[Federal Register Volume 75, Number 197 (Wednesday, October 13, 2010)]
[Notices]
[Pages 62847-62849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-25666]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning an ADFLO\TM\ 
Respiration System

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 an Adflo<SUP>TM</SUP> Respiration System used in a 
welding environment. Based upon the facts presented, CBP has concluded 
in the final determination that Sweden is the country of origin of the 
Adflo<SUP>TM</SUP> Respiration System for purposes of U.S. government 
procurement.

DATES: The final determination was issued on October 6, 2010. 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 on or before November 12, 2010.

FOR FURTHER INFORMATION CONTACT: Robert Dinerstein, Valuation and 
Special Programs Branch: (202) 325-0132.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on October 6, 
2010, 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 Adflo<SUP>TM</SUP> Respiration System which 
may be offered to the U.S. Government under an undesignated government 
procurement contract. This final determination, in HQ H112725, was 
issued at the request of 3M Company, 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 
and precedent from the Court of International Trade in Uniden America 
Corporation v. United States, 120. Supp. 2d. 1091, (Ct. Int'l Trade 
2000), that a battery charger included with the Adflo<SUP>TM</SUP> 
System, lost its separate identity and became part of the system 
rendering Sweden the country of origin of the Adflo<SUP>TM</SUP> 
Respiration System for purposes of U.S. government procurement. With 
respect to a cloth bag enclosed with the Adflo<SUP>TM</SUP> respiration 
system, because it is a textile product, we indicated that its country 
of origin is to be determined in accordance with rules for the country 
of origin of textile products set forth in 19 U.S.C. 3592 and CBP 
Regulations at 19 CFR 102.21. Since we did not have enough information, 
we could not rule on the country of origin of the bag.
    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.


[[Page 62848]]


    Dated: October 6, 2010.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.
Attachment

HQ H112725

October 6, 2010

MAR-02 OT:RR:CTF:VS H112725 RSD

CATEGORY: Marking

Mr. Matthew Fuller
Trade Compliance Department
3M Company
3M Center
Building 225-4S-18
St. Paul, Minnesota 55144-1000

RE: Final Determination U.S. Government Procurement, Title III, 
Trade Agreements Act of 1979 (19 U.S.C. Sec.  2511); Subpart B Part 
177, CBP
Regulations; Country of Origin; Adflo<SUP>TM</SUP> Respiration 
System

    Dear Mr. Fuller:
    This is in response to a letter dated June 24, 2010, submitted 
by the law firm K&L Gates on behalf of the 3M Company requesting a 
final determination pursuant to subpart B Part 177, Customs and 
Border Protection (``CBP'') Regulations (19 CFR Sec.  177.21 et. 
seq.). CBP issues country of origin advisory rulings and final 
determinations on 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. A 
telephone conference was conducted on August 12, 2010, with you and 
your counsel to discuss this matter. We have also received a 
supplemental submission via email on September 7, 2010.
    This final determination concerns the country of origin of the 
Adflo<SUP>TM</SUP> respirator system. We note that 3M Company is a 
party-at-interest within the meaning of 19 C.F.R. Sec.  177.22(d)(1) 
and is entitled to request this final determination.

FACTS:

