82 FR 18923 - Notice of Issuance of Final Determination Concerning Certain Network Tap Products
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection Federal Register Volume 82, Issue 77 (April 24, 2017)
U.S. Customs and Border Protection
Federal Register Volume 82, Issue 77 (April 24, 2017)
| Page Range | 18923-18927 | |
| FR Document | 2017-08251 |
[Federal Register Volume 82, Number 77 (Monday, April 24, 2017)] [Notices] [Pages 18923-18927] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-08251] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF HOMELAND SECURITY U.S. Customs and Border Protection Notice of Issuance of Final Determination Concerning Certain Network Tap 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 network tap products known as Net Optics Slim Tap network taps. Based upon the facts presented, CBP has concluded that the country of origin of the Net Optics Slim Tap network taps is China for purposes of U.S. Government procurement. DATES: The final determination was issued on April 18, 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 May 24, 2017. FOR FURTHER INFORMATION CONTACT: Antonio J. Rivera, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade, at (202) 325-0226. SUPPLEMENTARY INFORMATION: Notice is hereby given that on April 18, 2017 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 [[Page 18924]] concerning the country of origin of certain network tap products known as Net Optics Slim Tap network taps, which may be offered to the U.S. Government under an undesignated government procurement contract. This final determination, HQ 280619, 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 last substantial transformation took place in China. Therefore, the country of origin of the Net Optics Slim Tap network taps is China 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: April 18, 2017. Alice A. Kipel, Executive Director, Regulations and Rulings, Office of Trade. Attachment HQ H280619 April 18, 2017 OT:RR:CTF:VS H280619 AJR CATEGORY: Origin Mr. Jackson C. Pai Bryan Cave LLP 120 Broadway, Suite 300 Santa Monica, CA 90401-2386 RE: U.S. Government Procurement; Country of Origin of Network Tap; Substantial Transformation Dear Mr. Pai: This is in response to your letter, dated October 13, 2016, requesting a final determination on behalf of Ixia, 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 Ixia's Net Optics Slim Tap network tap (``Slim Tap''). We note that Ixia is a party-at-interest within the meaning of 19 CFR 177.22(d)(1) and is entitled to request this final determination. In addition, we have reviewed and grant the request for confidentiality pursuant to 19 CFR 177.2(b)(7), with respect to certain information submitted. FACTS: The Slim Tap is a network tap produced by Ixia. A network tap is a fiber optic device that provides a physical connection or access to a network. Network taps enable users to physically connect a computer or other monitoring device to a network for the purpose of evaluating, monitoring, or checking network issues. The Slim Tap consists of three optic to LC-LC adapters from Taiwan, two fiber optic splitters from China, a chassis from the United States, a foam tube holder from the United States, a bracket from the United States, screws from the United States, and three tamper proof labels from the United States. The components from Taiwan and China are imported into the United States, separately in different shipments at different times. In the United States, these foreign and domestic components are assembled into the finished product, the Slim Tap, by specially trained technicians. During this assembly process, the technicians must install the adapters from Taiwan and splitters from China in a specific manner per the wiring diagram for the Slim Tap, or else the finished product will not work properly. After assembly, the Slim Tap is tested to determine if the signal or line drops fall within acceptable parameters and to assure that the unit is otherwise functioning properly. According to Ixia, this assembly and testing process in the United States takes approximately 15 minutes. In correspondence with the National Commodity Specialist Division (``NCSD''), Ixia provided the following information concerning the imported adapter and splitter components: Adapters--the adapters connect the outside fiber connection to the internal fiber connections inside the tap. The adapter merges these two fiber optic connectors into one connection, which allows the light to pass with very little disruption. Splitters--the main source of the optical splitters is glass from glass fibers that are fused together, and these fused glass fibers are held in a protective aluminum tube. The fiber optic splitter allows light frequency to pass through at very high speeds over long distances. The splitters are considered completely passive because there is no change to the data that is passed through the splitters within the Slim Tap.\1\ According to Ixia, ``[t]he main purpose of splitters is the passing of data from one product to another, but splitting it into two signals allows the customer to input data into data analyzing tools.'' --------------------------------------------------------------------------- \1\ There is no change to data passing through the splitters in the Slim Tap because the splitters lack electronic components required to convert data in the form of light frequency into electronic data in digital form. For instance, data is delivered into and out of the Slim Tap via the adapters that are connected to external fiber connections, which permits data in the form of light frequency to enter and exit the Slim Tap with very little disruption. Within the Slim Tap, the adapters are connected to the fiber optic splitters, permitting the light frequency to pass through and exit the Slim Tap in the same form that it entered. The data remains in this form, as an untouched wavelength of light, until it reaches an external transceiver from another device, which converts the data into electronic form. --------------------------------------------------------------------------- Ixia provided us with a product sample of the Slim Tap. We note that the three adapters on the front of the Slim Tap are labeled ``A'', ``B'', and ``A/B'', with the ``A'' and ``B'' adapters having both an ``in'' and ``out'' component, while ``A/B'' adapter only has two ``out'' components. The reason for there being two ``in'' components and four ``out'' components is because the splitters splits one incoming signal into two outgoing signals. ISSUE: What is the country of origin of the Slim Tap 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. [[Page 18925]] 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: [A]n 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 a name, character, or use distinct from that of the article or articles from which it was transformed. 