82_FR_13402 82 FR 13356 - Notice of Issuance of Final Determination Concerning Country of Origin of the KC-390 Military Cargo Airplane Converted to a Fire-Fighting Aircraft

82 FR 13356 - Notice of Issuance of Final Determination Concerning Country of Origin of the KC-390 Military Cargo Airplane Converted to a Fire-Fighting Aircraft

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

Federal Register Volume 82, Issue 46 (March 10, 2017)

Page Range13356-13358
FR Document2017-04741

This document provides notice that United States Customs and Border Protection (``CBP'') has issued a final determination concerning the country of origin of a military cargo airplane manufactured in Brazil, known as the KC-390, that will be converted into a fire- fighting aircraft in the United States. Based upon the facts presented, CBP has concluded in the final determination that for purposes of United States Government procurement the country of origin of the converted KC-390 aircraft will be Brazil, where it was originally manufactured.

Federal Register, Volume 82 Issue 46 (Friday, March 10, 2017)
[Federal Register Volume 82, Number 46 (Friday, March 10, 2017)]
[Notices]
[Pages 13356-13358]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-04741]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Country of 
Origin of the KC-390 Military Cargo Airplane Converted to a Fire-
Fighting Aircraft

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 United States Customs and 
Border Protection (``CBP'') has issued a final determination concerning 
the country of origin of a military cargo airplane manufactured in 
Brazil, known as the KC-390, that will be converted into a fire-
fighting aircraft in the United States. Based upon the facts presented, 
CBP has concluded in the final determination that for purposes of 
United States Government procurement the country of origin of the 
converted KC-390 aircraft will be Brazil, where it was originally 
manufactured.

DATES: The final determination was issued on March 06, 2017. 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 April 10, 2017.

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

SUPPLEMENTARY INFORMATION: Notice is hereby given that on March 06, 
2017, pursuant to subpart B of Part 177, Customs and Border Protection 
(CBP) Regulations (19 CFR part 177, subpart B), CBP issued a final 
determination concerning the country of origin of a converted military 
cargo airplane which may be offered to the United States Government 
under an undesignated government procurement contract. This final 
determination, HQ H280872, was issued at the request of Embraer 
Aircraft Holding, 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 
was presented with a scenario in which a military cargo plane, the KC-
390, manufactured in Brazil, will be converted into an aircraft that 
would be used for combating forest fires in the United States. CBP has 
determined for purposes of United States Government procurement that 
the country of origin of the KC-390 aircraft converted from a military 
cargo aircraft to a fire suppression aircraft in the United States will 
be Brazil, the country where the airplane was originally manufactured.
    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.

    Dated: March 06, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.

HQ H280872

March 06, 2017

OT:RR:CTF:VS H280872 RSD

CATEGORY: Country of Origin

Mr. Bruce L. Bunin
Director Business Development
Embraer Aircraft Holding, Inc.
Ft. Lauderdale, Florida 33315

RE: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. 2511); subpart B Part 177 CBP Regulations; 
Converting a Military Cargo Airplane to a Fire Fighting Aircraft

    Dear Mr. Bunin:
    This is in response to your letter dated October 24, 2016, 
requesting a final determination on behalf of Embraer Aircraft 
Holding, Inc., (Embraer) pursuant to subpart B of Part 177, Customs 
and Border Protection (``CBP'') Regulations (19 CFR 177.21 et. 
seq.). Under the pertinent regulations, which implement 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 purposes of granting 
waivers of certain ``Buy American'' restrictions in the U.S. law or 
practice for products offered for sale to the U.S. Government.
    This final determination concerns the country of origin of the 
Embraer KC-390 aircraft, which will be converted from a military 
cargo aircraft to an aircraft used for fire suppression. We note 
that Embraer is a party-at-interest within the meaning of 19 CFR 
177.22(d) and is entitled to request this final determination.

FACTS:

