9111-14 DEPARTMENT OF HOMELAND SECURITY U.S. Customs and Border Protection Notice of Issuance of Final Determination Concerning UPanelS LED Display Panels 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 various models of LED display panels sold under the UPanelS brand. Based upon the facts presented, CBP has concluded in the final determination that the components of the subject UPanelS devices undergo substantial transformation in Taiwan upon the manufacture of their printed circuit board assembly (PCBA) and light-emitting diode (LED) lamp assembly. DATES: The final determination was issued on June 10, 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 within [INSERT 30 DAYS FROM DATE OF PUBLICATION IN THE FEDERAL REGISTER]. FOR FURTHER INFORMATION CONTACT: Austen Walsh, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade, at austen.m.walsh@cbp.dhs.gov. SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 10, 2024, CBP issued a final determination concerning the country of origin of various models of LED display panels sold under the UPanelS brand for purposes of title III of the Trade Agreements Act of 1979. This final determination, HQ H332752, was issued at the request Unilumin USA LLC (Unilumin), 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 components, which are largely sourced from China and Taiwan, are substantially transformed in Taiwan when made into the subject UPanelS devices. Section 177.29, CBP 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. Alice A. Kipel, Executive Director, Regulations and Rulings, Office of Trade. HQ H332752 June 10, 2024 OT:RR:CTF:VS H332752 AMW CATEGORY: Origin Ms. Angelica Tsakiridis Managing Director—Global Trade Advisory Deloitte LLP 555 Mission Street, Suite 1400 San Francisco, CA 94105 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 UPanelS Products Dear Ms. Tsakiridis: This is in response to your request, dated September 8, 2021, on behalf of your client, Unilumin USA LLC (“Uniluminâ€), for a final determination concerning the country of origin of the “UPanelS†product line of light-emitting diode (“LEDâ€) display panels, pursuant to Title III of the Trade Agreements Act of 1979 (“TAAâ€), as amended (19 U.S.C. 2511 et seq.), and subpart B of Part 177, U.S. Customs and Border Protection (“CBPâ€) 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. Unilumin 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: Unilumin imports various models of “high-performance [LED] display[s]†sold under the UPanelS product line. The UPanelS product line consists of a series of display units capable of producing high-definition video or photographic images differentiated primarily by pixel pitch. The UPanelS devices are used in commercial and educational settings as signage or digital displays, including in large format settings such as concert backdrops or film sets.1 UPanelS devices are capable of being affixed directly into a wall mount, displayed free standing, or hung with hanging beams.2 Each UPanelS consists of two major sub-assemblies: a “module board†and a “cabinet housing.†The module board drives and controls each LED unit, forming images for display. The cabinet encases the device and provides the power supply function. The module board is assembled in Taiwan and is comprised of two subassemblies that are also assembled in Taiwan: (1) the main printed circuit board assembly (“PCBAâ€) with LED lamps; and (2) the HUB board and receiver card. The main PCBA with LED lamps consists of the main PCBA, which regulates the flow of power to the LED lamps; and the LED lamps See “What makes a successful interactive LED wall,†available at https://www.unilumin-usa.com/led-101/whatmakes-a-successful-interactive-led-wall/ (accessed Jan. 8, 2024). 2 UPanelS Product guide, available at https://www.unilumin-usa.com/wp-content/uploads/2020/02/upanels-1.pdf (accessed Jan. 8, 2024). (originating in Taiwan), which light to form viewable images. The HUB board and receiver cards assembly consists of the HUB board, a separate PCBA printed in China that relays information between the receiver card and module board; a receiver card (originating in either Taiwan or Romania), which reads programmed command signals regulating the brightness and color of the LEDs and sequencing the display; and the indicator light board (originating in Taiwan), which displays power supply indicators to the LED lamps. Assembly of the main PCBA with LED lamps occurs in Taiwan over approximately 12 steps, which involve the creation of the PCBA via surface mount technology (“SMTâ€) and the placement of LED lamps onto the non-printed side of the PCBA: 1. Mount handling fixture to the integrated circuit (“ICâ€) side of a Chinese-origin bare printed circuit board (“PCBâ€); 2. Print components onto the PCB; 3. Inspect solder paste; 4. Mount remaining miscellaneous components onto PCB; 5. Cure the board in reflow oven; 6. Remove fixture(s) mounted to the IC side of the PCB in step one and mount a fixture to the LED side; 7. Print onto the reverse side of the PCB; 8. Inspect solder paste; 9. Mount components; 10. Cure the board in a reflow oven; 11. Apply conformal coating on PCB; 12. Install gasket onto PCB. Next, assembly of the HUB board and receiver card occurs in the following steps: 1. Paste installation stickers to a lower/bottom shell (the “turtle shellâ€) and blacken the bottom with a pen; 2. Insert the receiver card into the HUB board and place the HUB board into the bottom