48 CFR 25.003. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. See Nat'l Hand Tool Corp. v. United States, 16 CIT 308, aff'd, 989 F.2d 1201 (Fed. Cir. 1993); and Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int'l Trade 1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). The primary consideration in substantial transformation cases is whether the processing of the components renders a product with a new name, character, and use. See Energizer Battery, Inc. v. United States, 2016 CIT LEXIS 116, 12-15. In Energizer Battery, the court examined the name, character, and use test to determine that imported components did not undergo a substantial transformation when assembled into a flashlight in the United States. Id. With regard to a change in name, Energizer Battery stated that the ``issue is not whether Plaintiff imported approximately fifty `flashlights,' but rather whether the Plaintiff's imported components retained their names after they were assembled into the [. . .] flashlight. Thus, the proper query would be whether the `lens ring with overmold' or the `switch lever' or the `TIR lens' or any of the LEDs or any other component would still be called by their pre-importation name after assembly into the finished flashlight, or whether they would be indistinguishable in name from the finished product.'' See id. at 25. It was also noted that a change in name was the least compelling of the factors in the name, character, and use test. Id. The court in Energizer Battery found that there was no change in name because the constituent components of the flashlight had not lost their individual names as a result of the post-importation assembly. Id. With regard to a change in character, Energizer Battery stated that there often needs to be a substantial alteration in the characteristics of the imported components. See id. at 18-19. It was noted that courts have been reluctant to find a change in character when the imported articles did not undergo a physical change. Id. Additionally, the court indicated that analyzing this factor may require comparing the imported articles to the ``essence'' of the completed article. Id. In Energizer Battery, the assembly process in the United States required completing the lens head subassembly which had already been partially assembled in China, and then assembling the completed lens head assembly with the remaining flashlight components. Id. The court in Energizer Battery held that there was no change in character because these assembly operations in the United States were not considered to have changed the shape or material composition of the imported components. Id. With regard to a change in use, Energizer Battery stated that previous courts have found a change in use when the end-use of the imported product was no longer interchangeable with the end-use of the product after post-importation processing. See id. at 26. Furthermore, Energizer Battery noted that ``the proper query for this case is not whether the components as imported have the form and function of the final product, but whether the components have a pre-determined end-use at the time of importation.'' To this extent, ``[w]hen articles are imported in prefabricated form with a pre-determined use, the assembly of those articles into the final product, without more, may not rise to the level of substantial transformation.'' Id. Here, the court in Energizer Battery held that there was no change in use because all of the imported components had a pre-determined end-use as parts and components of the flashlight at the time of importation. Id. The court noted that even the imported wire had been pre-cut to particular lengths needed to assemble the flash light. Id. In this case, we are similarly examining whether imported components undergo a substantial transformation when assembled into the final product in the United States. Namely, while network taps and flashlights are different products, both this case and Energizer Battery ultimately require an analysis of the same underlying scenario--whether the post-importation assembly of foreign subassemblies, where such assembly consists of physically connecting the subassemblies through wiring and relatively simple insertions and fastening, render the foreign subassemblies into a product with a new name, character, and use. For the following reasons, we find that the imported splitters and adapters do not change in name, character, or use. As noted above, the Slim Tap consists of three adapters from Taiwan, two splitters from China, a foam tube holder from the United States, brackets and screws from the United States, and labels from the United States. Per the assembly diagram provided by Ixia, the foreign subassemblies are removed from their packaging, with the adapters being snapped into the chassis and the splitters being inserted into the foam tube holder that has already been attached to the chassis. After the adapters and splitters are placed into their proper positions within the chassis, the adapters and splitters are connected according to the precise instructions of the wiring diagram. Once the adapters and splitters are properly wired, the bracket, labels, and chassis