    Embraer is large Brazilian aerospace company that manufactures 
aircrafts. The merchandise at issue is an aircraft known as the 
Embraer KC-390. It is a medium-sized, twin-engine jet powered 
military transport aircraft developed by Embraer for the Brazilian 
Air Force that is able to perform aerial refueling and for 
transporting cargo and troops. It is the heaviest aircraft that 
Embraer had made to date. The aircraft was designed for a variety of 
military mobility missions, including heavy and outsized cargo 
transport and air drop, troop transport and parachute drop, air-to-
air refueling, search and rescue, and medical evacuation. It has a 
modern cockpit and an advance cargo handling system designed to 
enable fast and efficient military operations in normal or austere 
environments.
    Embraer intends to offer the KC-390 aircraft in response to a 
United States Forest Service (USFS) solicitation for air tankers 
that can be used in civil fire-fighting operations. Presently, the 
KC-390 is produced in Brazil. Embraer plans to modify the KC-390 
from a medium military cargo aircraft to a fire suppression aircraft 
to meet the requirements of the USFS solicitation. The work on the 
aircraft will occur in the United States at a Boeing facility in San 
Antonio, Texas. You state that the conversion of the KC-390 from a 
military transport aircraft to a civil fire-fighting aircraft will 
require modification of multiple systems and structures in order to 
meet the USFS requirements for aerial fire-fighting.
    The following systems in the aircraft need to be removed: the 
refueling systems, self-protection system, military mission 
equipment, antennas and systems, cargo handling systems (CHS), 
electronic controls, and the ballistic protection. In addition, the 
central panel assemblies of the Container Delivery System (CDS) 
rails and inboard panels will be removed in order to install a lower 
component retardant delivery system (RDS) under the cargo 
compartment floor. This change will also mandate a redesign, 
manufacture, and integration of a new roller solution on the mid-
board floor beams. The aircraft structures, cargo compartment floor, 
avionics systems, and electrical systems need to be modified. A 
series of other engineering activities associated with the removal 
of the cargo handling system and the installation of the fire-
fighting systems will be completed as well. Because the USFS does 
not require an electronically controlled locking system, that system 
will also be removed.
    Because the KC-390 military communications and navigation 
systems and sensors are not required for the USFS flight operations, 
they also will be removed. Removing those components includes the 
partial redesign and manufacture of the control and power harnesses, 
removal of Line Replaceable Units (LRUs), removal of structural 
supports for some of the LRUs and the removal of external fuselage 
surface fairings. KC-390 armor panels will also be removed from the 
flight deck and loadmaster station and from actuator bays.
    Several systems will be installed on the aircraft, such as: a 
new hydraulic actuator and fluid line, new bell doors, a new harness

[[Page 13357]]

for power, a new refueling port, a new retardant tank, new pumps, 
and new fuselage fairings. A major structural modification required 
for the KC-390 to accommodate the RDS system will be made to the 
center fuselage of the KC-390. The avionics system will incorporate 
some new functionalities that need to be developed and integrated 
into the current system such as: fire-fighting control panels to 
allow monitoring and control of RDS information and actuation, new 
synoptics for tank integration, and integration of Global 
Positioning System and moving map functionality to allow automatic 
tracking and disposal of retardant.
    It will also be necessary to develop and install new hydraulic 
systems for actuation of the retardant system doors, which comprises 
the integration of new actuators, a new hydraulic line and valves, 
and the relocation of the hydraulic lines passing under the floor 
due to the presence of the RDS lower component. The insertion of the 
RDS lower component under the floor will affect the current 
emergency actuation system of the main landing gear. The system will 
be re-routed under the floor, and cables and pulleys will be 
repositioned. In addition, a new internal tank will be added. The 
internal tank will require an external aircraft refueling port for 
retardant fluid, which means that there will be a design, 
manufacture, and installation of new fluid lines and valves.

ISSUE:

    What is the country of origin of the Embraer KC-390 aircraft 
after it has been converted from a military cargo aircraft to an 
aircraft that can be used by the USFS in combatting forest fires?

