82_FR_23111 82 FR 23015 - Notice of Issuance of Final Determination Concerning a Certain Visitor Management System

82 FR 23015 - Notice of Issuance of Final Determination Concerning a Certain Visitor Management System

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

Federal Register Volume 82, Issue 96 (May 19, 2017)

Page Range23015-23018
FR Document2017-10057

This document provides notice that U.S. Customs and Border Protection (``CBP'') has issued a final determination concerning the country of origin of a certain visitor management system known as the Raptor Basic System. Based upon the facts presented for purposes of U.S. Government procurement, CBP has concluded that China is the country of origin of the identification scanner and printer components of the Raptor Basic System, that the United States is the country of origin of the label component of the Raptor Basic System, and that Taiwan is the country of origin of the barcode scanner that is compatible with the Raptor Basic System.

Federal Register, Volume 82 Issue 96 (Friday, May 19, 2017) 
[Federal Register Volume 82, Number 96 (Friday, May 19, 2017)]
[Notices]
[Pages 23015-23018]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-10057]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning a Certain 
Visitor Management System

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (``CBP'') has issued a final determination concerning the 
country of origin of a certain visitor management system known as the 
Raptor Basic System. Based upon the facts presented for purposes of 
U.S. Government procurement, CBP has concluded that China is the 
country of origin of the identification scanner and printer components 
of the Raptor Basic System, that the United States is the country of 
origin of the label component of the Raptor Basic System, and that 
Taiwan is the country of origin of the barcode scanner that is 
compatible with the Raptor Basic System.

DATES: The final determination was issued on May 08, 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 June 19, 2017.

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

SUPPLEMENTARY INFORMATION: Notice is hereby given that on May 08, 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 concerning the country of origin of a certain visitor 
management system known as the Raptor Basic System, which may be 
offered to the U.S. Government under an undesignated government 
procurement contract. This final determination, HQ H277116, 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 
identification scanner and printer components of the Raptor Basic 
System were not substantially transformed in the United States, and 
thus remain products of China. Additionally, CBP concluded that the 
label component of the Raptor Basic System was a product of the United 
States and that the barcode scanner that is compatible with the Raptor 
Basic System was a product of Taiwan. Therefore, for purposes of U.S. 
Government procurement, China is the country of origin of the 
identification scanner and printer components of the Raptor Basic 
System, the United States is the country of origin of the label 
component of the Raptor Basic System, and Taiwan is the country of 
origin of the barcode scanner that is compatible with the Raptor Basic 
System.
    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: May 08, 2017.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.

HQ H277116

May 08, 2017

OT:RR:CTF:VS H277116 AJR

Ms. Heather Mims
Centre Law and Consulting LLC
8330 Boone Boulevard, Suite 300

[[Page 23016]]

Tysons, VA 22182

RE: U.S. Government Procurement; Country of Origin of a Visitor 
Management System

Dear Ms. Mims:

    This is in response to your letter, dated June 15, 2016, requesting 
a final determination on behalf of Raptor Technologies, LLC 
(``Raptor''), pursuant to subpart B of Part 177 of the U.S. Customs and 
Border Protection (``CBP'') Regulations (19 C.F.R. Part 177). Under 
these regulations, which implement Title III of the Trade Agreements 
Act of 1979 (``TAA''), as amended (19 U.S.C. Sec.  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 the 
Raptor Basic System (``RBS''). We note that Raptor is a party-at-
interest within the meaning of 19 C.F.R. Sec.  177.22(d)(1) and is 
entitled to request this final determination.