cover are attached with screws to complete the assembly of the Slim Tap. In examining whether a change in name occurred, we note that the foreign adapters and splitters do not lose their individual names as a result of this post-importation assembly process. Per the assembly description and wiring diagram, the adapters and splitters would still be identified as the adapter and splitter components of the Slim Tap. To this extent, each imported component retains its pre-importation name after post-importation assembly in the same manner that the various lenses retained their pre-importation name after their assembly into the flashlight. Accordingly, we find that the imported adapters and splitters do not change in name as a result of the post-importation assembly. We also find that the assembly of the Slim Tap in the United States does not render a change in character to the adapters and splitters. Like in Energizer Battery, the imported adapters and splitters do not change in shape or material composition as a result of the post- importation assembly. See Ferrostaal Metals Corp. v. United States, 11 CIT 470, 477 (1987) (holding that a change in character occurred when a continuous hot-dip galvanizing process [[Page 18926]] transforms a strong, brittle product which cannot be formed into a durable, corrosion-resistant product which is less hard, but formable for a range of commercial applications); and Nat'l Hand Tool, 16 CIT at 311 (holding that a change in character did not occur when a heating process changed the microstructure of the materials, but did not change the chemical composition of the materials, and the form of the components remained the same). Here, through an examination of the wiring diagram and Slim Tap product sample, the imported adapters and splitters remain physically recognizable as such despite their further attachments resulting from the post-importation assembly. Moreover, the adapters and splitters are imported with a specific material composition that permits data in the form of light frequency to travel through these components without disruption. While the post-assembly importation physically connects the imported components with the other components of the Slim Tap, this process does not alter the material composition of the adapters and splitters. In examining whether a change in use occurred, we note that Ixia uses the imported adapters and splitters because such are comprised of precise materials that permit passing data through the Slim Tap in the manner required by the product. As in Energizer Battery, the imported materials are imported in a prefabricated form with a pre-determined end use as components of the Slim Tap. See Ferrostaal Metals, 11 CIT at 477 (holding that there was a change in use because the galvanizing process resulted in steel that was only rarely interchangeable with the imported steel); and Ran-Paige Co., Inc. v. United States, 35 Fed. Cl. 117, 121-122 (1996) (holding that there was no change in use because attaching handles to pans and covers did not change the use of the components, especially given the fact the use was predetermined at the time of importation). Here, the adapters and splitters are prefabricated with a specific material composition that serves the purpose of the Slim Tap. Though these imported components are attached to the other components of the Slim Tap, this post-importation assembly does not permanently alter the components in a manner that would prevent the components in the Slim Tap from being considered interchangeable with the imported components. Accordingly, we find that the imported adapters and splitters do not change in use as a result of the post-importation assembly. Therefore, through an analysis of the name, character, and use test, we find that the imported components do not undergo a substantial transformation when assembled into the Slim Tap in the United States. Nonetheless, Ixia makes two other arguments that the imported components are substantially transformed into the Slim Tap. First, Ixia argues that we should consider whether the Slim Tap would have originating status under the North American Free Trade Agreement (``NAFTA'') tariff shift rules when determining whether a substantial transformation occurred. However, as noted in Energizer Battery, the comparison to NAFTA ``is inapposite because NAFTA is a specialized trade regime, the benefits of which do not mirror the more generalized `most favored nation' treatment afforded to countries not party to the agreement in question.'' See id. at 32. Additionally, Ixia argues that the assembly of the Slim Tap results in a substantial transformation of the imported components because the assembly process in the United States requires skilled technicians to do a microscopic examination of the splitters, install the parts according to a complex wiring diagram, and engage through complex testing procedures. In support of this argument, Ixia cites Carlson Furniture Industries v. United States, 65 Cust. Ct 474 (1970) (holding imported unfinished chairs where substantially transformed into finished chairs by an assembly process that involved fitting and gluing the wooden parts together, cutting the parts to length, leveling the legs, and, in some cases, upholstering the chairs, and fitting the legs with glides and casters); and New York Ruling Letter (``NY'') N120765, dated September 24, 2010 (holding that a network security manager was substantially transformed by a process that involved assembling and wiring various imported hardware components together, as well as installing and configuring software onto the product). As noted by Ixia, examining whether a substantial transformed occurred may require the consideration of subsidiary factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and the degree of skill required during the actual manufacturing process. See Energizer Battery, 2016 CIT LEXIS at 20. Moreover, in cases in which post-importation processing entails assembly, the nature of the assembly has been considered together with