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).
    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 Acquisition 
Regulations. See 19 CFR 177.21. In this regard, CBP recognizes that 
the Federal Acquisition 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 25.403(c)(1). The 
Federal Acquisition Regulations define ``U.S.-made end product'' as 
``an article that is mined produced or manufactured in the United 
States or that is substantially transformed in the United States 
into a new and different article of commerce with name, character, 
or use distinct from that of the article or articles from which it 
was transformed.'' See 48 CFR 25.003.
    In order to determine whether a substantial transformation 
occurs when components of various origins are put together into 
completed products, CBP considers the totality of the circumstances 
and makes such determinations on a case-by-case basis. 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. A substantial transformation will not 
result from a minor manufacturing or combining process that leaves 
the identity of the article intact. See United States v. Gibson-
Thomsen Co., 27 C.C.P.A. 267 (1940). No one factor is determinative. 
In Uniroyal, Inc. v. United States, the Court of International Trade 
held that no substantial transformation occurred because the 
attachment of a footwear upper from Indonesia to its outsole in the 
United States was a minor manufacturing or combining process which 
left the identity of the upper intact. See Uniroyal, Inc. v. United 
States, 3 CIT 220, 224, 542 F. Supp. 1026, 1029 (1982), aff'd, 702 
F.2d 1022 (Fed. Cir. 1983). The court found that the upper was 
readily recognizable as a distinct item apart from the outsole to 
which it was attached, it did not lose its identity in the 
manufacture of the finished shoe in the United States, and the upper 
did not undergo a physical change or a change in use. Also, under 
Uniroyal, the change in name from ``upper'' to ``shoe'' was not 
significant. The court concluded that the upper was the essence of 
the completed shoe, and was not substantially transformed.
    CBP has considered changes to airplanes in prior decisions. In 
Headquarters Ruling Letter (HQ) 546092, dated September 16, 1992, a 
Yak 52 aircraft built in Romania was disassembled in Russia and 
certain vital components of the aircraft were replaced, in order to 
render the aircraft suitable for performing aerobatic acts. In 
particular, the aircraft was completely disassembled in order to 
replace the aircraft's spar with a new heavier spar, which is one of 
the main longitudinal supports of the wings of an aircraft. In 
addition, a new engine and propeller were fitted as part of the 
modification of the aircraft. The newly designed aircraft was 
capable of use with up to nine positive and seven negative 
gravitational forces. CBP noted that the purpose of the disassembly 
and reassembly of the Yak 52 aircraft in Russia was not to restore 
the aircraft to its original purpose. Rather, the work performed on 
the Yak 52 aircraft was to transform it from a trainer plane into a 
plane capable of aerobatic flight. In addition, the reassembly was 
very substantial involving, most notably, a completely new spar, 
engine, and propeller. Accordingly, CBP found that the manufacture 
in Russia resulted in a substantial transformation of the Yak 52 
aircraft.
    HQ H561322, dated May 11, 1999, involved the assembly of 
imported component parts of the fuselage plus the installation of 
other key components of an aircraft in the United States. CBP held 
that the imported fuselage was substantially transformed in the 
United States when it was reassembled and combined with significant 
other parts of the aircraft such as the engines, avionics and the 
landing gear to make the Hawker 800XP aircraft. CBP noted that when 
it was entered into the United States, the fuselage was unassembled, 
unpainted and did not have an interior. Even more significantly, the 
fuselage was basically an empty shell which lacked the essential 
components necessary to allow it to function as an aircraft. The 
most important of the other components that were involved in the 
making of the Hawker aircraft were the two engines. CBP found that 
the installation of these components was not a simple minor 
finishing operation, but a sophisticated procedure which required a 
high degree of technical skill. Accordingly, CBP held that the 
aircraft manufacturer substantially transformed the imported 
fuselage and the other imported component parts when it assembled 
them together to make the finished Hawker 800XP aircraft. Therefore, 
CBP held that the country of origin of the Hawker 800XP aircraft was 
the United States.
    In HQ H560245, dated April 4, 1997, certain satellite 
communications systems were installed in freight vans or trucks 
operated as motor carriers in the United States. The satellite 
communication system units consisted of three main components: a 
communications unit, an outdoor antenna unit, and a display unit. 
The system was an interactive communications tool that linked 
vehicles to a dispatch center so that messages and positioning 
information of the vehicle could be sent and received through a 
network management center. CBP found that the function of the vans 
and trucks remained the same before and after the installation of 
the communication systems, that is, for the transportation of 
articles. CBP also determined that the installation of the 
communication systems did not change the identity of the vans or 
trucks; it merely enabled the vans and trucks to be located while 
they were on the road. Therefore, CBP held that the vans and trucks 
could be entered under subheading 9802.00.50, HTSUS.
    In this case, we understand that the KC-390 will be overhauled 
when it is converted from a military cargo plane to an aircraft that 
has the capability of dispersing fire-fighting retardant. In the 
process of converting the KC-390, we recognize that some systems and 
components will have to be removed, while other new systems and 
components will be added. However, the work performed to the 
aircraft in this case is not as significant as the work performed to 
the aircraft in HQ 546092, where the aircraft's spar was replaced 
with a new and heavier spar, and a new engine and propeller were 
fitted as part of the modification of the aircraft. In addition, in 
HQ 546092, the aircraft was also equipped with two large annunciator 
panels to be used

[[Page 13358]]

in aerobatic instruction. In contrast, the information presented 
indicates that the most important systems of the KC-390 will remain 
intact even after the work is done to convert it to a fire 
suppression aircraft. The modification of the KC-390 aircraft 
largely consists of removing items from the aircraft that are 
associated with hauling military cargo and personnel and installing 
some new systems in order that the aircraft can carry and disperse 
fire retardant materials. Along these lines, while there will be 
some modifications, the basic structural integrity and the 
aerodynamics of the aircraft will not be changed. For example, the 
size and shape including its length and wing-span will not be 
changed. In addition, no information was presented showing that the 
engine powering the aircraft will be significantly reworked, meaning 
there will be no meaningful change to the aircraft's power, speed 
and range. Similarly, the electronics and instruments, which are 
involved in flying the airplane, will not be significantly changed.
    Although the KC-390 will be modified from a military cargo 
aircraft to an airplane that has fire suppression capability, we do 
not find that the fundamental identity of the product will be 
changed. After the work is completed to give the KC-390 its forest 
fire- fighting capability, the product will still remain an 
airplane. Unlike the imported components in H561322, when the 
aircraft in this case will be imported into the United States, it 
will already be a fully functioning airplane capable of flight, and 
ready for transporting personnel and equipment. While the type of 
materials carried on the aircraft and the method of delivery of 
those materials will be for a different purpose, we find that the 
changes made to the aircraft to convert it to a fire suppression 
airplane are not extensive enough to result in a substantial 
transformation of the aircraft. Therefore, we find that the country 
of origin of the KC-390 aircraft after it is converted from a 
military cargo aircraft to a fire suppression aircraft will be the 
country where the KC-390 aircraft was originally produced, Brazil.

HOLDING:

    Based upon the specific facts of this case, we find that the 
country of origin of the KC-390 aircraft converted from a military 
cargo aircraft to a fire suppression aircraft for purposes of U.S. 
Government procurement will remain Brazil, the country where it was 
originally manufactured.
    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,

Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.

