81 FR 496 - Notice of Issuance of Final Determination Concerning Certain Multifunction Printer Products

DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection

Federal Register Volume 81, Issue 3 (January 6, 2016)

Page Range		496-498
FR Document		2015-33245
This document provides notice that U.S. Customs and Border Protection (``CBP'') has issued a final determination concerning the country of origin of certain multifunction printer products known as bizhub C3850FS multifunction digital printers (``bizhub MFP''). Based upon the facts presented, CBP has concluded that the country of origin of the bizhub MFP is Japan for purposes of U.S. Government procurement.
Federal Register, Volume 81 Issue 3 (Wednesday, January 6, 2016)
[Federal Register Volume 81, Number 3 (Wednesday, January 6, 2016)]
[Notices]
[Pages 496-498]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-33245]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Certain 
Multifunction Printer Products

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 certain multifunction printer products known as 
bizhub C3850FS multifunction digital printers (``bizhub MFP''). Based 
upon the facts presented, CBP has concluded that the country of origin 
of the bizhub MFP is Japan for purposes of U.S. Government procurement.

DATES: The final determination was issued on December 23, 2015. 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 February 5, 2016.

FOR FURTHER INFORMATION CONTACT: Antonio J. Rivera, Valuation and 
Special Programs Branch, Regulations and Rulings, Office of 
International Trade (202) 325-0226.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on December 23, 
2015, pursuant to subpart B of part 177, U.S. Customs and Border 
Protection Regulations (19 CFR part 177, subpart B), CBP issued a final 
determination concerning the country of origin certain multifunction 
printer products known as bizhub C3850FS multifunction digital 
printers, which may be offered to the U.S. Government under an 
undesignated government procurement contract. This final determination, 
HQ 263561, was issued 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 
concluded that the processing in Japan resulted in a substantial 
transformation. Therefore, the country of origin of the bizhub MFP is 
Japan for purposes of U.S. Government procurement.
    Section 177.29, CBP Regulations (19 CFR 177.29), provides that a 
notice of final determination 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: December 23, 2015.
Myles B. Harmon,
Acting Executive Director, Regulations and Rulings, Office of 
International Trade.
Attachment

HQ H263561

December 23, 2015

OT:RR:CTF:VS H263561 AJR

CATEGORY: Origin

Daniel E. Waltz, Esq., Squire Patton Boggs (US) LLP, 2550 M Street, 
NW., Washington, DC 20037

RE: U.S. Government Procurement; Country of Origin of Multifunction 
Printers; Substantial Transformation

    Dear Mr. Waltz: This is in response to your letter, dated March 
23, 2015, requesting a final determination on behalf of Konica 
Minolta (``K/M''), pursuant to subpart B of part 177 of the U.S. 
Customs and Border Protection (``CBP'') Regulations (19 CFR part 
177). Under these regulations, which implement Title III of the 
Trade Agreements Act of 1979 (``TAA''), 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.
    This final determination concerns the country of origin of K/M's 
bizhub C3850FS multifunction digital printers (``bizhub MFP(s)''). 
We note that K/M is a party-at-interest within the meaning of 19 CFR 
177.22(d)(1) and is entitled to request this final determination.

FACTS:

    K/M plans to sell its bizhub MFPs to the U.S. government. The 
bizhub MFPs are multifunction color machines that perform printing, 
copying, scanning, and faxing functions. According to K/M's counsel, 
the bizhub MFP was designed and developed in Japan, and its most 
important and complex components will be manufactured in Japan. The 
assembly process for the bizhub MFPs will start in Thailand and 
finish in Japan, assembling a total of 11 subassemblies into the 
final bizhub MFP product.

Assembly Processes in Thailand:

    In Thailand, the following four subassemblies (collectively, 
``Subassemblies 1-4'') will be assembled into their final form 
within the bizhub MFP's frame:
    1. The Print Head will be produced in Thailand from five sub-
components:
     a G1 lens manufactured in Japan;
     a G2 lens manufactured in Japan;
     a polygonal motor manufactured in China;
     a housing case manufactured in China; and,
     a laser diode manufactured in Taiwan.
    According to K/M's counsel, while the quantity at which the G1 
and G2 lenses are produced lowers their relative cost, the lenses 
are more complex than the other sub-components of the Print Head as 
noted by the higher skill and technology levels needed to produce 
them. The Print Head operates by reflecting a laser beam off of the 
lenses and onto the rotating polygonal mirrors in order to produce a 
copied image in the Latent Image Unit's photoconductor (``OPC''). 
The Print Head will be assembled into, and