the name, character, and use test in making a substantial transformation determination. See id; Belcrest Linens, 741 F.2d at 1371; and Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 1031, aff'd, 702 F.2d 1022 (Fed. Cir. 1983). However, 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. Here, we find that the assembly process is not sufficiently complex or meaningful to render a substantial transformation of the imported components. We distinguish the comparisons to the assembly processes in Carlson Furniture and NY N120765 because such involve additional procedures (e.g. cutting wooden parts to length, downloading software, etc.) that do not take place in the present case. Rather, in this case, the assembly primarily consists of inserting and fastening the imported components into the chassis, and wiring the imported components together. Including the testing process after assembly, the total process in the United States takes about 15 minutes. In Energizer Battery, the process of assembling and testing about 50 components (of which about 40 percent consisted of fasteners) into flashlights in the United States took between 7 and 13 minutes, and was not considered to rise above the level of a simple assembly. See id at 27-28. Similarly, we find that the process of assembling and testing fewer components into the Slim Tap does not constitute a complex assembly and testing process that would render a substantial transformation of the imported components. Accordingly, in this case, there are two foreign components, neither of which are substantially transformed by the further processing in the United States. As a result, the Slim Tap cannot be considered a product of the United States for purposes of U.S. Government procurement. However, since the adapters are from a designated country (Taiwan) and the splitters are from a non-designated country (China), and both are incorporated into one end-product (the Slim Tap), it still needs to be determined which of these two countries is the country of origin of the Slim Tap for purposes of U.S. Government procurement. As noted in Energizer Battery, within the name, character, and use test, determining the country of origin through a substantial transformation analysis may require comparing the ``essence'' of the imported articles to that of the completed article. Here, we [[Page 18927]] note that the ``essence'' of a network tap is to enable users to physically connect a computer or other monitoring device to a network for the purpose of evaluating, monitoring, or checking network issues. Moreover, with the Slim Tap, users of this network tap can use data incoming from a single source on multiple analyzing tools because the splitter from China splits incoming data into two signals. While both the adapters and splitters permit this connection between external devices and networks without disruption, both permitting the ingress and egress of data via the Slim Tap, the splitters from China enable the actual splitting of the signal, which permits the user to access the data on multiple analyzing tools. Therefore, we find that China is the country of origin of the Slim Tap for purposes of U.S. Government procurement. HOLDING: Based on the facts provided, the imported components will not be substantially transformed into the Slim Tap because the post- importation assembly process in the United States does not change the name, character and use of the imported adapters and splitters. As such, because the imported splitters constitute the ``essence'' of the Slim Tap, China will be considered the country of origin of the product 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, Alice A. Kipel, Executive Director Regulations and Rulings Office of Trade [FR Doc. 2017-08251 Filed 4-21-17; 8:45 am] BILLING CODE P
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in advance of the meeting. Determination Concerning Certain
The meeting will be closed to the Network Tap Products
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Pursuant to Public Law 92–463, determination concerning the country of
applications, the disclosure of which notice is hereby given that the
would constitute a clearly unwarranted origin of certain network tap products
Substance Abuse and Mental Health known as Net Optics Slim Tap network
invasion of personal privacy. Services Administration’s (SAMHSA’s) taps. Based upon the facts presented,
Name of Committee: National Heart, Lung, Center for Substance Abuse Treatment CBP has concluded that the country of
and Blood Advisory Council. (CSAT) National Advisory Council will origin of the Net Optics Slim Tap
Date: June 6, 2017. meet on May 8, 2017, 12:30 p.m.–1:00
Open: 8:00 a.m. to 12:00 p.m. network taps is China for purposes of
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applications. information concerning the applicants. 2017.
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Neuroscience Research Center, Building 35A the public as determined by the Antonio J. Rivera, Valuation and Special
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![18924 Federal Register / Vol. 82, No. 77 / Monday, April 24, 2017 / Notices
concerning the country of origin of Slim Tap network tap (‘‘Slim Tap’’). We passive because there is no change to
certain network tap products known as note that Ixia is a party-at-interest the data that is passed through the
Net Optics Slim Tap network taps, within the meaning of 19 CFR splitters within the Slim Tap.1
which may be offered to the U.S. 177.22(d)(1) and is entitled to request According to Ixia, ‘‘[t]he main purpose
Government under an undesignated this final determination. In addition, we of splitters is the passing of data from
government procurement contract. This have reviewed and grant the request for one product to another, but splitting it
final determination, HQ 280619, was confidentiality pursuant to 19 CFR into two signals allows the customer to
issued under procedures set forth at 19 177.2(b)(7), with respect to certain input data into data analyzing tools.’’