of the turtle shell; 3. Divide the indicator light board into several smaller boards, affix the indicator lights, and connect them with the module board adapter; 4. Paste and scan serial number; and 5. Install the HUB board assembly on the turtle shell and check for flatness and gaps. The fully assembled PCBA with LED lamps is then combined with the HUB board and receiver card assembly to form the completed module board. Once combined, the LED lamps can light and display video or photographic images. The cabinet is the second major subassembly of the completed UPanelS. The cabinet houses the module board and provides the power supply to the finished device. The cabinet also enables the combination of multiple module boards to create larger-format arrays (e.g., 4x4 or 2x1 configurations). The cabinet is comprised almost entirely of Chinese-origin components, and contains the following sub-assemblies: power supply adapter board, power supply, motor assembly, power signal combination connector, and wall controller. The cabinet is assembled in Taiwan in approximately six steps: 1. Affix the power cables to the cabinet; 2. Affix the lacing strip, three core cables, and ground cables to the cabinet; 3. Affix the adapter board to the cabinet; 4. Assemble left and right-side motor and assemble cables with electric screwdriver; 5. Connect internet cables to the power supply adapter board; and 6. Fit the insulating gasket on the power supply cover and affix the power supply cover. Once the module board and cabinet are completed, they are shipped to China where they are combined into a complete UPanelS unit and tested for functionality. Afterwards, the UPanelS is disassembled and separately packaged for shipment to the United States. Each UPanelS will be imported into the United States in one of two ways: (1) the UPanelS’s finished module board and cabinet are imported as two separately packaged, unique product numbers entered in the same shipment; or (2) the module board and cabinet are entered in the same shipment as separately packaged products along with a separate “wall controller unit.â€3 You state that the UpanelS is imported in an unassembled condition because the finished module board and cabinet are delicate and that shipping the components in a single box may damage the panels. To aid installation in the United States, each module board or cabinet will be assigned a serial number or code allowing for the recombination of each module board with its corresponding cabinet. ISSUE: What is the country of origin of the Unilumin UPanelS for purposes of U.S. Government procurement? LAW AND ANALYSIS: 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 177.21177.31, 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 CFR Part 0 - Treasury Department Order No. 100-16, 68 Fed. Reg. 28,322 (May 23, 2003). The rule of origin set forth under 19 U.S.C. 2518(4)(B) states: According to the request, the wall controller unit is a third sub-module that, when connected to the UPanelS, receives data signals from a source and translates and transmits those signals to the receiver card component of the module board. When fully assembled, the UPanelS connects to the wall controller via a category 5 cable. The wall controller unit will originate in Germany, Taiwan, or the United 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 (“FARâ€). 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. Once again, we note that the subject UPanelS devices are assembled in Taiwan, a TAAdesignated country, with components sourced from TAA-designated countries (e.g., Taiwan, Japan) and non-TAA-designated countries (e.g., China). In determining 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). The Court of International Trade (“CITâ€) more recently interpreted the meaning of “substantial transformation†in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016). Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight. All the components of the flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States and assembled into the finished Generation II flashlight. The Energizer court reviewed the “name, character and use†test utilized in determining whether a substantial transformation had occurred and noted, citing Uniroyal, Inc., 3 C.I.T. at 226, that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.†Energizer at 1318. In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.†Energizer at 1319, citing as an example, National Hand Tool Corp. In reaching its decision, the Energizer court expressed the question as one of whether the imported components retained their names after they were assembled into the finished Generation II flashlights. The court found “[t]he constitutive components of the Generation II flashlight do not lose their individual names as a result [of] the post-importation assembly.