[[Page 497]]

permanently integrated within, each bizhub MFP in Thailand.
    2. The Optical Lens will be manufactured in China from Chinese-
origin materials. It operates by accurately collecting the light 
reflected from external documents onto its lens. It will be 
assembled into, and permanently integrated within, each bizhub MFP 
in Thailand.
    3. The Charge Coupled Device (``CCD'') Board will be 
manufactured in China. It separates the colors collected by the 
Optical Lens, and converts them into independent colors. It will be 
assembled into, and permanently integrated within, each bizhub MFP 
in Thailand.
    4. The Mechanical Control Board will be manufactured in 
Thailand. It controls the bizhub MFP's input and output process 
through an engine that feeds the paper. It will be assembled into, 
and permanently integrated within, each bizhub MFP in Thailand.
    Additionally, six subassemblies (collectively, ``tested 
subassemblies'') will be assembled into the bizhub MFP for testing 
purposes, but then removed after testing, as follows:
    5. The Latent Image Unit will be produced in Thailand from three 
sub-components:
     OPC drums manufactured in Japan;
     a developer, with toner and carrier developing 
materials, manufactured in Japan; and,
     an electrostatic charging roller manufactured in Japan.
    The OPC drums receive the laser beam. Then, the developing 
materials and electrostatic charging roller sense the image being 
transmitted by the laser, regulate its thickness and precision, and 
transfer it to the Image Transfer Belt. The Latent Image Unit will 
be installed within a bizhub MFP for testing purposes, and then 
removed, while in Thailand.
    6. The Image Transfer Belt Unit will be manufactured in China 
from three sub-components:
     an image transfer belt manufactured in China;
     a 1st image transfer roller manufactured in China; and,
     a cleaning blade manufactured in China.
    It receives the single-color image from the Latent Image Unit 
and creates a multi-color image to transfer onto paper. The Image 
Transfer Belt Unit will be shipped to Thailand, where it will be 
installed within a bizhub MFP for testing purposes, and then 
removed.
    7. The 2nd Image Transfer Roller Unit will be manufactured in 
China. It supports the Image Transfer Belt Unit. The 2nd Image 
Transfer Roller Unit will be shipped to Thailand, where it will be 
installed within a bizhub MFP for testing purposes, and then 
removed.
    8. The Fusing Unit will be produced in Thailand from three sub-
components:
     a fusing belt manufactured in Japan;
     a fusing roller manufactured in China; and,
     a pressure sub-component manufactured in China.
    According to K/M's counsel, the fusing belt accounts for a 
significant percentage of the Fusing Unit's cost and is a key sub-
component. The Fusing Unit will be installed within a bizhub MFP for 
testing purposes, and then removed, while in Thailand.
    9. The Hard Disk Drive (``HDD'') will be manufactured in China 
or Thailand. It will be installed within a bizhub MFP for testing 
purposes, and then removed, while in Thailand.
    10. The Power Supply Unit will be manufactured in China. It will 
be shipped to Thailand, where it will be installed within a bizhub 
MFP for testing purposes, and then removed.

Assembly Process in Japan:

    Once the tested subassemblies are removed, the bizhub MFPs as 
assembled with Subassemblies 1-4 will be shipped to Japan without 
the tested subassemblies. Instead of shipping the tested 
subassemblies, six separate but identical subassemblies 
(collectively, ``Subassemblies 5-10,'' as described above) will be 
shipped to Japan for final assembly. In Japan, these integrated and 
unintegrated subassemblies will be assembled to completion with the 
following subassembly:
    11. The MFP Board will be manufactured from Japanese materials, 
and installed with Japanese-developed software, in Japan. According 
to K/M''s counsel, it constitutes the machine's ``brain'', 
integrating the printer and copier functions, and converting 
electric signals to digital signals, which are sent to the Print 
Head to create the image. It will be assembled into, and permanently 
integrated within, each bizhub MFP in Japan.
    The finished bizhub MFP will be tested, adjusted, and calibrated 
in Japan before shipment to the U.S. The testing conducted in Japan 
includes electronically adjusting the laser position and intensity 
of the laser diode's beam in the Print Head, and electronically and 
physically adjusting the Latent Image Unit to calibrate the unit's 
position and imaging accuracy. According to K/M's counsel, the 
testing conducted in Japan requires skilled workmanship, involving 
more complex and precise tests than the initial testing and 
adjustments conducted in Thailand.

ISSUE:

    What is the country of origin of the bizhub MFP for purposes of 
U.S. Government procurement?

