[Federal Register: November 21, 2002 (Volume 67, Number 225)]
[Notices]
[Page 70299-70300]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21no02-167]
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DEPARTMENT OF THE TREASURY
Customs Service
Notice of Issuance of Final Determination Concerning Laser
Printer Engines
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Notice of final determination.
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SUMMARY: This document provides notice that Customs has issued a final
determination concerning the country of origin of certain laser printer
engines which are sold to OEM's to be incorporated into laser printers
which will be offered to the United States Government. The final
determination found that, based upon the facts presented, the country
of origin of laser printer engines is Japan.
DATES: The final determination was issued on November 8, 2002. 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 30 days of November 21, 2002.
FOR FURTHER INFORMATION CONTACT: Karen S. Greene, Special
Classification and Marking Branch, Office of Regulations and Rulings
(202-572-8838).
SUPPLEMENTARY INFORMATION: Notice is hereby given that on November 8,
2002, pursuant to subpart B of part 177, Customs Regulations (19 CFR
part 177, subpart B), Customs issued a final determination concerning
the country of origin of certain laser printer engines which are sold
to OEM's to be incorporated into printers offered to the United States
Government . The U.S. Customs ruling number is HQ 562502. This final
determination was issued at the request of Canon, 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). The final determination concluded that, based upon the facts
presented, the assembly of the laser scanner unit subasssembly in Japan
and the final assembly in Japan of the laser scanner unit with other
components to create certain laser printer engines results in a
substantial transformation of the components imported into Japan.
Accordingly, the country of origin of the printer engines is Japan.
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, Customs Regulations (19 CFR 177.30), states 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.
Any party-at-interest, as defined in 19 CFR 177.22(d), may seek
judicial review of this final determination within 30 days of November
21, 2002.
Dated: November 8, 2002.
Glen E. Vereb,
Acting Assistant Commissioner, Office of Regulations and Rulings.
Attachment
HQ 562502
MAR-05 RR:CR:SM 562502 KSG
CATEGORY: Marking
Harvey M. Applebaum, Esq.,
Covington & Burling, 1201 Pennsylvania Avenue NW., Washington, DC
20004-2401.
Re: Country of origin of computer laser printer engines; substantial
transformation;19 CFR 177.22; procurement
Dear Mr. Applebaum: This is in response to your letter dated
June 4, 2002, on behalf of Canon, Inc., requesting a final
determination of origin pursuant to 19 CFR 177.22(c) regarding U.S.
Government procurement of certain laser printer engines assembled in
Japan.
Facts
Canon, Inc., is the foreign manufacturer and exporter of the
printer engine and therefore, a party-in-interest as defined in 19
CFR 177.22(d).
This case involves the Canon P1070 printer engine that is the
principal part of laser beam printers. Canon will sell the printer
engines exclusively to OEM's. The printer engine carries out most of
the electrophotographic process, including the exposure function.
The printer engine is composed of three subassemblies; the laser
scanner unit, the transfer feeder unit and outer covers. The laser
scanner unit is assembled in Japan using components manufactured in
Japan and other countries. The laser scanner unit performs the
exposure function. The transfer
[[Page 70300]]
feeder unit is assembled in China using components from Japan, China
and Thailand. The transfer feeder unit carries out the transfer and
fixing functions. The outer covers are manufactured in China.
The first set of assembly steps for the laser scanner unit in
Japan completes the laser unit subcomponent. Using setting
equipment, a laser chip and collimator lens unit are attached to the
laser unit printed circuit board (``PCB''). An operator solders the
terminal of the laser chip to the laser unit PCB. An operator then
adjusts the power of the laser beam radiated from the laser unit and
checks the laser unit exterior.
Following completion of the laser unit, an operator attaches
additional component parts to an optical case: using screws, an
operator attaches the beam detect (``BD'') sensor unit, scanner
motor unit, laser unit and BD mirror; using a fixing spring, an
operator attaches a reflection mirror; and using ultraviolet
adhesives, an operator attaches a toric lens, fo lenses and a
cylindrical lens. An operator measures and adjusts the power of the
laser beam and jitter (distortion of rotating shaft of scanner
motor).
Then, an operator determines the starting point of the laser
scanning. Finally, an operator attaches to the laser scanner unit a
BD sensor unit moltplane and motor wire harness moltplane (by seal),
a connector (by hand) and an outer cover (with screws). An operator
then checks the exterior of the laser scanner unit. You advised that
the assembly of the laser scanner unit requires precision.
The transfer feeder unit transfers the toner on the
photosensitive drum onto print paper. Assembly of the transfer
feeder unit in China involves many steps and is a time-consuming
process. This assembly includes attachment of the following
components to a mold frame unit: paper pick-up unit, paper feed
roller, registration roller unit, transfer charging roller unit, DC
controller unit, pick-up drive unit, main drive unit, fixing unit
and delivery roller unit. An operator then performs an electrical
check of the transfer feeder unit. Using screws, an operator next
attaches an outer cover and front cover to the transfer feeder unit.