FACTS:

    Raptor provides security and safety products to schools across the 
United States, and plans to sell its RBS product to the U.S. 
Government. The RBS is a visitor management system that is typically 
installed in elementary schools and used as a screening tool. The RBS 
is comprised of a scanner, a printer, the Raptor software, and labels. 
Installation of the RBS requires the use of a customer provided 
computer, where the software is installed. Once the RBS is installed 
and ready for use, users are able to scan the identification cards of 
individuals visiting the school in order to obtain personal/public 
information pertaining to the visitor. Based on the information 
received, the user prints out a color coded visitor tag which signifies 
the access or identity type of the visiting person.
    Specifically, the RBS consists of the Raptor software, one roll of 
Blanco labels, one Acuant Duplex ID scanner (``ID scanner''), and one 
Dymo printer. Along with the cost for these items, the software 
updates, database set-up, and shipping fee are integrated into the RBS 
price. Additional ID scanners, printers, and labels can be purchased 
for use with the RBS, along with barcode scanners that are also 
compatible with the system. According to Raptor, the RBS and its 
compatible products are produced for sale in the United States as 
follows:
    (1) Raptor Software: Raptor developed the software for the RBS in 
the United States. Additionally, Raptor's engineers write the source 
code for the software in the United States, and Raptor will install the 
software to customer specifications onto the RBS in the United States. 
The software is a critical component because it controls the entire 
system enabling it to manage, report, send, alert, and track all 
visitors entering public or private premises, along with notifying the 
Raptor technical support team about any potential issues. The software 
connects and communicates with the printers, scanners, and customer-
provided computers within the system. The software accounts for 30 
percent of the RBS price. Additionally, the software makes the RBS 
operational by automatically updating and permitting access to various 
databases, including the RBS database, which is also located in the 
United States. Raptor spends approximately two hours setting up the 
database, and training its customers how to use the system, which 
accounts for 21.86 percent of the RBS price. Together the cost of the 
software, database set-up, and training for the RBS system account for 
51.86 percent of the RBS price.
    (2) Blanco Labels: Blanco, Inc. develops and manufactures the 
labels in the United States, and the labels are printed with the Raptor 
logo in the United States. The RBS only uses these labels for the 
temporary badges and passes that it prints. The labels account for 6.25 
percent of the RBS price.
    (3) Acuant Duplex ID Scanner: The ID scanner consists of a hardware 
component made in China and a software component developed by Acuant 
(``Acuant software'') in the United States. The Acuant software is 
loaded onto the hardware component in the United States, and permits 
the ID scanner to communicate with the Raptor software. Raptor states 
that without the Raptor software, the ID scanner would not be an 
integral part of the RBS. The ID scanner accounts for 30.93 percent of 
the RBS price.
    (4) Dymo Printer: Dymo designs and engineers the printer in the 
United States and manufactures the printer in China. The printer 
communicates with the Raptor software, and Raptor states that without 
this software, the printer would not print the specific visitor badges 
or passes. The printer accounts for 8.68 percent of the RBS price.
    (5) Barcode Scanner: The barcode scanner is not required for the 
RBS, but is compatible with the system. Scan Technology Inc. 
manufactures the barcode scanner in Taiwan with parts that are also 
from Taiwan. The barcode scanners are also inspected and tested in 
Taiwan before they are shipped to the United States. While the barcode 
scanners are not part of the RBS, and will not be included within the 
RBS price, the purchase price for one barcode scanner comes to 
approximately 10 percent of the RBS price.
    The final assembly of the RBS occurs in the United States. 
According to Raptor, this process is complex and uses skilled 
technicians to complete it. This assembly takes approximately one hour 
per system and sometimes there are several systems installed in one 
school. The final testing of the RBS printers, scanners, and software 
also occurs in the United States. According to Raptor, it takes 
approximately one hour to test a system with a skilled technician, but 
some locations require testing multiple systems. Additionally, Raptor 
technicians train the users on how to use the system in the United 
States, and this training takes approximately one hour.

ISSUE:

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

LAW AND ANALYSIS:

    Pursuant to subpart B of Part 177, 19 C.F.R. Sec.  177.21 et seq., 
which implements Title III of the TAA, as amended (19 U.S.C. Sec.  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. Sec.  
2518(4)(B):

    An article is a product of a country or instrumentality only if (i) 
it is wholly the growth, product, or manufacture of that country or 
instrumentality, or (ii) in the case of an article which consists in 
whole or in part of materials from another country or instrumentality, 
it has been substantially transformed into a new and different article 
of commerce with a name, character, or use distinct from that of the 
article or articles from which it was so transformed.