LAW AND ANALYSIS:

    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 177.22(a).
    To determine 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. 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. CBP will make these decisions on a case-by-case basis, 
considering the totality of the circumstances. The country of origin 
of the article's components, the extent of the processing that 
occurs within a given country, and whether such processing renders a 
product with a new name, character, and use are primary 
considerations in such cases. Additionally, facts such as resources 
expended on product design and development, extent and nature of 
post-assembly inspection procedures, and worker skill required 
during the actual manufacturing process will be considered when 
analyzing whether a substantial transformation has occurred; 
however, no one such factor is determinative.
    In various cases concerning similar merchandise, CBP has held 
that complex and meaningful assembly operations involving a large 
number of components will generally result in a substantial 
transformation. In Headquarters Ruling Letter (``HQ'') 562936, dated 
March 17, 2004, CBP addressed the country of origin of certain MFPs 
assembled in Japan of various Japanese- and Chinese-origin parts. 
CBP determined that the MFP was a product of Japan based on the fact 
that a ``substantial portion of the printer's individual components 
and subassemblies [were] of Japanese origin.'' Furthermore, CBP 
noted that some of the Japanese components and subassemblies were 
essential parts of the finished article, and other Japanese parts, 
including the reader scanner unit and the control panel unit, were 
critical to the production of the printer. Finally, CBP noted that 
the Japanese processing operations were complex and meaningful, that 
required ``the assembly of a large number of components, and 
render[ed] a new and distinct article of commerce that possesse[d] a 
new name, character, and use.''
    In HQ H025106, dated June 11, 2008, CBP addressed the country of 
origin of certain photocopying machines, which had photocopying, 
printing, faxing, and scanning functions. The machines were 
comprised of a scanning unit, controller unit subassembly, laser 
scanning unit, photoconductor unit, developer unit, transfer unit, 
and fusing unit. Three of these components were assembled into the 
machine's frame in China, and the rest were assembled into the frame 
in Japan,

[[Page 498]]

where the machines were completed. CBP noted that though the 
developer unit and transfer unit were assembled in China, enough of 
the subassemblies and individual components (e.g. the transfer belt 
and photoconductor unit, among others) were from Japan, with the 
photoconductor being made of entirely Japanese parts. It also noted 
that though the developer unit would be assembled in China, two of 
the unit's key components were from Japan; and while the transfer 
unit would be partially assembled in China, the transfer belt was 
from Japan. CBP also noted that there were a large variety of 
adjustments that were made to the subassemblies in Japan, using 
advanced equipment and firmware. As a result, CBP held that the 
country of origin of the machines was Japan because the Japanese and 
foreign origin parts were substantially transformed into the 
machines through the product assembly that took place in Japan. See 
also HQ H020516, dated November 7, 2008 (holding that the country of 
origin of certain MFPs was Japan, using the same reasoning as HQ 
562936 and HQ H025106, and also noting that the MFPs were designed 
and developed in Japan).
    Based on the facts presented, we note that though the assembly 
of the bizhub MFP will take place in Japan and Thailand, there are 
also operations that contribute to this assembly which will take 
place in China. In situations like these, no one country imparts the 
dominant portion of the work conducted. Nonetheless, based upon the 
applicable legal standard, we determine that, the frame and 
subassemblies of the bizhub MFP that will be imported into Japan 
will be substantially transformed in Japan such that Japan will be 
the country of origin for purposes of U.S. Government procurement. 
In making this determination, we note that only four of the bizhub 
MFP's subassemblies (i.e. Subassemblies 1-4) will be assembled into 
the bizhub MFP's frame in Thailand, while the remaining seven 
subassemblies (i.e. Subassemblies 5-10, plus the MFP Board) will be 
assembled into, and permanently integrated within, the bizhub MFP in 
Japan. Further, we note that the MFP Board (the ``brain'' of the 
bizhub MFP) will be manufactured from all Japanese parts, will be 
integrated into the bizhub MFP in Japan, and accounts for a 
significant percentage of total subassemblies cost. Although many of 
the individual subassemblies will be assembled outside of Japan, we 
note sufficient use of Japanese sub-components in producing these 
subassemblies, such as the fusing belt that will be used to make the 
Fusing Unit, and the OPC drums, developer, and electrostatic roller 
that will be used to make the Latent Image Unit. As a result, the 
Japanese subassemblies and sub-components collectively attribute a 
significant percentage of the total subassemblies cost. Moreover, 
though we note the importance of the subassemblies and sub-
components from Thailand and China, these subassemblies and sub-
components will be integrated into a product that was designed and 
developed in Japan, and will be operated by Japanese-developed 
software that will also be installed onto the bizhub MFP in Japan. 
See HQ H198875, dated June 5, 2012 (noting that a foreign HDD that 
was integrated into an MFP in Singapore and installed with Japanese 
software in Singapore contributed to the reason that the HDD was 
substantially transformed into the MFP in Singapore). In this case, 
K/M incurred significant resources in Japan by developing and 
designing the MFP product, and its proprietary software, in Japan. 
Finally, the assembly operations that occur in Japan will be 
sufficiently complex and meaningful. Through the product assembly, 
as well as the testing and adjustment operations, the individual 
subassemblies and sub-components of Japanese and foreign-origin will 
be subsumed into a new and distinct article of commerce that has a 
new name, character, and use. Therefore, under the totality of the 
circumstances, we find that the country of origin of the bizhub MFP 
will be Japan for purposes of U.S. Government procurement.