CFR Part 177, subpart B, which information submitted. Ixia provided us with a product
implements Title III of the Trade sample of the Slim Tap. We note that
FACTS:
Agreements Act of 1979, as amended the three adapters on the front of the
(19 U.S.C. 2511–18). In the final The Slim Tap is a network tap Slim Tap are labeled ‘‘A’’, ‘‘B’’, and ‘‘A/
determination, CBP concluded that the produced by Ixia. A network tap is a B’’, with the ‘‘A’’ and ‘‘B’’ adapters
last substantial transformation took fiber optic device that provides a having both an ‘‘in’’ and ‘‘out’’
place in China. Therefore, the country of physical connection or access to a component, while ‘‘A/B’’ adapter only
origin of the Net Optics Slim Tap network. Network taps enable users to has two ‘‘out’’ components. The reason
network taps is China for purposes of physically connect a computer or other for there being two ‘‘in’’ components
U.S. Government procurement. monitoring device to a network for the and four ‘‘out’’ components is because
Section 177.29, CBP Regulations (19 purpose of evaluating, monitoring, or the splitters splits one incoming signal
CFR 177.29), provides that a notice of checking network issues. into two outgoing signals.
final determination shall be published The Slim Tap consists of three optic
in the Federal Register within 60 days to LC–LC adapters from Taiwan, two ISSUE:
of the date the final determination is fiber optic splitters from China, a What is the country of origin of the
issued. Section 177.30, CBP Regulations chassis from the United States, a foam Slim Tap for purposes of U.S.
(19 CFR 177.30), provides that any tube holder from the United States, a Government procurement?
party-at-interest, as defined in 19 CFR bracket from the United States, screws
177.22(d), may seek judicial review of a from the United States, and three LAW AND ANALYSIS:
final determination within 30 days of tamper proof labels from the United Pursuant to subpart B of Part 177, 19
publication of such determination in the States. The components from Taiwan CFR 177.21 et seq., which implements
Federal Register. and China are imported into the United Title III of the Trade Agreements Act of
States, separately in different shipments 1979, as amended (19 U.S.C. 2511 et
Dated: April 18, 2017.
at different times. In the United States, seq.), CBP issues country of origin
Alice A. Kipel, these foreign and domestic components advisory rulings and final
Executive Director, Regulations and Rulings, are assembled into the finished product,
Office of Trade.
determinations as to whether an article
the Slim Tap, by specially trained is or would be a product of a designated
Attachment technicians. During this assembly country or instrumentality for the
HQ H280619 process, the technicians must install the purposes of granting waivers of certain
adapters from Taiwan and splitters from ‘‘Buy American’’ restrictions in U.S. law
April 18, 2017 China in a specific manner per the or practice for products offered for sale
OT:RR:CTF:VS H280619 AJR wiring diagram for the Slim Tap, or else to the U.S. Government.
CATEGORY: Origin the finished product will not work Under the rule of origin set forth
Mr. Jackson C. Pai properly. After assembly, the Slim Tap under 19 U.S.C. 2518(4)(B):
Bryan Cave LLP is tested to determine if the signal or An article is a product of a country or
120 Broadway, Suite 300 line drops fall within acceptable instrumentality only if (i) it is wholly
Santa Monica, CA 90401–2386 parameters and to assure that the unit is the growth, product, or manufacture of
RE: U.S. Government Procurement; otherwise functioning properly. that country or instrumentality, or (ii) in
Country of Origin of Network Tap; According to Ixia, this assembly and the case of an article which consists in
Substantial Transformation testing process in the United States whole or in part of materials from
Dear Mr. Pai: takes approximately 15 minutes. another country or instrumentality, it
This is in response to your letter, In correspondence with the National has been substantially transformed into
dated October 13, 2016, requesting a Commodity Specialist Division a new and different article of commerce
final determination on behalf of Ixia, (‘‘NCSD’’), Ixia provided the following with a name, character, or use distinct
pursuant to subpart B of Part 177 of the information concerning the imported from that of the article or articles from
U.S. Customs and Border Protection adapter and splitter components: which it was so transformed.