[FR Doc. 2017-04741 Filed 3-9-17; 8:45 am]
 BILLING CODE P



                                                13356                           Federal Register / Vol. 82, No. 46 / Friday, March 10, 2017 / Notices

                                                  Dated: March 6, 2017.                                 determination, CBP was presented with                 FACTS:
                                                Natasha M. Copeland,                                    a scenario in which a military cargo                     Embraer is large Brazilian aerospace
                                                Program Analyst, Office of Federal Advisory             plane, the KC–390, manufactured in                    company that manufactures aircrafts. The
                                                Committee Policy.                                       Brazil, will be converted into an aircraft            merchandise at issue is an aircraft known as
                                                [FR Doc. 2017–04711 Filed 3–9–17; 8:45 am]              that would be used for combating forest               the Embraer KC–390. It is a medium-sized,
                                                                                                        fires in the United States. CBP has                   twin-engine jet powered military transport
                                                BILLING CODE 4140–01–P
                                                                                                                                                              aircraft developed by Embraer for the
                                                                                                        determined for purposes of United                     Brazilian Air Force that is able to perform
                                                                                                        States Government procurement that the                aerial refueling and for transporting cargo
                                                DEPARTMENT OF HOMELAND                                  country of origin of the KC–390 aircraft              and troops. It is the heaviest aircraft that
                                                SECURITY                                                converted from a military cargo aircraft              Embraer had made to date. The aircraft was
                                                                                                        to a fire suppression aircraft in the                 designed for a variety of military mobility
                                                U.S. Customs and Border Protection                      United States will be Brazil, the country             missions, including heavy and outsized cargo
                                                                                                        where the airplane was originally                     transport and air drop, troop transport and
                                                Notice of Issuance of Final                             manufactured.                                         parachute drop, air-to-air refueling, search
                                                Determination Concerning Country of                                                                           and rescue, and medical evacuation. It has a
                                                Origin of the KC–390 Military Cargo                        Section 177.29, CBP Regulations (19                modern cockpit and an advance cargo
                                                Airplane Converted to a Fire-Fighting                   CFR 177.29), provides that notice of                  handling system designed to enable fast and
                                                                                                        final determinations shall be published               efficient military operations in normal or
                                                Aircraft                                                                                                      austere environments.
                                                                                                        in the Federal Register within 60 days
                                                AGENCY:  U.S. Customs and Border                        of the date the final determination is                   Embraer intends to offer the KC–390
                                                Protection, Department of Homeland                                                                            aircraft in response to a United States Forest
                                                                                                        issued. Section 177.30, CBP Regulations               Service (USFS) solicitation for air tankers
                                                Security.                                               (19 CFR 177.30), provides that any                    that can be used in civil fire-fighting
                                                ACTION: Notice of final determination.                  party-at-interest, as defined in 19 CFR               operations. Presently, the KC–390 is
                                                                                                        177.22(d), may seek judicial review of a              produced in Brazil. Embraer plans to modify
                                                SUMMARY:    This document provides                      final determination within 30 days of                 the KC–390 from a medium military cargo
                                                notice that United States Customs and                   publication of such determination in the              aircraft to a fire suppression aircraft to meet
                                                Border Protection (‘‘CBP’’) has issued a                Federal Register.                                     the requirements of the USFS solicitation.
                                                final determination concerning the                                                                            The work on the aircraft will occur in the
                                                country of origin of a military cargo                     Dated: March 06, 2017.                              United States at a Boeing facility in San
                                                airplane manufactured in Brazil, known                  Alice A. Kipel,                                       Antonio, Texas. You state that the conversion
                                                as the KC–390, that will be converted                   Executive Director, Regulations and Rulings,          of the KC–390 from a military transport
                                                into a fire-fighting aircraft in the United             Office of Trade.                                      aircraft to a civil fire-fighting aircraft will
                                                                                                                                                              require modification of multiple systems and
