners of back body.
    22. Run assembly screws in and torque down with driver.
    23. Place device in automated final tester fixture.
    24. Short circuit test.
    25. False trip test.
    26. Trip level test in forward polarity, full load.
    27. Trip level test in reverse polarity, full load.
    28. Grounded-neutral test.
    29. Test-button test.
    30. Dielectric test.
    31. Response time test with 500 ohm fault resistor.
    32. If device passes all tests, hand solder link across solder 
bridge on bottom of PCB to activate miswire circuit.
    33. Depress reset button on device and place device in automatic 
miswire-function tester. Push button to initiate test to verify 
device trips.
    34. If device passes, snap plastic cap into back body, covering 
miswire solder bridge.
    35. Remove miswire label from roll and apply across back body 
and load terminal screws.
    36. Remove UL label from roll and apply to neutral side of 
device, overlapping back body, separator and cover.
    37. Place cardboard protector over face of device.
    38. Place wallplate subassembly with captive screws over 
cardboard protector and face of device.
    39. Take stack of three pre-folded instruction sheets and fuse 
box label and place under device.
    40. Remove product box label from roll and place on flap of 
individual box.
    41. Assemble individual box, closing flap on one end.
    42. Slide device, protector, wallplate and instruction sheets 
into individual box and close flap.
    43. Place individual box into carton for shipping.

ISSUES

    1. What is the country of origin of the GFCI for the purpose of 
U.S. government procurement?
    2. What is the country of origin of the GFCI for the purpose of 
marking?

LAW AND ANALYSIS

Government Procurement

    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 Sec.  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 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 determining whether the combining of parts or materials 
constitutes a substantial transformation, 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. Belcrest 
Linens v. United States, 573 F. Supp. 1149 (Ct. Int'l Trade 1983), 
aff'd, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are 
minimal or simple, as opposed to complex or meaningful, will 
generally not result in a substantial transformation. Factors which

[[Page 15512]]

may be relevant in this evaluation may 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. 
Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 
(1982), aff'd 702 F. 2d 1022 (Fed. Cir. 1983).
    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, 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 a number of rulings (e.g., HQ 735608, dated April 27, 1995 
and HQ 559089 dated August 24, 1995), CBP has stated: ``in our 
experience these inquiries are highly fact and product specific; 
generalizations are troublesome and potentially misleading. The 
determination is in this instance `a mixed question of technology 
and Customs law, mostly the latter.' '' Texas Instruments, Inc. v. 
United States, 681 F.2d 778, 783 (CCPA 1982).
    In C.S.D. 85-25, 19 Cust. Bull. 844 (1985), CBP held that for 
purposes of the Generalized System of Preferences, 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. In HQ 711967, dated March 17, 1980, CBP held that 
television sets which were assembled in Mexico with printed circuit 
boards, power transformers, yokes and tuners from Korea and picture 
tubes, cabinets, and additional wiring from the U.S. were products 
of Mexico for country of origin marking purposes. The U.S. and 
Korean parts were substantially transformed by the processing 
performed in Mexico and all the components lost their individual 
identities to become integral parts of the new article--a 
television. In HQ 561734, dated March 22, 2001, CBP held that 
certain multifunctional machines (consisting of printer, copier, and 
fax machines) assembled in Japan were a product of that country for 
the purposes of U.S. government procurement. The multifunctional 
machines were assembled from 227 parts (108 parts obtained from 
Japan, 92 from Thailand, 3 from China, and 24 from other countries) 
and eight subassemblies, each of which was assembled in Japan. In 
finding that the imported parts were substantially transformed in 
Japan, CBP stated that the individual parts and components lost 
their separate identities when they became part of the multi-
functional machine. See also HQ 561568, dated March 22, 2001.
    This case involves sixty-one components manufactured in China 
which are proposed to be assembled in Mexico in a two phase process, 
largely by skilled workers using sophisticated equipment. The first 
phase is the assembly of the PCB and involves a forty-two step 
process which will take approximately twelve minutes. After a 
careful consideration of the pertinent facts and authorities, we 
find that the assembly of the PCB, which consists of inserting all 
active and passive components into a bare printed circuit board and 
soldering all components necessary for the completion of the 
subassembly, is technically complex. Further, the PCB has all the 
major components necessary for the GFCI to fulfill its function. 
These components include the active and passive components, the 
solenoid bobbin assembly with both coils/inductors, hot and neutral 
``Line'' terminals, test, trip and reset contacts. Therefore, the 
PCB imparts the essential character of the GFCI.
    In the second phase, the PCB will be assembled with twenty-nine 
other components, into the GFCI in a forty-three step process which 
will take approximately ten minutes. Under the described two-phase 
assembly process, the foreign components lose their individual 
identities and become an integral part of a new article, the GFCI, 
possessing a new name, character and use. Based upon the information 
before us, we find that the components that are used to manufacture 
the GFCI, including the technically complex PCB assembled in Mexico, 
are substantially transformed as a result of the assembly operations 
performed in Mexico, and that the country of origin of the GFCI for 
government procurement purposes is Mexico.