(‘‘CBP’’) Regulations (19 CFR Part 177). Adapters—the adapters connect the
Under these regulations, which outside fiber connection to the internal 1 There is no change to data passing through the
implement Title III of the Trade fiber connections inside the tap. The splitters in the Slim Tap because the splitters lack
Agreements Act of 1979 (‘‘TAA’’), as adapter merges these two fiber optic electronic components required to convert data in
the form of light frequency into electronic data in
amended (19 U.S.C. 2511 et seq.), CBP connectors into one connection, which digital form. For instance, data is delivered into and
issues country of origin advisory rulings allows the light to pass with very little out of the Slim Tap via the adapters that are
and final determinations as to whether disruption. connected to external fiber connections, which
Splitters—the main source of the permits data in the form of light frequency to enter
jstallworth on DSK7TPTVN1PROD with NOTICES
an article is or would be a product of a
and exit the Slim Tap with very little disruption.
designated country or instrumentality optical splitters is glass from glass fibers Within the Slim Tap, the adapters are connected to
for the purposes of granting waivers of that are fused together, and these fused the fiber optic splitters, permitting the light
certain ‘‘Buy American’’ restrictions in glass fibers are held in a protective frequency to pass through and exit the Slim Tap in
U.S. law or practice for products offered aluminum tube. The fiber optic splitter the same form that it entered. The data remains in
this form, as an untouched wavelength of light,
for sale to the U.S. Government. allows light frequency to pass through at until it reaches an external transceiver from another
This final determination concerns the very high speeds over long distances. device, which converts the data into electronic
country of origin of Ixia’s Net Optics The splitters are considered completely form.
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![Federal Register / Vol. 82, No. 77 / Monday, April 24, 2017 / Notices 18925
See also 19 CFR 177.22(a). also noted that a change in name was Namely, while network taps and
In rendering advisory rulings and the least compelling of the factors in the flashlights are different products, both
final determinations for purposes of name, character, and use test. Id. The this case and Energizer Battery
U.S. Government procurement, CBP court in Energizer Battery found that ultimately require an analysis of the
applies the provisions of subpart B of there was no change in name because same underlying scenario—whether the
part 177 consistent with the Federal the constituent components of the post-importation assembly of foreign
Acquisition Regulations. See 19 CFR flashlight had not lost their individual subassemblies, where such assembly
177.21. In this regard, CBP recognizes names as a result of the post- consists of physically connecting the
that the Federal Acquisition Regulations importation assembly. Id. subassemblies through wiring and
restrict the U.S. Government’s purchase With regard to a change in character, relatively simple insertions and
of products to U.S.-made or designated Energizer Battery stated that there often fastening, render the foreign
country end products for acquisitions needs to be a substantial alteration in subassemblies into a product with a
subject to the TAA. See 48 CFR the characteristics of the imported new name, character, and use. For the
25.403(c)(1). The Federal Acquisition components. See id. at 18–19. It was following reasons, we find that the
Regulations define ‘‘U.S.-made end noted that courts have been reluctant to imported splitters and adapters do not
product’’ as: find a change in character when the change in name, character, or use.
[A]n article that is mined, produced, or imported articles did not undergo a As noted above, the Slim Tap consists
manufactured in the United States or physical change. Id. Additionally, the of three adapters from Taiwan, two
that is substantially transformed in the court indicated that analyzing this factor splitters from China, a foam tube holder
United States into a new and different may require comparing the imported from the United States, brackets and
article of commerce with a name, articles to the ‘‘essence’’ of the screws from the United States, and
character, or use distinct from that of completed article. Id. In Energizer labels from the United States. Per the
the article or articles from which it was Battery, the assembly process in the assembly diagram provided by Ixia, the
transformed. United States required completing the foreign subassemblies are removed from
lens head subassembly which had their packaging, with the adapters being
48 CFR 25.003.
already been partially assembled in snapped into the chassis and the
In order to determine whether a China, and then assembling the splitters being inserted into the foam
substantial transformation occurs when completed lens head assembly with the tube holder that has already been
components of various origins are remaining flashlight components. Id. attached to the chassis. After the
assembled into completed products, The court in Energizer Battery held that adapters and splitters are placed into
CBP considers the totality of the there was no change in character their proper positions within the
circumstances and makes such because these assembly operations in chassis, the adapters and splitters are
determinations on a case-by-case basis. the United States were not considered to connected according to the precise
See Nat’l Hand Tool Corp. v. United have changed the shape or material instructions of the wiring diagram. Once
States, 16 CIT 308, aff’d, 989 F.2d 1201 composition of the imported the adapters and splitters are properly
(Fed. Cir. 1993); and Belcrest Linens v. components. Id. wired, the bracket, labels, and chassis
United States, 573 F. Supp. 1149 (Ct. With regard to a change in use, cover are attached with screws to
Int’l Trade 1983), aff’d, 741 F.2d 1368 Energizer Battery stated that previous complete the assembly of the Slim Tap.