                                                States. Based upon the facts presented,                 HQ H280872                                            structures in order to meet the USFS
                                                CBP has concluded in the final                                                                                requirements for aerial fire-fighting.
                                                                                                        March 06, 2017
                                                determination that for purposes of                                                                               The following systems in the aircraft need
                                                United States Government procurement                    OT:RR:CTF:VS H280872 RSD
                                                                                                                                                              to be removed: the refueling systems, self-
                                                the country of origin of the converted                  CATEGORY: Country of Origin                           protection system, military mission
                                                KC–390 aircraft will be Brazil, where it                Mr. Bruce L. Bunin                                    equipment, antennas and systems, cargo
                                                was originally manufactured.                            Director Business Development                         handling systems (CHS), electronic controls,
                                                                                                        Embraer Aircraft Holding, Inc.                        and the ballistic protection. In addition, the
                                                DATES: The final determination was
                                                                                                        Ft. Lauderdale, Florida 33315                         central panel assemblies of the Container
                                                issued on March 06, 2017. A copy of the                                                                       Delivery System (CDS) rails and inboard
                                                final determination is attached. Any                    RE: U.S. Government Procurement; Title III,
                                                                                                             Trade Agreements Act of 1979 (19 U.S.C.          panels will be removed in order to install a
                                                party-at-interest, as defined in 19 CFR                                                                       lower component retardant delivery system
                                                                                                             2511); subpart B Part 177 CBP
                                                177.22(d), may seek judicial review of                                                                        (RDS) under the cargo compartment floor.
                                                                                                             Regulations; Converting a Military Cargo
                                                this final determination within April 10,                    Airplane to a Fire Fighting Aircraft
                                                                                                                                                              This change will also mandate a redesign,
                                                2017.                                                                                                         manufacture, and integration of a new roller
                                                                                                           Dear Mr. Bunin:                                    solution on the mid-board floor beams. The
                                                FOR FURTHER INFORMATION CONTACT:                           This is in response to your letter dated           aircraft structures, cargo compartment floor,
                                                Robert Dinerstein, Valuation and                        October 24, 2016, requesting a final                  avionics systems, and electrical systems need
                                                Special Programs Branch, Regulations                    determination on behalf of Embraer Aircraft           to be modified. A series of other engineering
                                                and Rulings, Office of Trade (202–325–                  Holding, Inc., (Embraer) pursuant to subpart          activities associated with the removal of the
                                                0132).                                                  B of Part 177, Customs and Border Protection          cargo handling system and the installation of
                                                SUPPLEMENTARY INFORMATION: Notice is                    (‘‘CBP’’) Regulations (19 CFR 177.21 et. seq.).       the fire-fighting systems will be completed as
                                                hereby given that on March 06, 2017,                    Under the pertinent regulations, which                well. Because the USFS does not require an
                                                                                                        implement Title III of the Trade Agreements           electronically controlled locking system, that
                                                pursuant to subpart B of Part 177,                      Act of 1979 as amended (19 U.S.C. 2511 et             system will also be removed.
                                                Customs and Border Protection (CBP)                     seq.), CBP issues country of origin advisory             Because the KC–390 military
                                                Regulations (19 CFR part 177, subpart                   rulings and final determinations as to                communications and navigation systems and
                                                B), CBP issued a final determination                    whether an article is or would be a product           sensors are not required for the USFS flight
                                                concerning the country of origin of a                   of a designated country or instrumentality for        operations, they also will be removed.
                                                converted military cargo airplane which                 purposes of granting waivers of certain ‘‘Buy         Removing those components includes the
                                                may be offered to the United States                     American’’ restrictions in the U.S. law or            partial redesign and manufacture of the
                                                Government under an undesignated                        practice for products offered for sale to the         control and power harnesses, removal of Line
                                                government procurement contract. This                   U.S. Government.                                      Replaceable Units (LRUs), removal of
sradovich on DSK3GMQ082PROD with NOTICES