See also 19 C.F.R. Sec.  177.22(a).
    In order to determine whether a substantial transformation occurs 
when the components of various origins are assembled to form completed 
articles, CBP considers the totality of the circumstances and makes 
decisions on a

[[Page 23017]]

case-by-case basis. The country of origin of the article's components, 
the extent of the processing that occurs within a given country, and 
whether such processing renders a product with a new name, character, 
and use are primary considerations in such cases. Here, the 
determination will be a ``mixed question of technology and customs law, 
mostly the latter.'' Texas Instruments v. United States, 681 F.2d 778, 
782 (CCPA 1982).
    In this case, Raptor acquires scanners and printers that were 
manufactured outside of the United States and installs onto them the 
Raptor software that was developed in the United States. The 
installation of the Raptor software takes place in the United States, 
and Raptor further customizes these devices with the software for each 
of its customers in the United States, as well as trains its customers 
on how to use the system. This package of hardware components, software 
components, and services are integrated together by Raptor as the RBS, 
which is the product being sold to the U.S. Government.
    Raptor believes that the country of origin of the RBS is the United 
States reasoning that the printers, scanners, labels, and software are 
substantially transformed into the RBS in the United States by 
installing critical software in the United States. Raptor also believes 
that the software, ID scanner, printer, and label components of the RBS 
are individually products of the United States, and that the RBS-
compatible Barcode scanner is a product of Taiwan.
    With regard to the Raptor software, Raptor argues that software is 
substantially transformed into a new article of commerce where the 
software build takes place, citing to HRL H268858, dated February 12, 
2016.\1\ However, while HRL H268858 took into account the development 
of the software as a factor in substantial transformation, it did not 
state that the intangible software itself was a product of a particular 
origin. Rather, it decided that the intangible software, partially 
developed in the United States, and tangible U.S.-origin blank discs, 
when combined by loading the software onto the discs, resulted in one 
product of the United States.
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    \1\ Raptor also cites to HRL H192146, dated June 8, 2012, which 
is a non-binding advisory ruling.
---------------------------------------------------------------------------