HOLDING:

    Based on the facts provided, the country where the last 
substantial transformation will take places is Japan. As such, the 
bizhub MFPs will be considered products of Japan for purposes of 
U.S. Government procurement.
    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 Court of International Trade.

Sincerely,

Myles B. Harmon,

Acting Executive Director
Regulations and Rulings
Office of International Trade

[FR Doc. 2015-33245 Filed 1-5-16; 8:45 am]
 BILLING CODE P
496 Federal Register / Vol. 81, No. 3 / Wednesday, January 6, 2016 / Notices

emotional, and behavioral disorders violence, and neglect; and decreased are provided services through grant
among the children; improved parenting physical, emotional, and sexual abuse funds will inform the process to
skills, family functioning, economic for all family members. Women, their improve systems issues.
stability, and quality of life; decreased adolescents/children (up to age 17),
involvement in and exposure to crime, fathers, and other family members who

ANNUAL DATA COLLECTION BURDEN DATA COLLECTION BURDEN
Responses
Number of Total Hours per Total hour
Instrument/activity per
respondents responses response burden
respondent

Progress Report ................................................................... 25 4 100 8 800

Send comments to Summer King, pursuant to subpart B of part 177, U.S. Protection (‘‘CBP’’) Regulations (19 CFR part
SAMHSA Reports Clearance Officer, Customs and Border Protection 177). Under these regulations, which
Room 2–1057, One Choke Cherry Road, Regulations (19 CFR part 177, subpart implement Title III of the Trade Agreements
Rockville, MD 20857 or email her a B), CBP issued a final determination Act of 1979 (‘‘TAA’’), as amended (19 U.S.C.
2511 et seq.), CBP issues country of origin
copy at summer.king@samhsa.hhs.gov. concerning the country of origin certain
advisory rulings and final determinations as
Written comments should be received multifunction printer products known to whether an article is or would be a product
by March 7, 2016. as bizhub C3850FS multifunction digital of a designated country or instrumentality for
printers, which may be offered to the the purposes of granting waivers of certain
Summer King,
U.S. Government under an ‘‘Buy American’’ restrictions in U.S. law or
Statistician. undesignated government procurement practice for products offered for sale to the
[FR Doc. 2015–33221 Filed 1–5–16; 8:45 am] contract. This final determination, HQ U.S. Government.
BILLING CODE 4162–20–P 263561, was issued under procedures This final determination concerns the
set forth at 19 CFR part 177, subpart B, country of origin of K/M’s bizhub C3850FS
which implements title III of the Trade multifunction digital printers (‘‘bizhub
Agreements Act of 1979, as amended MFP(s)’’). We note that K/M is a party-at-
DEPARTMENT OF HOMELAND
interest within the meaning of 19 CFR
SECURITY (19 U.S.C. 2511–18). In the final 177.22(d)(1) and is entitled to request this
determination, CBP concluded that the final determination.
U.S. Customs and Border Protection processing in Japan resulted in a FACTS:
substantial transformation. Therefore,
Notice of Issuance of Final K/M plans to sell its bizhub MFPs to the
the country of origin of the bizhub MFP
Determination Concerning Certain U.S. government. The bizhub MFPs are
is Japan for purposes of U.S. multifunction color machines that perform
Multifunction Printer Products Government procurement. printing, copying, scanning, and faxing
AGENCY: U.S. Customs and Border Section 177.29, CBP Regulations (19 functions. According to K/M’s counsel, the
Protection, Department of Homeland CFR 177.29), provides that a notice of bizhub MFP was designed and developed in
Security. final determination shall be published Japan, and its most important and complex
in the Federal Register within 60 days components will be manufactured in Japan.
ACTION: Notice of final determination.
of the date the final determination is The assembly process for the bizhub MFPs
issued. Section 177.30, CBP Regulations will start in Thailand and finish in Japan,
SUMMARY: This document provides
(19 CFR 177.30), provides that any assembling a total of 11 subassemblies into
notice that U.S. Customs and Border the final bizhub MFP product.
Protection (‘‘CBP’’) has issued a final party-at-interest, as defined in 19 CFR
determination concerning the country of 177.22(d), may seek judicial review of a Assembly Processes in Thailand:
origin of certain multifunction printer final determination within 30 days of In Thailand, the following four
products known as bizhub C3850FS publication of such determination in the subassemblies (collectively, ‘‘Subassemblies
multifunction digital printers (‘‘bizhub Federal Register. 1–4’’) will be assembled into their final form
MFP’’). Based upon the facts presented, Dated: December 23, 2015. within the bizhub MFP’s frame:
CBP has concluded that the country of 1. The Print Head will be produced in
Myles B. Harmon,
Thailand from five sub-components:
origin of the bizhub MFP is Japan for Acting Executive Director, Regulations and • a G1 lens manufactured in Japan;
purposes of U.S. Government Rulings, Office of International Trade. • a G2 lens manufactured in Japan;
procurement. Attachment • a polygonal motor manufactured in
DATES: The final determination was HQ H263561 China;
issued on December 23, 2015. A copy of December 23, 2015 • a housing case manufactured in China;
the final determination is attached. Any OT:RR:CTF:VS H263561 AJR and,
• a laser diode manufactured in Taiwan.
party-at-interest, as defined in 19 CFR CATEGORY: Origin According to K/M’s counsel, while the
177.22(d), may seek judicial review of Daniel E. Waltz, Esq., Squire Patton Boggs quantity at which the G1 and G2 lenses are
this final determination within February (US) LLP, 2550 M Street, NW., Washington, produced lowers their relative cost, the
5, 2016. DC 20037 lenses are more complex than the other sub-
mstockstill on DSK4VPTVN1PROD with NOTICES