                                                final determination, HQ H280872, was                       This final determination concerns the              structural supports for some of the LRUs and
                                                                                                        country of origin of the Embraer KC–390               the removal of external fuselage surface
                                                issued at the request of Embraer Aircraft               aircraft, which will be converted from a              fairings. KC–390 armor panels will also be
                                                Holding, Inc. under procedures set forth                military cargo aircraft to an aircraft used for       removed from the flight deck and loadmaster
                                                at 19 CFR part 177, subpart B, which                    fire suppression. We note that Embraer is a           station and from actuator bays.
                                                implements Title III of the Trade                       party-at-interest within the meaning of 19               Several systems will be installed on the
                                                Agreements Act of 1979, as amended                      CFR 177.22(d) and is entitled to request this         aircraft, such as: a new hydraulic actuator
                                                (19 U.S.C. 2511–18). In the final                       final determination.                                  and fluid line, new bell doors, a new harness



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                                                                                Federal Register / Vol. 82, No. 46 / Friday, March 10, 2017 / Notices                                                 13357

                                                for power, a new refueling port, a new                  designated country end products for                   in Russia resulted in a substantial
                                                retardant tank, new pumps, and new fuselage             acquisitions subject to the TAA. See 48 CFR           transformation of the Yak 52 aircraft.
                                                fairings. A major structural modification               25.403(c)(1). The Federal Acquisition                    HQ H561322, dated May 11, 1999,
                                                required for the KC–390 to accommodate the              Regulations define ‘‘U.S.-made end product’’          involved the assembly of imported
                                                RDS system will be made to the center                   as ‘‘an article that is mined produced or             component parts of the fuselage plus the
                                                fuselage of the KC–390. The avionics system             manufactured in the United States or that is          installation of other key components of an
                                                will incorporate some new functionalities               substantially transformed in the United               aircraft in the United States. CBP held that
                                                that need to be developed and integrated into           States into a new and different article of            the imported fuselage was substantially
                                                the current system such as: fire-fighting               commerce with name, character, or use                 transformed in the United States when it was
                                                control panels to allow monitoring and                  distinct from that of the article or articles         reassembled and combined with significant
                                                control of RDS information and actuation,               from which it was transformed.’’ See 48 CFR           other parts of the aircraft such as the engines,
                                                new synoptics for tank integration, and                 25.003.                                               avionics and the landing gear to make the
                                                integration of Global Positioning System and               In order to determine whether a substantial        Hawker 800XP aircraft. CBP noted that when
                                                moving map functionality to allow automatic             transformation occurs when components of              it was entered into the United States, the
                                                tracking and disposal of retardant.                     various origins are put together into                 fuselage was unassembled, unpainted and
                                                   It will also be necessary to develop and             completed products, CBP considers the                 did not have an interior. Even more
                                                install new hydraulic systems for actuation of          totality of the circumstances and makes such          significantly, the fuselage was basically an
                                                the retardant system doors, which comprises             determinations on a case-by-case basis.               empty shell which lacked the essential
                                                the integration of new actuators, a new                 Substantial transformation occurs when an             components necessary to allow it to function
                                                hydraulic line and valves, and the relocation           article emerges from a process with a new             as an aircraft. The most important of the
                                                of the hydraulic lines passing under the floor          name, character or use different from that            other components that were involved in the
                                                due to the presence of the RDS lower                    possessed by the article prior to processing.         making of the Hawker aircraft were the two
                                                component. The insertion of the RDS lower               A substantial transformation will not result          engines. CBP found that the installation of
                                                component under the floor will affect the               from a minor manufacturing or combining               these components was not a simple minor
                                                current emergency actuation system of the               process that leaves the identity of the article       finishing operation, but a sophisticated
                                                main landing gear. The system will be re-               intact. See United States v. Gibson-Thomsen           procedure which required a high degree of
                                                routed under the floor, and cables and                  Co., 27 C.C.P.A. 267 (1940). No one factor is         technical skill. Accordingly, CBP held that
                                                pulleys will be repositioned. In addition, a            determinative. In Uniroyal, Inc. v. United            the aircraft manufacturer substantially
                                                new internal tank will be added. The internal           States, the Court of International Trade held         transformed the imported fuselage and the
                                                tank will require an external aircraft refueling        that no substantial transformation occurred           other imported component parts when it
                                                port for retardant fluid, which means that              because the attachment of a footwear upper            assembled them together to make the
                                                there will be a design, manufacture, and                from Indonesia to its outsole in the United           finished Hawker 800XP aircraft. Therefore,
                                                installation of new fluid lines and valves.             States was a minor manufacturing or                   CBP held that the country of origin of the
                                                                                                        combining process which left the identity of          Hawker 800XP aircraft was the United States.