    The product at issue is the 3M Adflo <SUP>TM</SUP> respiration 
system. It is a powered air purifying respirator used for 
respiratory protection in a welding environment. The Adflo 
<SUP>TM</SUP> respiration system utilizes a ``stackable'' 
configuration, meaning that the Adflo <SUP>TM</SUP> cartridge can be 
stacked onto a high-efficiency particle filter for additional 
protection against organic, sulfur dioxide, chlorine, and hydrogen 
chloride vapors. The system's main components consist of a helmet 
and a powered blower unit. The powered blower unit delivers purified 
air into the helmet for protection of the user against contaminants 
encountered by the user in a welding environment. The helmet 
provides the primary protection for the user's head and eyes via the 
inclusion of an auto darkening lens which is sold separately.
    You state that the 3M Adflo <SUP>TM</SUP> respiration system is 
comprised of the following components: 1) HWR 9000 FV Helmet SW 
Assembly Complete, 2) ADFLO <SUP>TM</SUP> Turbo Subassembly with its 
particle filter indicator, 3) AF Battery, 4) ADFLO <SUP>TM</SUP> 
Leather Belt, 5) ADFLO <SUP>TM</SUP> Rubber Breath tube, 6) AF Air 
flow indicator. All these components are stated to be manufactured 
in Sweden. Sometimes the helmet is equipped with a lens. There are 
two other minor components included in the system, an AF Battery 
Charger and a Gas Filter, which are made in Germany. It is our 
understanding that the gas filter is installed into the Adflo 
<SUP>TM</SUP> respiration system in Sweden. In addition, a cloth 
carrying bag stated to be made in the United States will be included 
with the respiration system as a courtesy item. The cloth bag serves 
no function to the use of the product other than to store and carry 
the product when it is not in use. During the telephone conference, 
it was indicated that the cloth bag may be eventually sourced from 
other countries, such as China.
    All components are packaged at 3M's Valley, Nebraska facility. 
The system is not fully assembled when it is shipped to the United 
States. Rather, all the components are packaged together and the 
final minor assembly is performed by the customer (e.g., the 
customer in the United States attaches the Adflo <SUP>TM</SUP> 
Rubber Breath tube to the helmet and the powered Adflo <SUP>TM</SUP> 
Turbo (blower) unit). You indicate that the Swedish components 
account for 86.2 percent of the value of the Adflo <SUP>TM</SUP> 
respiration system when it sold without the lens and 87.8-88.1 
percent of its value when it is sold with a lens. The German origin 
battery charger accounts for 12.9 percent (without a lens) or 11.2-
11.4 percent (with a lens) of the value of the Adflo <SUP>TM</SUP> 
respiration system. The remaining 0.87 percent (without a lens) or 
0.75-0.77 percent (with a lens) of the value of the Adflo 
<SUP>TM</SUP> respiration system is attributable to the U.S. 
component, which is the cloth bag.

ISSUE:

    What is the country of origin of the Adflo <SUP>TM</SUP> 
Respiration System for purposes of government procurement?

LAW AND ANALYSIS:

    Pursuant to Subpart B of Part 177, 19 C.F.R. Sec.  177.21 et 
seq., which implements Title III of the Trade Agreements Act of 
1979, as amended (19 U.S.C. Sec.  2511 et seq.), CBP issues country 
of origin advisory rulings and final determinations on 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.
    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 Sec.  177.21. In this regard, CBP recognizes 
that the Federal Procurement 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 Sec.  
25.403(c)(1).
    Under the rule of origin set forth under 19 U.S.C. Sec.  
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 C.F.R. Sec.  177.22(a).

    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. See Texas Instruments, 
Inc. v. United States, 69 CCPA 152, 681 F.2d 778 (1982). 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, 6 Ct. Int'l Trade 204, 573 F. Supp. 1149 (1983), 
aff'd, 741 F.2d 1368 (Fed. Cir. 1984).
    Initially, we note that only three of the components of the 
Adflo <SUP>TM</SUP> respiration system are not made in Sweden, a 
battery charger and a gas filter which are made in Germany, and a 
cloth carrying bag made in the United States. Because the gas filter 
will be permanently installed in Sweden to become a part of the 
Adflo <SUP>TM</SUP> respiration system, we find that the gas filter 
will lose its separate identity and be substantially transformed in 
Sweden.
    In contrast, we note that no processing is performed on the 
battery charger and the cloth bag other than packaging them together 
with the other components of the Adflo <SUP>TM</SUP> respiration 
system. CBP will not usually consider a simple packaging operation 
to result in a substantial transformation of an article. See 
Headquarters Ruling (HQ) 559287 dated December 16, 1995. Nonetheless 
in Uniden America Corporation v. United States, 120. Supp. 2d. 1091, 
(Ct. Int'l Trade 2000), the Court of International of Trade (CIT) 
considered the assembly of a cordless telephone and the installation 
of their detachable A/C (alternating current) adapters. The CIT 
applied an ``essence test'' and found that the ``[t]he essence of 
the telephone is housed in the base and the handset. The court noted 
that consumers do not buy the article because of the specific 
function of the A/C adapter, but rather because of what the 
completed handset and base provide: communication over telephone 
wires. The court in Uniden found that the detachable A/C adapter was 
substantially transformed pursuant to the Generalized System of 
Preference (GSP) when installed into the cordless telephones. The 
court noted that the substantial transformation test is to be 
applied to the product as a whole and not to each of its detachable 
components. Consequently, the court found that the A/C adapter was a 
part of the cordless phone and that it had a new character, use, and 
name.
    CBP has applied the CIT's analysis in Uniden to determine 
whether minor components when combined with a larger and a complex 
system would lose their separate identities to become part of that 
larger system. For example, in HQ H100055