FOR FURTHER INFORMATION CONTACT: RE: U.S. Government Procurement; Country components of the Print Head as noted by the
Antonio J. Rivera, Valuation and Special of Origin of Multifunction Printers; higher skill and technology levels needed to
Programs Branch, Regulations and Substantial Transformation produce them. The Print Head operates by
Dear Mr. Waltz: This is in response to your reflecting a laser beam off of the lenses and
Rulings, Office of International Trade
letter, dated March 23, 2015, requesting a onto the rotating polygonal mirrors in order
(202) 325–0226. final determination on behalf of Konica to produce a copied image in the Latent
SUPPLEMENTARY INFORMATION: Notice is Minolta (‘‘K/M’’), pursuant to subpart B of Image Unit’s photoconductor (‘‘OPC’’). The
hereby given that on December 23, 2015, part 177 of the U.S. Customs and Border Print Head will be assembled into, and

VerDate Sep<11>2014 17:32 Jan 05, 2016 Jkt 238001 PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 E:\FR\FM\06JAN1.SGM 06JAN1
Federal Register / Vol. 81, No. 3 / Wednesday, January 6, 2016 / Notices 497

permanently integrated within, each bizhub Fusing Unit’s cost and is a key sub- of an article which consists in whole or in
MFP in Thailand. component. The Fusing Unit will be installed part of materials from another country or
2. The Optical Lens will be manufactured within a bizhub MFP for testing purposes, instrumentality, it has been substantially
in China from Chinese-origin materials. It and then removed, while in Thailand. transformed into a new and different article
operates by accurately collecting the light 9. The Hard Disk Drive (‘‘HDD’’) will be of commerce with a name, character, or use
reflected from external documents onto its manufactured in China or Thailand. It will be distinct from that of the article or articles
lens. It will be assembled into, and installed within a bizhub MFP for testing from which it was so transformed.
permanently integrated within, each bizhub purposes, and then removed, while in See also 19 CFR 177.22(a).
MFP in Thailand. Thailand. To determine whether the combining of
3. The Charge Coupled Device (‘‘CCD’’) 10. The Power Supply Unit will be parts or materials constitutes a substantial
Board will be manufactured in China. It manufactured in China. It will be shipped to transformation, the determinative issue is the
separates the colors collected by the Optical Thailand, where it will be installed within a extent of operations performed and whether
Lens, and converts them into independent bizhub MFP for testing purposes, and then the parts lose their identity and become an
colors. It will be assembled into, and removed. integral part of the new article. Belcrest
permanently integrated within, each bizhub Linens v. United States, 573 F. Supp. 1149
MFP in Thailand. Assembly Process in Japan: (Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368
4. The Mechanical Control Board will be Once the tested subassemblies are (Fed. Cir. 1984). Assembly operations that are
manufactured in Thailand. It controls the removed, the bizhub MFPs as assembled with minimal or simple, as opposed to complex or
bizhub MFP’s input and output process Subassemblies 1–4 will be shipped to Japan meaningful, will generally not result in a
through an engine that feeds the paper. It will without the tested subassemblies. Instead of substantial transformation. See C.S.D. 80–
be assembled into, and permanently shipping the tested subassemblies, six 111, C.S.D. 85–25, C.S.D. 89–110, C.S.D. 89–
integrated within, each bizhub MFP in separate but identical subassemblies 118, C.S.D. 90–51, and C.S.D. 90–97. CBP
Thailand. (collectively, ‘‘Subassemblies 5–10,’’ as will make these decisions on a case-by-case
Additionally, six subassemblies described above) will be shipped to Japan for basis, considering the totality of the
(collectively, ‘‘tested subassemblies’’) will be final assembly. In Japan, these integrated and circumstances. The country of origin of the
assembled into the bizhub MFP for testing unintegrated subassemblies will be article’s components, the extent of the
purposes, but then removed after testing, as assembled to completion with the following processing that occurs within a given
follows: subassembly: country, and whether such processing
5. The Latent Image Unit will be produced 11. The MFP Board will be manufactured renders a product with a new name,
in Thailand from three sub-components: from Japanese materials, and installed with character, and use are primary considerations
• OPC drums manufactured in Japan; Japanese-developed software, in Japan. in such cases. Additionally, facts such as
• a developer, with toner and carrier According to K/M’’s counsel, it constitutes resources expended on product design and
developing materials, manufactured in Japan; the machine’s ‘‘brain’’, integrating the printer development, extent and nature of post-