                                                ISSUE:                                                  the upper intact. See Uniroyal, Inc. v. United           In HQ H560245, dated April 4, 1997,
                                                  What is the country of origin of the                  States, 3 CIT 220, 224, 542 F. Supp. 1026,            certain satellite communications systems
                                                Embraer KC–390 aircraft after it has been               1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir.          were installed in freight vans or trucks
                                                converted from a military cargo aircraft to an          1983). The court found that the upper was             operated as motor carriers in the United
                                                aircraft that can be used by the USFS in                readily recognizable as a distinct item apart         States. The satellite communication system
                                                combatting forest fires?                                from the outsole to which it was attached, it         units consisted of three main components: a
                                                                                                        did not lose its identity in the manufacture          communications unit, an outdoor antenna
                                                LAW AND ANALYSIS:                                       of the finished shoe in the United States, and        unit, and a display unit. The system was an
                                                   Pursuant to subpart B of Part 177, 19 CFR            the upper did not undergo a physical change           interactive communications tool that linked
                                                177.21 et seq., which implements Title III of           or a change in use. Also, under Uniroyal, the         vehicles to a dispatch center so that messages
                                                the Trade Agreements Act of 1979, as                    change in name from ‘‘upper’’ to ‘‘shoe’’ was         and positioning information of the vehicle
                                                amended (19 U.S.C. 2511 et seq.), CBP issues            not significant. The court concluded that the         could be sent and received through a network
                                                country of origin advisory rulings and final            upper was the essence of the completed shoe,          management center. CBP found that the
                                                determinations as to whether an article is or           and was not substantially transformed.                function of the vans and trucks remained the
                                                would be a product of a designated country                 CBP has considered changes to airplanes in         same before and after the installation of the
                                                or instrumentality for the purposes of                  prior decisions. In Headquarters Ruling               communication systems, that is, for the
                                                granting waivers of certain ‘‘Buy American’’            Letter (HQ) 546092, dated September 16,               transportation of articles. CBP also
                                                restrictions in U.S. law or practice for                1992, a Yak 52 aircraft built in Romania was          determined that the installation of the
                                                products offered for sale to the U.S.                   disassembled in Russia and certain vital              communication systems did not change the
                                                Government, under the rule of origin set forth          components of the aircraft were replaced, in          identity of the vans or trucks; it merely
                                                under 19 U.S.C. 2518(4)(B).                             order to render the aircraft suitable for             enabled the vans and trucks to be located
                                                   An article is a product of a country or              performing aerobatic acts. In particular, the         while they were on the road. Therefore, CBP
                                                instrumentality only if (i) it is wholly the            aircraft was completely disassembled in               held that the vans and trucks could be
                                                growth, product, or manufacture of that                 order to replace the aircraft’s spar with a new       entered under subheading 9802.00.50,
                                                country or instrumentality, or (ii) in the case         heavier spar, which is one of the main                HTSUS.
                                                of an article which consists in whole or in             longitudinal supports of the wings of an                 In this case, we understand that the KC–
                                                part of materials from another country or               aircraft. In addition, a new engine and               390 will be overhauled when it is converted
                                                instrumentality, it has been substantially              propeller were fitted as part of the                  from a military cargo plane to an aircraft that
                                                transformed into a new and different article            modification of the aircraft. The newly               has the capability of dispersing fire-fighting
                                                of commerce with a name, character, or use              designed aircraft was capable of use with up          retardant. In the process of converting the
                                                distinct from that of the article or articles           to nine positive and seven negative                   KC–390, we recognize that some systems and
                                                from which it was so transformed. See also,             gravitational forces. CBP noted that the              components will have to be removed, while
                                                19 CFR 177.22(a).                                       purpose of the disassembly and reassembly             other new systems and components will be
                                                   In rendering advisory rulings and final              of the Yak 52 aircraft in Russia was not to           added. However, the work performed to the
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                                                determinations for purposes of U.S.                     restore the aircraft to its original purpose.         aircraft in this case is not as significant as the
                                                Government procurement, CBP applies the                 Rather, the work performed on the Yak 52              work performed to the aircraft in HQ 546092,
                                                provisions of subpart B of part 177 consistent          aircraft was to transform it from a trainer           where the aircraft’s spar was replaced with
                                                with the Federal Acquisition Regulations.               plane into a plane capable of aerobatic flight.       a new and heavier spar, and a new engine
                                                See 19 CFR 177.21. In this regard, CBP                  In addition, the reassembly was very                  and propeller were fitted as part of the
                                                recognizes that the Federal Acquisition                 substantial involving, most notably, a                modification of the aircraft. In addition, in
                                                Regulations restrict the U.S. Government’s              completely new spar, engine, and propeller.           HQ 546092, the aircraft was also equipped
                                                purchase of products to U.S.-made or                    Accordingly, CBP found that the manufacture           with two large annunciator panels to be used