†The court also found that the components had a predetermined end-use as parts and components of a Generation II flashlight at the time of importation and did not undergo a change in use due to the post-importation assembly process. Finally, the court did not find the assembly process to be sufficiently complex as to constitute a substantial transformation. Thus, the court found that Energizer’s imported components did not undergo a change in name, character, or use as a result of the post-importation assembly into a finished Generation II flashlight. Virtually all of the components of the Generation II flashlight, including the most important component, the LED, were of Chinese origin. Accordingly, the court determined that China was the correct country of origin of the Generation II flashlights for purposes of government procurement. The CIT has also looked at the character of an article to determine whether its identity has been substantially transformed through assembly or processing. For example, in Uniroyal, Inc. v. United States, 3 C.I.T. at 225, the court held that imported shoe uppers added to an outer sole in the United States were the “very essence of the finished shoe†and thus the character of the product remained unchanged and did not undergo substantial transformation in the United States. Similarly, in National Juice Products Association v. United States, 10 C.I.T. 48, 61, 628 F. Supp. 978, 991 (1986), the court held that imported orange juice concentrate “imparts the essential character†to the completed orange juice and thus was not substantially transformed into a product of the United States. As CBP examines the totality of circumstances in its substantial transformation analysis, considerations such as the origin of a light source or a PCBA, while not determinative, may be considered together with the nature of the overall assembly operations. For example, in Headquarters Ruling Letter (“HQâ€) H304910, dated April 21, 2020, CBP determined the country of origin of three models of LED automotive lamps to be Mexico, the country in which the PCBA and LED lights were assembled together. For all three models, CBP determined that the assembly of the Japanese-origin LEDs and the Mexican-origin PCBAs in Mexico resulted in a substantial transformation. CBP determined that the SMT and wave soldering processes incorporated a large number of discrete parts onto a printed circuit board, which was a sufficiently “complex and meaningful†operation so as to result in a substantial transformation of the parts making up the product’s PCBA. In that case, LEDs were one of the discrete components incorporated into the PCBA. See also, HQ H331515, dated December 6, 2023 (citing HQ H304910 in determining the country of origin of a refrigerator shelf light, which included a PCBA and an LED light system, to be Mexico, the country of origin for the light’s PCBA); and C.S.D. 85-25, 19 Cust. Bull. 544 (1985) (finding assembly of more than 50 components onto PCB results in substantial transformation). CBP has also determined the origin of image or video-producing devices to be the country in which the underlying PCBA is produced. In HQ H218360, dated September 11, 2013, CBP considered the origin of devices used to “capture motion picture images and sound and send them digitally…to a similar unit at a different location….†In that matter, we found that the origin of the devices was the country in which the underlying “video processing electronic circuit board†and “network filter electronic circuit board†were produced because these items imparted the character of the devices as a video conferencing server. See also HQ H114395, dated May 18, 2011 (determining the country of origin of a pocket projector to be the location of assembly of the light engine module and PCBA). In the present matter, and in accordance with HQ H304910 and H218360, the assembly of the main PCBA in Taiwan results in a substantial transformation. We find that the SMT and curing processes incorporate a large number of discrete component parts onto a PCB, which is a sufficiently complex and meaningful operation so as to result in a substantial transformation of the parts making up the PCBA. Similar to HQ H331515, a variety of electronic components are added to the raw PCB via SMT in Taiwan to create the subject PCBAs. This includes the attachment of the Taiwanese-origin LED lamps. Of particular importance, we also note that it is the PCBA that enables the device to distribute power to the LED lamps and therefore imparts the character of the subject device. In addition, the Taiwanese-origin LED lamps also perform the important function of displaying the images to be viewed. Furthermore, we find that the processing in China, which consists of “installing†and “attaching†the subassemblies together for testing, is not sufficiently complex and meaningful to result in a substantial transformation. Based on the information provided, we therefore conclude that the processing in Taiwan results in a product with a new name, character, and use, i.e., an LED device capable of forming and displaying images. Finally, as outlined above, after final assembly in China, each UPanelS unit will be separated into the module board, cabinet, and sometimes a wall controller unit for shipment to the United States. Here, we note that, although the devices will be disassembled for shipment, the components will nevertheless represent a single item of commerce if shipped together. See HQ H100055, dated May 28, 2010 (finding a medical patient lift imported unassembled to be a single unit for country of origin purposes when shipped together). Based on the analysis above, we find that the country of origin of the subject UPanelS devices is Taiwan and, therefore, the devices would be the product of a foreign country or instrumentality designated pursuant to 19 U.S.C. 2511(b)(1). HOLDING: Based on the facts and analysis set forth above, the country of origin of the instant UPanelS will be 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. 2024-13113 Filed: 6/13/2024 8:45 am; Publication Date: 6/14/2024]