and, and copier functions, and converting electric assembly inspection procedures, and worker
• an electrostatic charging roller signals to digital signals, which are sent to skill required during the actual
manufactured in Japan. the Print Head to create the image. It will be manufacturing process will be considered
The OPC drums receive the laser beam. assembled into, and permanently integrated when analyzing whether a substantial
Then, the developing materials and within, each bizhub MFP in Japan. transformation has occurred; however, no
electrostatic charging roller sense the image The finished bizhub MFP will be tested, one such factor is determinative.
being transmitted by the laser, regulate its adjusted, and calibrated in Japan before In various cases concerning similar
thickness and precision, and transfer it to the shipment to the U.S. The testing conducted merchandise, CBP has held that complex and
Image Transfer Belt. The Latent Image Unit in Japan includes electronically adjusting the meaningful assembly operations involving a
will be installed within a bizhub MFP for laser position and intensity of the laser large number of components will generally
testing purposes, and then removed, while in diode’s beam in the Print Head, and result in a substantial transformation. In
Thailand. electronically and physically adjusting the Headquarters Ruling Letter (‘‘HQ’’) 562936,
6. The Image Transfer Belt Unit will be Latent Image Unit to calibrate the unit’s dated March 17, 2004, CBP addressed the
manufactured in China from three sub- position and imaging accuracy. According to country of origin of certain MFPs assembled
components: K/M’s counsel, the testing conducted in in Japan of various Japanese- and Chinese-
• an image transfer belt manufactured in Japan requires skilled workmanship, origin parts. CBP determined that the MFP
China; involving more complex and precise tests was a product of Japan based on the fact that
• a 1st image transfer roller manufactured than the initial testing and adjustments a ‘‘substantial portion of the printer’s
in China; and, conducted in Thailand. individual components and subassemblies
• a cleaning blade manufactured in China. ISSUE: [were] of Japanese origin.’’ Furthermore, CBP
It receives the single-color image from the noted that some of the Japanese components
Latent Image Unit and creates a multi-color What is the country of origin of the bizhub and subassemblies were essential parts of the
image to transfer onto paper. The Image MFP for purposes of U.S. Government finished article, and other Japanese parts,
Transfer Belt Unit will be shipped to procurement? including the reader scanner unit and the
Thailand, where it will be installed within a LAW AND ANALYSIS: control panel unit, were critical to the
bizhub MFP for testing purposes, and then Pursuant to Subpart B of Part 177, 19 CFR production of the printer. Finally, CBP noted
removed. 177.21 et seq., which implements Title III of that the Japanese processing operations were
7. The 2nd Image Transfer Roller Unit will the Trade Agreements Act of 1979, as complex and meaningful, that required ‘‘the
be manufactured in China. It supports the amended (19 U.S.C. 2511 et seq.), CBP issues assembly of a large number of components,
Image Transfer Belt Unit. The 2nd Image country of origin advisory rulings and final and render[ed] a new and distinct article of
Transfer Roller Unit will be shipped to determinations as to whether an article is or commerce that possesse[d] a new name,
Thailand, where it will be installed within a would be a product of a designated country character, and use.’’
bizhub MFP for testing purposes, and then or instrumentality for the purposes of In HQ H025106, dated June 11, 2008, CBP
removed. granting waivers of certain ‘‘Buy American’’ addressed the country of origin of certain
8. The Fusing Unit will be produced in restrictions in U.S. law or practice for photocopying machines, which had
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Thailand from three sub-components: products offered for sale to the U.S. photocopying, printing, faxing, and scanning
• a fusing belt manufactured in Japan; Government. functions. The machines were comprised of
• a fusing roller manufactured in China; Under the rule of origin set forth under 19 a scanning unit, controller unit subassembly,
and, U.S.C. 2518(4)(B): laser scanning unit, photoconductor unit,
• a pressure sub-component manufactured An article is a product of a country or developer unit, transfer unit, and fusing unit.
in China. instrumentality only if (i) it is wholly the Three of these components were assembled
According to K/M’s counsel, the fusing belt growth, product, or manufacture of that into the machine’s frame in China, and the
accounts for a significant percentage of the country or instrumentality, or (ii) in the case rest were assembled into the frame in Japan,