(Fed. Cir. 1984). The primary courts have found a change in use when In examining whether a change in
consideration in substantial the end-use of the imported product was name occurred, we note that the foreign
transformation cases is whether the no longer interchangeable with the end- adapters and splitters do not lose their
processing of the components renders a use of the product after post-importation individual names as a result of this post-
product with a new name, character, processing. See id. at 26. Furthermore, importation assembly process. Per the
and use. See Energizer Battery, Inc. v. Energizer Battery noted that ‘‘the proper assembly description and wiring
United States, 2016 CIT LEXIS 116, 12– query for this case is not whether the diagram, the adapters and splitters
15. In Energizer Battery, the court components as imported have the form would still be identified as the adapter
examined the name, character, and use and function of the final product, but and splitter components of the Slim
test to determine that imported whether the components have a pre- Tap. To this extent, each imported
components did not undergo a determined end-use at the time of component retains its pre-importation
substantial transformation when importation.’’ To this extent, ‘‘[w]hen name after post-importation assembly in
assembled into a flashlight in the United articles are imported in prefabricated the same manner that the various lenses
States. Id. form with a pre-determined use, the retained their pre-importation name
With regard to a change in name, assembly of those articles into the final after their assembly into the flashlight.
Energizer Battery stated that the ‘‘issue product, without more, may not rise to Accordingly, we find that the imported
is not whether Plaintiff imported the level of substantial transformation.’’ adapters and splitters do not change in
approximately fifty ‘flashlights,’ but Id. Here, the court in Energizer Battery name as a result of the post-importation
rather whether the Plaintiff’s imported held that there was no change in use assembly.
components retained their names after because all of the imported components We also find that the assembly of the
they were assembled into the [. . .] had a pre-determined end-use as parts Slim Tap in the United States does not
flashlight. Thus, the proper query would and components of the flashlight at the render a change in character to the
be whether the ‘lens ring with time of importation. Id. The court noted adapters and splitters. Like in Energizer
overmold’ or the ‘switch lever’ or the Battery, the imported adapters and
jstallworth on DSK7TPTVN1PROD with NOTICES
that even the imported wire had been
‘TIR lens’ or any of the LEDs or any pre-cut to particular lengths needed to splitters do not change in shape or
other component would still be called assemble the flash light. Id. material composition as a result of the
by their pre-importation name after In this case, we are similarly post-importation assembly. See
assembly into the finished flashlight, or examining whether imported Ferrostaal Metals Corp. v. United States,
whether they would be components undergo a substantial 11 CIT 470, 477 (1987) (holding that a
indistinguishable in name from the transformation when assembled into the change in character occurred when a
finished product.’’ See id. at 25. It was final product in the United States. continuous hot-dip galvanizing process
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![Federal Register / Vol. 82, No. 77 / Monday, April 24, 2017 / Notices 18927
note that the ‘‘essence’’ of a network tap DEPARTMENT OF THE INTERIOR Litchfield County
is to enable users to physically connect Foster, Stephen and Helen, House, 417
a computer or other monitoring device National Park Service Sharon Goshen Tpk., Cornwall,
to a network for the purpose of [NPS–WASO–NRNHL–23198; SG100000955
evaluating, monitoring, or checking PPWOCRADI0, PCU00RP14.R50000] FLORIDA
network issues. Moreover, with the Slim
Tap, users of this network tap can use National Register of Historic Places; Highlands County
data incoming from a single source on Notification of Pending Nominations Santa Rosa Hotel, 209 N. Ridgewood,
multiple analyzing tools because the and Related Actions Sebring, SG100000957
splitter from China splits incoming data AGENCY: National Park Service, Interior. IDAHO
into two signals. While both the ACTION: Notice. Washington County
adapters and splitters permit this
connection between external devices SUMMARY: The National Park Service is Institute Canal Company Pump House, S. end
and networks without disruption, both soliciting comments on the significance of Fairview St. at the Galloway Canal,
of properties nominated before March Weiser, SG100000958
permitting the ingress and egress of data
via the Slim Tap, the splitters from 25, 2017, for listing or related actions in ILLINOIS
China enable the actual splitting of the the National Register of Historic Places.