    Unlike HRL H268858, where CBP determined the country of origin of a 
tangible product, here we have no indication that the Raptor software 
by itself is a tangible product prior to its integration with the 
scanners and printers of the RBS. In rendering final determinations for 
purposes of U.S. Government procurement, CBP recognizes that the 
Federal Acquisition Regulation (``FAR'') restricts the U.S. 
Government's purchase of products to U.S.-made or designated country 
end products for acquisitions subject to the TAA, which excludes 
automatic data processing (``ADP'') telecommunications and transmission 
services, and related services. See 19 C.F.R. Sec.  177.21; and, 
subpart 25.4, FAR (48 C.F.R. Subpart 25.4). See also General Note 3(e), 
Harmonized Tariff Schedule of the United States (``HTSUS'') (stating 
that that telecommunication transmissions are not goods subject to the 
provisions of the tariff schedule, and as such would not require a 
country of origin marking). To the extent the Raptor software is an 
intangible product developed in the United States and transmitted via 
intangible signals, the Raptor software, by itself, is not subject to 
the country of origin determinations issued by CBP for purposes of U.S. 
Government procurement.
    However, the ID scanner and printer, which are tangible products 
imported into the United States are subject to the country of origin 
determination issued by CBP. In this regard, CBP may look at the 
process of loading U.S.-developed software onto these products in the 
United States when considering the extent of processing that occurs 
within the United States under the substantial transformation test. 
While Raptor argues that this process will transform the ID scanner and 
printer into products of the United States, we disagree as explained 
below.
    Here, both the development and loading of the software take place 
in the United States. However, the ID scanners and printers in this 
case serve as scanners and printers, even before software is loaded 
onto them in the United States. While the Acuant software gives the ID 
scanner the particular features of an Acuant branded scanner, and while 
the Raptor software gives the ID scanner and printer the ability to 
function within the RBS, this does not change the fact that these 
products have a predetermined use prior to having software installed 
onto them in the United States. See HRL H215657, dated April 29, 2013 
(holding that the process of developing and installing software onto 
foreign flashlights in the United States did not change the basic 
operations of the flashlight). Likewise, the process of customizing the 
RBS to work with multiple devices and multiple databases, or the 
process of training the customer how to use the system, will not 
transform the scanner into something other than a scanner or the 
printer into something other than a printer. See generally National 
Hand Tool Corp. v. United States, 16 Ct. Int'l Trade 308, 311 (1992) 
(holding that processing in the United States did not substantially 
transform tools already shaped for a predetermined use prior to 
importation into the United States).
    Raptor also cites to HRL H039856, dated August 12, 2009, to argue 
that the RBS is a product of the United States. In HRL H039856, various 
components of foreign origin, including a printer control unit and 
laser scanning unit, were imported into Japan and assembled into 
multifunction printers (``MFP(s)''). CBP has considered similar MFP 
cases on various occasions. In these cases, various components, 
including printer unit and scanner unit subassemblies, are physically 
integrated together to create an MFP capable of printing, scanning, and 
similar operations. Prior to this assembly, these subassemblies lack 
these capabilities. See HRL H263561, dated December 23, 2015; HRL 
H025106, dated June 11, 2008; and, HRL 562936, dated March 17, 2004. 
Unlike these MPF cases, the scanner and printer in this case do not 
require integration into the RBS to function as scanners and printers. 
Moreover, integrating the scanner and printer components into the RBS 
does not result in a printer and scanner that are physically assembled 
together. That is, after integration into the system, the scanner will 
look like the same scanner, and the printer like the same printer, both 
still without permanent physical attachments to other tangible 
products. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 
1026 (1982), aff'd 702 F. 2d 1022 (Fed. Cir. 1983) (noting that if the 
manufacturing or combining process is a minor one which leaves the 
identity of the article intact, a substantial transformation has not 
occurred).
    We also disagree with Raptor's argument that the various hardware 
component parts of the RBS cannot function as a visitor management 
system without the Raptor software, citing to HRL H090115, dated August 
2, 2010, and HRL H21555, dated July 13, 2012. The software installation 
process in HRL H090115 was only part of the 16 day process that 
rendered a substantial transformation, and thus is distinguished from 
this case which only involves a one to three hour process per system, 
mainly focusing on the software installation. Similarly we distinguish 
HRL H21555 because that case involved microcomputer devices which could 
not function without the proprietary software, whereas this case 
involves printers and scanners that are functional without the Raptor 
software.

[[Page 23018]]

    Additionally, we note that the ID scanner and printer are products 
that can be individually purchased and used outside of the system 
without the Raptor software. Thus, whether these products are 
substantially transformed into the RBS is really a question of whether 
the software development and loading are sufficient to transform these 
individual products into a different article of commerce, the RBS. As 
indicated above, regardless of the software installed onto the ID 
scanner and printer, the ID scanner and printer already have their 
respective functions as scanners and printers prior to their 
incorporation into the system. They function as scanners and printers 
when they are manufactured in China, their basic functions in this 
regard do not change once imported into the United States, and their 
physical appearance will remain the same even after integrated into the 
RBS. Accordingly, the ID scanner and printer remain products of China 
for purposes of U.S. Government procurement.
    With regard to the Blanco labels, Raptor indicates that such will 
be designed and manufactured in the United States. Similarly, Raptor 
indicates that the barcode scanner will be manufactured entirely in 
Taiwan. Raptor provides affidavits signed by the label manufacturer and 
barcode scanner manufacturer stating that such are products of the 
United States and Taiwan, respectively. To the extent that the labels 
and barcode scanner are products from the United States and Taiwan, 
respectively, each may be individually compliant under the TAA.
    While the labels are products that are integrated within the RBS, 
their country of origin does not change the country of origin of the ID 
scanner and printer within the RBS. In a number of rulings CBP stated, 
``merely packaging parts of a kit together does not constitute a 
substantial transformation.'' See HRL 732498, dated October 3, 1989; 
and HRL 732897, dated June 6, 1990. As noted from these rulings, 
packaging the ID scanner and printers with the labels does not 
substantially transform these products because such are already in 
their finished forms, not modified or affixed to each other, or 
combined in a permanent matter. Accordingly, the ID scanner and 
printers remain products of the country where they will be 
manufactured, China.