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498 Federal Register / Vol. 81, No. 3 / Wednesday, January 6, 2016 / Notices

where the machines were completed. CBP individual subassemblies will be assembled interest may, within 30 days of publication
noted that though the developer unit and outside of Japan, we note sufficient use of of the Federal Register Notice referenced
transfer unit were assembled in China, Japanese sub-components in producing these above, seek judicial review of this final
enough of the subassemblies and individual subassemblies, such as the fusing belt that determination before the Court of
components (e.g. the transfer belt and will be used to make the Fusing Unit, and the International Trade.
photoconductor unit, among others) were OPC drums, developer, and electrostatic
roller that will be used to make the Latent Sincerely,
from Japan, with the photoconductor being
made of entirely Japanese parts. It also noted Image Unit. As a result, the Japanese Myles B. Harmon,
that though the developer unit would be subassemblies and sub-components Acting Executive Director
assembled in China, two of the unit’s key collectively attribute a significant percentage Regulations and Rulings
components were from Japan; and while the of the total subassemblies cost. Moreover, Office of International Trade
transfer unit would be partially assembled in though we note the importance of the
[FR Doc. 2015–33245 Filed 1–5–16; 8:45 am]
China, the transfer belt was from Japan. CBP subassemblies and sub-components from
Thailand and China, these subassemblies and BILLING CODE P
also noted that there were a large variety of
adjustments that were made to the sub-components will be integrated into a
subassemblies in Japan, using advanced product that was designed and developed in
equipment and firmware. As a result, CBP Japan, and will be operated by Japanese- DEPARTMENT OF HOMELAND
held that the country of origin of the developed software that will also be installed SECURITY
machines was Japan because the Japanese onto the bizhub MFP in Japan. See HQ
and foreign origin parts were substantially H198875, dated June 5, 2012 (noting that a U.S. Customs and Border Protection
transformed into the machines through the foreign HDD that was integrated into an MFP
product assembly that took place in Japan. in Singapore and installed with Japanese Notice of Revocation of Customs
See also HQ H020516, dated November 7, software in Singapore contributed to the Brokers’ Licenses
2008 (holding that the country of origin of reason that the HDD was substantially
certain MFPs was Japan, using the same transformed into the MFP in Singapore). In AGENCY: U.S. Customs and Border
reasoning as HQ 562936 and HQ H025106, this case, K/M incurred significant resources Protection, Department of Homeland
and also noting that the MFPs were designed in Japan by developing and designing the Security.
and developed in Japan). MFP product, and its proprietary software, in
Based on the facts presented, we note that Japan. Finally, the assembly operations that ACTION: Revocation of customs brokers’
though the assembly of the bizhub MFP will occur in Japan will be sufficiently complex licenses.
take place in Japan and Thailand, there are and meaningful. Through the product
also operations that contribute to this assembly, as well as the testing and SUMMARY: This document provides
assembly which will take place in China. In adjustment operations, the individual notice of the revocation of customs
situations like these, no one country imparts subassemblies and sub-components of brokers’ licenses by operation of law.
the dominant portion of the work conducted. Japanese and foreign-origin will be subsumed
into a new and distinct article of commerce FOR FURTHER INFORMATION CONTACT: Julia
Nonetheless, based upon the applicable legal
standard, we determine that, the frame and that has a new name, character, and use. D. Peterson, Branch Chief, Broker
subassemblies of the bizhub MFP that will be Therefore, under the totality of the Management, Office of International
imported into Japan will be substantially circumstances, we find that the country of Trade, (202) 863–6601,
transformed in Japan such that Japan will be origin of the bizhub MFP will be Japan for julia.peterson@cbp.dhs.gov.
the country of origin for purposes of U.S. purposes of U.S. Government procurement.
Government procurement. In making this HOLDING: SUPPLEMENTARY INFORMATION: This
determination, we note that only four of the Based on the facts provided, the country
document provides notice that,
bizhub MFP’s subassemblies (i.e. where the last substantial transformation will pursuant to section 641 of the Tariff Act
Subassemblies 1–4) will be assembled into take places is Japan. As such, the bizhub of 1930, as amended, (19 U.S.C. 1641)
the bizhub MFP’s frame in Thailand, while MFPs will be considered products of Japan and section 111.30(d) of title 19 of the
the remaining seven subassemblies (i.e. for purposes of U.S. Government Code of Federal Regulations (19 CFR
Subassemblies 5–10, plus the MFP Board) procurement. 111.30(d)), the following customs
will be assembled into, and permanently Notice of this final determination will be brokers’ licenses were revoked by
integrated within, the bizhub MFP in Japan. given in the Federal Register, as required by operation of law, without prejudice, for
Further, we note that the MFP Board (the 19 CFR 177.29. Any party-at-interest other
‘‘brain’’ of the bizhub MFP) will be than the party which requested this final
failure to file a triennial status report. A
manufactured from all Japanese parts, will be determination may request, pursuant to 19 list of revoked customs brokers’ licenses
integrated into the bizhub MFP in Japan, and CFR 177.31, that CBP reexamine the matter appears, below, in alphabetical order by
accounts for a significant percentage of total anew and issue a new final determination. name, and the names are grouped
subassemblies cost. Although many of the Pursuant to 19 CFR 177.30, any party-at- according to the ports of issuance.