Cook County
signal, which permits the user to access DATES: Comments should be submitted
by May 9, 2017. Lawson, Victor F., House YMCA, 30 W.
the data on multiple analyzing tools. Chicago Ave., Chicago, SG100000959
Therefore, we find that China is the ADDRESSES: Comments may be sent via
Flower, Lucy, Technical High School for
country of origin of the Slim Tap for U.S. Postal Service and all other carriers Girls, 3545 W. Fulton Blvd., Chicago,
purposes of U.S. Government to the National Register of Historic SG100000960
procurement. Places, National Park Service, 1849 C St. Mark Twain Hotel, (Residential Hotels in
NW., MS 7228, Washington, DC 20240. Chicago, 1880–1930 MPS), 111 W. Division
HOLDING: SUPPLEMENTARY INFORMATION: The St., Chicago, MP100000961
Based on the facts provided, the properties listed in this notice are being Johnson County
imported components will not be considered for listing or related actions
in the National Register of Historic Bridges, John, Tavern and Store Site,
substantially transformed into the Slim (Cherokee Trail of Tears MPS), Address
Places. Nominations for their
Tap because the post-importation Restricted, Buncombe vicinity,
consideration were received by the
assembly process in the United States MP100000962
National Park Service before March 25,
does not change the name, character and 2017. Pursuant to section 60.13 of 36 Ogle County
use of the imported adapters and CFR part 60, written comments are Watson, David and Julia, House, 103 N.
splitters. As such, because the imported being accepted concerning the Maple Ave., Polo, SG100000963
splitters constitute the ‘‘essence’’ of the significance of the nominated properties
Slim Tap, China will be considered the Sangamon County
under the National Register criteria for
country of origin of the product for evaluation. Compton, Dr. Charles, House, 1303 S.
purposes of U.S. Government Before including your address, phone Wiggins, Springfield, SG100000964
procurement. number, email address, or other Union County
Notice of this final determination will personal identifying information in your
Campground Church and Cemetery Site,
be given in the Federal Register, as comment, you should be aware that (Cherokee Trail of Tears MPS), 50 Tunnel
required by 19 CFR 177.29. Any party- your entire comment—including your Ln., Anna, MP100000965
at-interest other than the party which personal identifying information—may
be made publicly available at any time. IOWA
requested this final determination may
request, pursuant to 19 CFR 177.31, that While you can ask us in your comment Linn County
to withhold your personal identifying
CBP reexamine the matter anew and Cedar Rapids Milk Condensing Company,
information from public review, we (Commercial & Industrial Development of
issue a new final determination.
cannot guarantee that we will be able to Cedar Rapids MPS), 525 Valor Way SW.,
Pursuant to 19 CFR 177.30, any party- do so.
at-interest may, within 30 days of Cedar Rapids, MP100000966
Nominations submitted by State
publication of the Federal Register Historic Preservation Officers: Muscatine County
Notice referenced above, seek judicial Nicolaus, Henry E. and Ella M. (Knott),
review of this final determination before CALIFORNIA
House, 319 4th St., W., Wilton,
the Court of International Trade. Sacramento County SG100000968
Sincerely, Sutter Club, 1220 9th St., Sacramento, Tama County
SG100000951
Alice A. Kipel, Executive Director First United Brethren Church, 201 E. High
COLORADO St., Toledo, SG100000969
Regulations and Rulings
Washington County MASSACHUSETTS
Office of Trade Farmers State Bank of Cope, 45450
[FR Doc. 2017–08251 Filed 4–21–17; 8:45 am] Middlesex County
jstallworth on DSK7TPTVN1PROD with NOTICES
Washington Ave., Cope, SG100000952
BILLING CODE P Sandy Pond School, 150 Sandy Pond Rd.,
CONNECTICUT Ayer, SG100000971
Hartford County MICHIGAN
Bingham, Clarence A., School, 3 North St.,
Bristol, SG100000953 Oakland County
O’Connell, Clara T., School, 122 Park St., Paint Creek Cider Mill, 4480 Orion Rd.,
Bristol, SG100000954 Oakland Township, SG100000972
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Document Created: 2017-04-22 00:11:36
Document Modified: 2017-04-22 00:11:36
| 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 April 18, 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 May 24, 2017. | |
| Contact | Antonio J. Rivera, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade, at (202) 325-0226. | |
| FR Citation | 82 FR 18923 |
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