[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 AdfloTM 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
AdfloTM 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 AdfloTM 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 AdfloTM
System, lost its separate identity and became part of the system
rendering Sweden the country of origin of the AdfloTM
Respiration System for purposes of U.S. government procurement. With
respect to a cloth bag enclosed with the AdfloTM 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; AdfloTM 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
AdfloTM 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 TM respiration
system. It is a powered air purifying respirator used for
respiratory protection in a welding environment. The Adflo
TM respiration system utilizes a ``stackable''
configuration, meaning that the Adflo TM 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 TM respiration system is
comprised of the following components: 1) HWR 9000 FV Helmet SW
Assembly Complete, 2) ADFLO TM Turbo Subassembly with its
particle filter indicator, 3) AF Battery, 4) ADFLO TM
Leather Belt, 5) ADFLO TM 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
TM 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 TM
Rubber Breath tube to the helmet and the powered Adflo TM
Turbo (blower) unit). You indicate that the Swedish components
account for 86.2 percent of the value of the Adflo TM
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 TM
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
TM respiration system is attributable to the U.S.
component, which is the cloth bag.
ISSUE:
What is the country of origin of the Adflo TM
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 TM 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 TM 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 TM 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
TM 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 TM 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 TM
respiration system, when it is included with the system to be sold
in the United States. Consequently, the country of origin of the
Adflo TM 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 TM 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 TM respiration system. The battery charger loses
its separate identity when it is included with the Adflo
TM respiration system and since it is a minor component
it also becomes a part of the Adflo TM respiration
system. Therefore, the imported country of origin of Adflo
TM 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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