HOLDING:

    Based on the facts provided, the integration of the ID scanner, 
printer, and labels via the Raptor software into the RBS does not 
substantially transform these individual products into a product of the 
United States. Rather, for purposes of U.S. Government procurement, the 
labels are products of the United States, and the ID scanner and 
printer remain products of China because they are not substantially 
transformed by the processes that take place in the United States. 
Moreover, to the extent the RBS-compatible barcode scanner is 
manufactured in Taiwan, it is a product of Taiwan for purposes of U.S. 
Government procurement.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 C.F.R. Sec.  177.29. Any party-at-interest 
other than the party which requested this final determination may 
request, pursuant to 19 C.F.R. Sec.  177.31, that CBP reexamine the 
matter anew and issue a new final determination. Pursuant to 19 C.F.R. 
Sec.  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. 2017-10057 Filed 5-18-17; 8:45 am]
 BILLING CODE P

Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices 23015 monoclonal neutralizing antibodies for filed December 3, 2014; PCT FOR FURTHER INFORMATION CONTACT: treatment and prevention of Ebola Zaire Application No. PCT/US2015/060733, Robert Dinerstein, Valuation and disease. The monoclonal antibodies filed November 13, 2015 HHS Reference Special Programs Branch, Regulations (mAbs) bind to different regions of the No. E–278–2016- U.S. Provisional and Rulings, Office of Trade, at (202) Ebola glycoprotein that are unique for Application No.62,080,094, filed 325–0132. these two mAbs. Alone or in November 14, 2014; PCT Application SUPPLEMENTARY INFORMATION: Notice is combination, the mAbs prevent or No. PCT/IB2015/002342, filed hereby given that on May 08, 2017, reverse Ebola Zaire virus disease in non- November 13, 2015 pursuant to subpart B of Part 177, U.S. human primates. Nonclinical studies Licensing Contact: Dr. Dianca Finch, Customs and Border Protection have demonstrated complete protection 240–669–5503; dianca.finch@nih.gov. Regulations (19 CFR part 177, subpart against disease with a single antibody Collaborative Research Opportunity: B), CBP issued a final determination and complete protection against viremia The National Institute of Allergy and concerning the country of origin of a by addition of a second antibody. The Infectious Diseases is seeking statements certain visitor management system current nonclinical pharmacology of capability or interest from parties known as the Raptor Basic System, demonstrates a favorable interested in collaborative research to which may be offered to the U.S. pharmacokinetic profile and there is a further develop, evaluate or Government under an undesignated first-in-time human clinical trial commercialize products for treatment government procurement contract. This projected for 2017. The anticipated and prevention of Ebola Zaire disease. final determination, HQ H277116, was indications for this technology include For collaboration opportunities, please issued under procedures set forth at 19 pre-and post-symptomatic treatment, contact Dr. Dianca Finch, 240–669– CFR part 177, subpart B, which and pre-and post-exposure prophylaxis. 5503; dianca.finch@nih.gov. implements Title III of the Trade This technology is available for Dated: May 9, 2017. Agreements Act of 1979, as amended licensing for commercial development Suzanne Frisbie, (19 U.S.C. 2511–18). In the final in accordance with 35 U.S.C. 209 and 37 Deputy Director, Technology Transfer and determination, CBP concluded that the CFR part 404, as well as for further Intellectual Property Office, National Institute identification scanner and printer development and evaluation under a of Allergy and Infectious Diseases. components of the Raptor Basic