Finally, an operator checks the paper feed function of the transfer
feeder unit.
The final assembly of the laser beam printer engine occurs in
Japan. Using screws, an operator fixes the laser scanner unit to the
transfer feeder unit. An operator attaches the following components
by hand to the laser scanner unit and transfer feeder unit: a laser
wire harness, scanner motor wire harness, and BD wire harness. An
operator then checks the electrical function of the engine to meet
internal electrical safety requirements. An operator next attaches
an auxiliary cover and display wire harness along with an upper
cover and panel unit. Following the engine assembly, an operator
evaluates the image of test pattern printouts to confirm that the
printer engine meets printing precision requirements. You indicate
that precise assembly is required for the printer engine.
Issue
Whether the printer engines are substantially transformed in
Japan so that they become products of Japan for U.S. Government
procurement purposes.
Law and Analysis
Under 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.), the Customs Service issues country of
origin advisory rulings and final determinations on whether an
article is or would be a product of a designated foreign 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.
Also see 19 CFR 177.22(a).
If the manufacturing or combining process is a minor one which
leaves the identity of the imported article intact, a substantial
transformation has not occurred. See Uniroyal Inc. v. United States,
3 CIT 220, 542 F. Supp. 1026 (CIT 1982). Assembly operations which
are minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. See C.S.D. 80-
111, C.S.D. 85-25, and C.S.D. 90-97.
In Texas Instruments Inc. v. United States, 681 Fed 2d 778 (CCPA
1982), the court held that the assembly of encapsulated integrated
circuits in Taiwan from materials imported from the U.S. constituted
a double substantial transformation for the purposes of the
Generalized System of Preferences (``GSP''). The imported goods
involved in the case were electronic camera parts called ``cue
modules'' that consist of a flexible circuit board with three
integrated circuits attached. The court determined that silicon
slices were imported into Taiwan and then further manufactured in
Taiwan into IC chips. The IC chips were then manufactured into
finished IC's. The court noted that the question presented was ``a
mixed question of technology and customs law. * * *'' The court
concluded that the finished IC's were ``the result of extensive
manufacturing operations in Taiwan which converted materials into
articles, as distinguished from mere assembly * * *'' and determined
that a double substantial transformation had occurred.
Customs ruled in Headquarters Ruling Letter (``HRL'') 561734,
dated March 23, 2001, 66 Fed. Reg. 17222, that Sharp multifunctional
machines (printer, copier and fax machine) assembled in Japan were a
product of Japan for procurement purposes. The machines were
comprised of 227 parts (108 parts sourced from Japan, 92 parts from
Thailand, 3 parts from China, and 24 parts from other countries) and
eight subassemblies, each of which was also assembled in Japan.
Further, the scanner unit (one of the eight subassemblies) which was
assembled in Japan was characterized as ``the heart of the
machine.'' Also see HRL 561568, dated March 22, 2001, 66 Fed. Reg.
17222.
In HRL 560433, dated September 19, 1997, Customs held that the
assembly in the United Kingdom of audio/video stereo receivers from
16 subassemblies and other components originating from various
countries resulted in a substantial transformation. Customs noted in
that ruling that numerous skilled workers assembled the stereo
receivers from numerous components and hundreds of raw materials. In
HRL 734045, dated October 8, 1991, Customs held that foreign
subassemblies and other components imported into Hong Kong which
were processed and assembled with other domestic components to make
laptop and notebook personal computers were substantially
transformed as a result of the Hong Kong operations.
Based on the facts in this case and consistent with HRL 561734
and HRL 560433, we find that the printer engines are substantially
transformed in Japan. When taken together, the manufacture of the
laser scanner unit and final assembly of the printer engine in Japan
is complex and meaningful. There are numerous parts involved in the
assembly of the laser scanner unit and the final assembly of the
printer engine. The assembly requires precision and trained workers.
Further, as noted in HRL 561734, the scanner unit is an integral
part of the printer engine. The name, character and use of the
subassemblies and parts imported into Japan change as a result of
the processing and other assembly operations performed in Japan.
Therefore, pursuant to 19 U.S.C. 2518(4)(B), we find that the
country of origin of the printer engines is Japan.
Holding
Based on the facts presented, the components imported into Japan
that are used in the manufacture of the computer printer engines
involved in this case are substantially transformed in Japan.
Accordingly, pursuant to 19 U.S.C. 2518(4)(B), the country of origin
of the printer engines is Japan.
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 Customs reexamine the matter anew
and issue a new final determination.
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,
Glen E. Vereb,
Acting Assistant Commissioner, Office of Regulations and Rulings.
[FR Doc. 02-29567 Filed 11-20-02; 8:45 am]
BILLING CODE 4820-02-P