[[Page 62849]]

dated May 28, 2010, we ruled on the country of origin of a lift unit 
for an overhead patient lift system. Among the issues that we 
considered was whether a battery charger, when inserted into the 
hand control unit inside the lift unit, was substantially 
transformed. Relying on the Uniden decision, we noted that the 
substantial transformation test should be applied to the product as 
a whole and not to each of the parts. We determined that the lift 
unit conveyed the essential character to the system and because the 
detachable hand control and the battery charger were parts of that 
system, they were substantially transformed when attached to the 
lift unit. Thus, we held that the country of origin of the hand 
control unit and battery charger when packaged with the lift unit 
was Sweden.
    In H089762 dated June 2, 2010, CBP determined that component 
parts and subassemblies that were used to produce a hand-held mobile 
computer were substantially transformed for government procurement 
purposes in Canada as a result of a complex assembly and 
installation of Canadian software programming in Canada. Included in 
the hand-held computer was a stylus and stylus holder from China. 
Although the stylus was merely included with the hand held computer 
and not permanently attached to it, our analysis did not find that 
the stylus and stylus holder kept their separate identities. 
Instead, the ruling only addressed the question of what was the 
country of origin of the whole hand-held computer system. We 
determined that Canada was the country of origin of the hand-held 
computer system, and thus those minor components such as the stylus 
and stylus holder were accepted as parts of that whole system. Thus, 
for country of origin purposes in a government procurement context, 
they lost their separate identity.
    In this instance, we believe that inclusion of the battery 
charger does not alter the essential character of the Adflo 
<SUP>TM</SUP> respiration system which is designed to provide 
respiratory protection in a welding environment. The battery charger 
is a very minor component when compared to the complexity of the 
Adflo <SUP>TM</SUP> respiration system. Consistent with the CIT's 
decision in Uniden and our decisions in HQ H100055 and HQ H089762, 
we find that the battery charger will lose its separate identity and 
become a part of the larger and more complex Adflo <SUP>TM</SUP> 
respiration system, when it is included with the system to be sold 
in the United States. Consequently, the country of origin of the 
Adflo <SUP>TM</SUP> respiration system is Sweden, which will be 
unaffected by the inclusion of the battery charger.
    However, the situation is different with respect to the cloth 
bag because it is a textile product, and there are special rules for 
determining the country of origin of textile products. The rules of 
origin for textile products for purposes of the customs laws and the 
administration of quantitative restrictions are set forth in 19 
U.S.C. Sec.  3592. These provisions are implemented in CBP 
Regulations at 19 C.F.R. Sec.  102.21. At this point, we do not have 
enough information to rule on the country of origin of the cloth bag 
when it is included with the Adflo <SUP>TM</SUP> system. In this 
instance, however, you state that the bag is of U.S. origin. In the 
event that the country of origin of the bag changes to a country 
other than the U.S., we will require further description of the bag, 
including its classification and a sample in order for us to provide 
a decision.

HOLDING:

    Based on the information provided, the German filter is 
substantially transformed when it is installed in Sweden into the 
Adflo <SUP>TM</SUP> respiration system. The battery charger loses 
its separate identity when it is included with the Adflo 
<SUP>TM</SUP> respiration system and since it is a minor component 
it also becomes a part of the Adflo <SUP>TM</SUP> respiration 
system. Therefore, the imported country of origin of Adflo 
<SUP>TM</SUP> respiration system for purposes of U.S. government 
procurement is Sweden. The country of origin of the cloth bag will 
be governed by the rules of origin for textiles set forth in 19 
C.F.R. Sec.  102.21.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 CFR Sec.  177.29. Any party-at-interest 
other than the party which requested this final determination may 
request, pursuant to 19 CFR Sec.  177.31 that CBP reexamine the 
matter anew and issue a new final determination. Pursuant to 19 CFR 
Sec.  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. 2010-25666 Filed 10-12-10; 8:45 am]
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