System research collaboration. [FR Doc. 2017–10156 Filed 5–18–17; 8:45 am] were not substantially transformed in Potential Commercial Applications BILLING CODE 4140–01–P the United States, and thus remain products of China. Additionally, CBP • Therapeutics concluded that the label component of • Diagnostics DEPARTMENT OF HOMELAND the Raptor Basic System was a product Competitive Advantages SECURITY of the United States and that the barcode scanner that is compatible with • Favorable pharmacokinetic profile U.S. Customs and Border Protection the Raptor Basic System was a product • Favorable manufacturing of Taiwan. Therefore, for purposes of • Complete protection against disease Notice of Issuance of Final U.S. Government procurement, China is with a single unique mAb Determination Concerning a Certain the country of origin of the • Complete protection with fewer Visitor Management System identification scanner and printer administrations and/or lower doses than AGENCY: U.S. Customs and Border components of the Raptor Basic System, any other mAb Protection, Department of Homeland the United States is the country of origin • Complete protection against viremia Security. of the label component of the Raptor with two antibodies ACTION: Notice of final determination. Basic System, and Taiwan is the country Development Stage of origin of the barcode scanner that is • In vivo data available (animal) SUMMARY: This document provides compatible with the Raptor Basic • Entering first-in-time human notice that U.S. Customs and Border System. clinical trial (2017) Protection (‘‘CBP’’) has issued a final Section 177.29, CBP Regulations (19 Inventors: Nancy J. Sullivan (NIAID); determination concerning the country of CFR 177.29), provides that a notice of Barney S. Graham (NIAID); Julie origin of a certain visitor management final determination shall be published Ledgerwood (NIAID); Daphne A. system known as the Raptor Basic in the Federal Register within 60 days Stanley (NIAID); Antonio Lanzavecchia System. Based upon the facts presented of the date the final determination is (IRB) Davide Corti (IRB); John Trefry for purposes of U.S. Government issued. Section 177.30, CBP Regulations (USAMRIID/WR) procurement, CBP has concluded that (19 CFR 177.30), provides that any China is the country of origin of the party-at-interest, as defined in 19 CFR Publications identification scanner and printer 177.22(d), may seek judicial review of a Corti D, et al., Protective monotherapy components of the Raptor Basic System, final determination within 30 days of against lethal Ebola virus infection by that the United States is the country of publication of such determination in the a potently neutralizing antibody. origin of the label component of the Federal Register. Science. 2016 Mar 18;351:1339–42. Raptor Basic System, and that Taiwan is Dated: May 08, 2017. [PMID: 26917593] the country of origin of the barcode Alice A. Kipel, scanner that is compatible with the asabaliauskas on DSK3SPTVN1PROD with NOTICES Misasi J, et al., Structural and molecular Executive Director, Regulations and Rulings, basis for Ebola virus neutralization by Raptor Basic System. Office of Trade. protective human antibodies. Science. DATES: The final determination was issued on May 08, 2017. A copy of the HQ H277116 2016 Mar 18;3511343–6. [PMID: 26917592]. final determination is attached. Any May 08, 2017 party-at-interest, as defined in 19 CFR OT:RR:CTF:VS H277116 AJR Intellectual Property 177.22(d), may seek judicial review of Ms. Heather Mims HHS Reference No. E–045–2015—U.S. this final determination within June 19, Centre Law and Consulting LLC Provisional Application No. 62/087,087, 2017. 8330 Boone Boulevard, Suite 300 VerDate Sep<11>2014 19:15 May 18, 2017 Jkt 241001 PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 E:\FR\FM\19MYN1.SGM 19MYN1