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                                                13358                           Federal Register / Vol. 82, No. 46 / Friday, March 10, 2017 / Notices

                                                in aerobatic instruction. In contrast, the              Executive Director, Regulations and Rulings,          questions regarding this notice. It is not
                                                information presented indicates that the most           Office of Trade.                                      for individual case status inquiries.
                                                important systems of the KC–390 will remain             [FR Doc. 2017–04741 Filed 3–9–17; 8:45 am]            Applicants seeking information about
                                                intact even after the work is done to convert           BILLING CODE P                                        the status of their individual cases can
                                                it to a fire suppression aircraft. The                                                                        check Case Status Online, available at
                                                modification of the KC–390 aircraft largely                                                                   the USCIS Web site at http://
                                                consists of removing items from the aircraft            DEPARTMENT OF HOMELAND                                www.uscis.gov, or call the USCIS
                                                that are associated with hauling military
                                                                                                        SECURITY                                              National Customer Service Center at
                                                cargo and personnel and installing some new
                                                systems in order that the aircraft can carry                                                                  (800) 375–5283; TTY (800) 767–1833.
                                                                                                        U.S. Citizenship and Immigration                      SUPPLEMENTARY INFORMATION: The
                                                and disperse fire retardant materials. Along
                                                                                                        Services                                              information collection notice was
                                                these lines, while there will be some
                                                modifications, the basic structural integrity           [OMB Control Number 1615–0025]                        previously published in the Federal
                                                and the aerodynamics of the aircraft will not                                                                 Register on December 21, 2016, at 81 FR
                                                be changed. For example, the size and shape             Agency Information Collection                         93695, allowing for a 60-day public
                                                including its length and wing-span will not             Activities; Extension, Without Change,                comment period. USCIS did receive two
                                                be changed. In addition, no information was             of a Currently Approved Collection:                   comments in connection with the 60-
                                                presented showing that the engine powering              Waiver of Rights, Privileges,                         day notice. This process is conducted in
                                                the aircraft will be significantly reworked,            Exemptions and Immunities                             accordance with 5 CFR 1320.10.
                                                meaning there will be no meaningful change
                                                to the aircraft’s power, speed and range.               AGENCY:  U.S. Citizenship and                         Comments
                                                Similarly, the electronics and instruments,             Immigration Services, Department of                     You may access the information
                                                which are involved in flying the airplane,              Homeland Security.
                                                will not be significantly changed.
                                                                                                                                                              collection instrument with instructions,
                                                                                                        ACTION: 30-Day notice.                                or additional information by visiting the
                                                   Although the KC–390 will be modified
                                                from a military cargo aircraft to an airplane                                                                 Federal eRulemaking Portal site at:
                                                                                                        SUMMARY:   The Department of Homeland                 http://www.regulations.gov and enter
                                                that has fire suppression capability, we do
                                                                                                        Security (DHS), U.S. Citizenship and                  USCIS–2008–0015 in the search box.
                                                not find that the fundamental identity of the
                                                product will be changed. After the work is
                                                                                                        Immigration Services (USCIS) will be                  Written comments and suggestions from
                                                completed to give the KC–390 its forest fire-           submitting the following information                  the public and affected agencies should
                                                fighting capability, the product will still             collection request to the Office of                   address one or more of the following
                                                remain an airplane. Unlike the imported                 Management and Budget (OMB) for                       four points:
                                                components in H561322, when the aircraft in             review and clearance in accordance                      (1) Evaluate whether the proposed
                                                this case will be imported into the United              with the Paperwork Reduction Act of                   collection of information is necessary
                                                States, it will already be a fully functioning          1995. The purpose of this notice is to                for the proper performance of the
                                                airplane capable of flight, and ready for               allow an additional 30 days for public                functions of the agency, including
                                                transporting personnel and equipment. While             comments.                                             whether the information will have
                                                the type of materials carried on the aircraft
                                                                                                        DATES: Comments are encouraged and                    practical utility;
                                                and the method of delivery of those materials
                                                                                                        will be accepted until April 10, 2017.                  (2) Evaluate the accuracy of the
                                                will be for a different purpose, we find that
                                                the changes made to the aircraft to convert             ADDRESSES: Written comments and/or                    agency’s estimate of the burden of the
                                                it to a fire suppression airplane are not               suggestions regarding the item(s)                     proposed collection of information,
                                                extensive enough to result in a substantial             contained in this notice, especially                  including the validity of the
                                                transformation of the aircraft. Therefore, we           regarding the estimated public burden                 methodology and assumptions used;
                                                find that the country of origin of the KC–390           and associated response time, must be                   (3) Enhance the quality, utility, and
                                                aircraft after it is converted from a military          directed to the OMB USCIS Desk Officer                clarity of the information to be
                                                cargo aircraft to a fire suppression aircraft           via email at oira_submission@                         collected; and
                                                will be the country where the KC–390 aircraft           omb.eop.gov. Comments may also be                       (4) Minimize the burden of the
                                                was originally produced, Brazil.                        submitted via fax at (202) 395–5806.                  collection of information on those who
                                                HOLDING:                                                (This is not a toll-free number.) All                 are to respond, including through the
                                                                                                        submissions received must include the                 use of appropriate automated,
                                                  Based upon the specific facts of this case,                                                                 electronic, mechanical, or other
                                                we find that the country of origin of the KC–           agency name and the OMB Control
                                                                                                        Number 1615–0025.                                     technological collection techniques or
                                                390 aircraft converted from a military cargo
                                                                                                           You may wish to consider limiting the              other forms of information technology,
                                                aircraft to a fire suppression aircraft for
                                                purposes of U.S. Government procurement                 amount of personal information that you               e.g., permitting electronic submission of
                                                will remain Brazil, the country where it was            provide in any voluntary submission                   responses.
                                                originally manufactured.                                you make. For additional information                  Overview of This Information
                                                  Notice of this final determination will be            please read the Privacy Act notice that               Collection
                                                given in the Federal Register, as required by           is available via the link in the footer of
                                                19 CFR 177.29. Any party-at–interest other                                                                      (1) Type of Information Collection
                                                                                                        http://www.regulations.gov.                           Request: Extension, Without Change, of
                                                than the party which requested this final
                                                determination may request, pursuant to 19               FOR FURTHER INFORMATION CONTACT:                      a Currently Approved Collection.
                                                CFR 177.31, that CBP reexamine the matter               USCIS, Office of Policy and Strategy,                   (2) Title of the Form/Collection:
                                                anew and issue a new final determination.               Regulatory Coordination Division,                     Waiver of Rights, Privileges, Exemptions
                                                                                                        Samantha Deshommes, Chief, 20
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                                                Pursuant to 19 CFR 177.30, any party-at-                                                                      and Immunities.
                                                interest may, within 30 days of publication             Massachusetts Avenue NW.,                               (3) Agency form number, if any, and
                                                of the Federal Register Notice referenced               Washington, DC 20529–2140,                            the applicable component of the DHS
                                                above, seek judicial review of this final               Telephone number (202) 272–8377                       sponsoring the collection: I–508, I–508F;
                                                determination before the Court of                       (This is not a toll-free number;                      USCIS.
                                                International Trade.                                    comments are not accepted via                           (4) Affected public who will be asked
                                                Sincerely,                                              telephone message.). Please note contact              or required to respond, as well as a brief
                                                Alice A. Kipel,                                         information provided here is solely for               abstract: Primary: Individuals or


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Document Created: 2018-02-01 14:52:38
Document Modified: 2018-02-01 14:52:38
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of final determination.
DatesThe final determination was issued on March 06, 2017. 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 April 10, 2017.
ContactRobert Dinerstein, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade (202- 325-0132).
FR Citation82 FR 13356 

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