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 container) will permit, in such manner as 
to indicate to the ultimate purchaser in the U.S. the English name 
of the country of origin of the article.
    Part 134, CBP Regulations (19 CFR 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 the 
country of origin of an article as the 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 for country of 
origin marking purposes; however, for a good of a NAFTA country, the 
NAFTA Marking Rules will determine the country of origin.
    Section 134.1(j), CBP Regulations provides that the ``NAFTA 
Marking Rules'' are the rules promulgated for purposes of 
determining whether a good is a good of a NAFTA country. Section 
134.1(g), CBP Regulations defines a ``good of a NAFTA country'' as 
an article for which the country of origin is Canada, Mexico or the 
United States as determined under the NAFTA Marking Rules.
    Part 102, CBP Regulations (19 CFR 102), sets forth the ``NAFTA 
Marking Rules'' for purposes of determining whether a good is a good 
of a NAFTA country. Section 102.11, CBP Regulations (19 CFR Sec.  
102.11) sets forth the required hierarchy for determining country of 
origin for marking purposes. Section 102.11(a), CBP Regulations 
provides that the country of origin of a good is the country in 
which:
    (1) The good is wholly obtained or produced;
    (2) The good is produced exclusively from domestic materials; or
    (3) Each foreign material incorporated in that good undergoes an 
applicable change in tariff classification set out in section 102.20 
and satisfies any other applicable requirements of that section, and 
all other requirements of these rules are satisfied.
    ``Foreign Material'' is defined in section 102.1(e), CBP 
Regulations as ``a material whose country of origin as determined 
under these rules is not the same country as the country in which 
the good is produced.''
    Section 102.11(a)(1) and (2) do not apply to the facts presented 
in this case because the GFCI, assembled in Mexico from Chinese 
components, is neither wholly obtained or produced, nor produced 
exclusively from domestic (i.e., Mexican) materials. Since an 
analysis of sections 102.11(a)(1) and 102.11(a)(2) will not yield a 
country of origin determination, we look to section 102.11(a)(3) to 
determine whether the foreign materials incorporated in the GFCI 
undergo an applicable change in tariff classification (or other 
applicable requirement) under section 102.20. The GFCI is classified 
in subheading 8536.30.80, Harmonized Tariff Schedule of the United 
States (``HTSUS''). The applicable tariff shift rule found in 
section 102.20(o) provides as follows:

8536.10-8536.90 A change to subheading 8536.10 through 8536.90 from 
any other subheading, including another subheading within that 
group.

    In this case, the foreign materials incorporated in the GFCI are 
classified in subheadings other than subheading 8536.30, HTSUS. 
Since the components are classified in a different subheading than 
the GFCI, the requisite tariff shift rule is met. Therefore, 
pursuant to 19 CFR 102.11(a)(3), the country of origin of the GFCI 
is Mexico.
    With regard to the marking requirements, section 134.43(e), CBP 
Regulations (19 CFR 134.43(e)), provides, in pertinent part that:
    Where an article is produced as a result of an assembly 
operation and the country of origin of such article is determined 
under this chapter to be the country in which the

[[Page 15513]]

article was finally assembled, such article may be marked, as 
appropriate, in a manner such as the following:
    (1) Assembled in (country of final assembly);
    (2) Assembled in (country of final assembly) from components of 
(name of country or countries of origin of all components); or
    (3) Made in, or product of, (country of final assembly).
    The GFCI was the result of an assembly operation and was finally 
assembled in Mexico within the meaning of 19 CFR 134.43(e). 
Therefore, we find that the GFCI may be marked ``Made in Mexico,'' 
``Assembled in Mexico,'' or ``Product of Mexico.''

HOLDINGS

    The components that are used to manufacture the GFCI are 
substantially transformed as a result of the assembly operations 
performed in Mexico. Therefore, the country of origin of the GFCI 
for government procurement purposes is Mexico.
    Pursuant to 19 U.S.C. 1304, the country of origin of the GFCI 
for country of origin marking purposes is Mexico.
    The GFCI may be marked ``Made in Mexico,'' ``Assembled in 
Mexico,'' or ``Product of Mexico.''
    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,

Sandra L. Bell,
Executive Director, Office of Regulations and Rulings, Office of 
International Trade.
[FR Doc. E9-7609 Filed 4-3-09; 8:45 am]
BILLING CODE 9110-06-P