Last/Company name First name License Port of issuance

Harris ............................................................................................... Lisa ............................................. 17048 Anchorage.
Sherman .......................................................................................... Cynthia ....................................... 12763 Anchorage.
Canty ............................................................................................... Jeremain .................................... 21800 Atlanta.
Crist ................................................................................................. Diane .......................................... 23021 Atlanta.
Davis ................................................................................................ Lisa ............................................. 20146 Atlanta.
Dean ................................................................................................ Sandra ........................................ 23851 Atlanta.
Duru ................................................................................................. Chioma ....................................... 28256 Atlanta.
Godfrey ............................................................................................ Kimberly ..................................... 12089 Atlanta.
Hodgkins .......................................................................................... Kristen ........................................ 23043 Atlanta.
Johnson ........................................................................................... Stephen ...................................... 16226 Atlanta.
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Kelly ................................................................................................. Merrill Elizabeth ......................... 24351 Atlanta.
Leverett ............................................................................................ Wesley ....................................... 27943 Atlanta.
Nicholson ......................................................................................... Caroline ...................................... 24052 Atlanta.
Spencer Schulz ............................................................................... Elizabeth M ................................ 09658 Atlanta.
Wahl ................................................................................................. Mark ........................................... 28257 Atlanta.
Wang ............................................................................................... Yueh ........................................... 28079 Atlanta.
Willeby ............................................................................................. Natalie Renee ............................ 15042 Atlanta.
Williams ........................................................................................... Aria ............................................. 29979 Atlanta.
Williamson ....................................................................................... Heather ...................................... 16752 Atlanta.

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Document Created: 2016-01-06 04:02:13
Document Modified: 2016-01-06 04:02:13
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice of final determination.
Dates		The final determination was issued on December 23, 2015. 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 February 5, 2016.
Contact		Antonio J. Rivera, Valuation and Special Programs Branch, Regulations and Rulings, Office of International Trade (202) 325-0226.
FR Citation		81 FR 496
81 FR 496 - Notice of Issuance of Final Determination Concerning Certain Multifunction Printer Products

DEPARTMENT OF HOMELAND SECURITYU.S. Customs and Border Protection

Federal Register Volume 81, Issue 3 (January 6, 2016)

DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