23016 Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices Tysons, VA 22182 (1) Raptor Software: Raptor that are also from Taiwan. The barcode RE: U.S. Government Procurement; developed the software for the RBS in scanners are also inspected and tested Country of Origin of a Visitor the United States. Additionally, Raptor’s in Taiwan before they are shipped to the Management System engineers write the source code for the United States. While the barcode Dear Ms. Mims: software in the United States, and scanners are not part of the RBS, and Raptor will install the software to will not be included within the RBS This is in response to your letter, customer specifications onto the RBS in price, the purchase price for one dated June 15, 2016, requesting a final the United States. The software is a barcode scanner comes to determination on behalf of Raptor critical component because it controls approximately 10 percent of the RBS Technologies, LLC (‘‘Raptor’’), pursuant the entire system enabling it to manage, price. to subpart B of Part 177 of the U.S. report, send, alert, and track all visitors The final assembly of the RBS occurs Customs and Border Protection (‘‘CBP’’) entering public or private premises, in the United States. According to Regulations (19 C.F.R. Part 177). Under along with notifying the Raptor Raptor, this process is complex and uses these regulations, which implement technical support team about any skilled technicians to complete it. This Title III of the Trade Agreements Act of potential issues. The software connects assembly takes approximately one hour 1979 (‘‘TAA’’), as amended (19 U.S.C. and communicates with the printers, per system and sometimes there are § 2511 et seq.), CBP issues country of scanners, and customer-provided several systems installed in one school. origin advisory rulings and final computers within the system. The The final testing of the RBS printers, determinations as to whether an article software accounts for 30 percent of the scanners, and software also occurs in is or would be a product of a designated RBS price. Additionally, the software the United States. According to Raptor, country or instrumentality for the makes the RBS operational by it takes approximately one hour to test purposes of granting waivers of certain automatically updating and permitting a system with a skilled technician, but ‘‘Buy American’’ restrictions in U.S. law access to various databases, including some locations require testing multiple or practice for products offered for sale the RBS database, which is also located systems. Additionally, Raptor to the U.S. Government. in the United States. Raptor spends This final determination concerns the technicians train the users on how to approximately two hours setting up the use the system in the United States, and country of origin of the Raptor Basic database, and training its customers System (‘‘RBS’’). We note that Raptor is this training takes approximately one how to use the system, which accounts hour. a party-at-interest within the meaning of for 21.86 percent of the RBS price. 19 C.F.R. § 177.22(d)(1) and is entitled Together the cost of the software, ISSUE: to request this final determination. database set-up, and training for the What is the country of origin of the FACTS: RBS system account for 51.86 percent of RBS for purposes of U.S. Government the RBS price. procurement? Raptor provides security and safety (2) Blanco Labels: Blanco, Inc. products to schools across the United develops and manufactures the labels in LAW AND ANALYSIS: States, and plans to sell its RBS product the United States, and the labels are Pursuant to subpart B of Part 177, 19 to the U.S. Government. The RBS is a printed with the Raptor logo in the C.F.R. § 177.21 et seq., which visitor management system that is United States. The RBS only uses these implements Title III of the TAA, as typically installed in elementary schools labels for the temporary badges and amended (19 U.S.C. § 2511 et seq.), CBP and used as a screening tool. The RBS passes that it prints. The labels account issues country of origin advisory rulings is comprised of a scanner, a printer, the for 6.25 percent of the RBS price. and final determinations as to whether Raptor software, and labels. Installation (3) Acuant Duplex ID Scanner: The ID an article is or would be a product of a of the RBS requires the use of a scanner consists of a hardware designated country or instrumentality customer provided computer, where the component made in China and a for the purposes of granting waivers of software is installed. Once the RBS is software component developed by certain ‘‘Buy American’’ restrictions in installed and ready for use, users are Acuant (‘‘Acuant software’’) in the U.S. law or practice for products offered able to scan the identification cards of United States. The Acuant software is for sale to the U.S. Government. individuals visiting the school in order loaded onto the hardware component in Under the rule of origin set forth to obtain personal/public information the United States, and permits the ID under 19 U.S.C. § 2518(4)(B): pertaining to the visitor. Based on the scanner to communicate with the Raptor information received, the user prints out software. Raptor states that without the An article is a product of a country or a color coded visitor tag which signifies Raptor software, the ID scanner would instrumentality only if (i) it is wholly the access or identity type of the visiting not be an integral part of the RBS. The the growth, product, or manufacture of person. ID scanner accounts for 30.93 percent of that country or instrumentality, or (ii) in Specifically, the RBS consists of the the RBS price. the case of an article which consists in Raptor software, one roll of Blanco (4) Dymo Printer: Dymo designs and whole or in part of materials from labels, one Acuant Duplex ID scanner engineers the printer in the United another country or instrumentality, it (‘‘ID scanner’’), and one Dymo printer. States and manufactures the printer in has been substantially transformed into Along with the cost for these items, the China. The printer communicates with a new and different article of commerce software updates, database set-up, and the Raptor software, and Raptor states with a name, character, or use distinct shipping fee are integrated into the RBS that without this software, the printer from that of the article or articles from asabaliauskas on DSK3SPTVN1PROD with NOTICES price. Additional ID scanners, printers, would not print the specific visitor which it was so transformed. and labels can be purchased for use badges or passes. The printer accounts See also 19 C.F.R. § 177.22(a). with the RBS, along with barcode for 8.68 percent of the RBS price. In order to determine whether a scanners that are also compatible with (5) Barcode Scanner: The barcode substantial transformation occurs when the system. According to Raptor, the scanner is not required for the RBS, but the components of various origins are RBS and its compatible products are is compatible with the system. Scan assembled to form completed articles, produced for sale in the United States Technology Inc. manufactures the CBP considers the totality of the as follows: barcode scanner in Taiwan with parts circumstances and makes decisions on a VerDate Sep<11>2014 19:15 May 18, 2017 Jkt 241001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\19MYN1.SGM 19MYN1

Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices 23017 case-by-case basis. The country of origin recognizes that the Federal Acquisition printer. See generally National Hand of the article’s components, the extent of Regulation (‘‘FAR’’) restricts the U.S. Tool Corp. v. United States, 16 Ct. Int’l the processing that occurs within a Government’s purchase of products to Trade 308, 311 (1992) (holding that given country, and whether such U.S.-made or designated country end processing in the United States did not processing renders a product with a new products for acquisitions subject to the substantially transform tools already name, character, and use are primary TAA, which excludes automatic data shaped for a predetermined use prior to considerations in such cases. Here, the processing (‘‘ADP’’) telecommunications importation into the United States). determination will be a ‘‘mixed question and transmission services, and related Raptor also cites to HRL H039856, of technology and customs law, mostly services. See 19 C.F.R. § 177.21; and, dated August 12, 2009, to argue that the the latter.’’ Texas Instruments v. United subpart 25.4, FAR (48 C.F.R. Subpart RBS is a product of the United States. States, 681 F.2d 778, 782 (CCPA 1982). 25.4). See also General Note 3(e), In HRL H039856, various components of In this case, Raptor acquires scanners Harmonized Tariff Schedule of the foreign origin, including a printer and printers that were manufactured United States (‘‘HTSUS’’) (stating that control unit and laser scanning unit, outside of the United States and installs that telecommunication transmissions were imported into Japan and onto them the Raptor software that was are not goods subject to the provisions assembled into multifunction printers developed in the United States. The of the tariff schedule, and as such would (‘‘MFP(s)’’). CBP has considered similar installation of the Raptor software takes not require a country of origin marking). MFP cases on various occasions. In place in the United States, and Raptor To the extent the Raptor software is an these cases, various components, further customizes these devices with intangible product developed in the including printer unit and scanner unit the software for each of its customers in United States and transmitted via subassemblies, are physically integrated the United States, as well as trains its intangible signals, the Raptor software, together to create an MFP capable of customers on how to use the system. by itself, is not subject to the country of printing, scanning, and similar This package of hardware components, origin determinations issued by CBP for operations. Prior to this assembly, these software components, and services are purposes of U.S. Government subassemblies lack these capabilities. integrated together by Raptor as the procurement. See HRL H263561, dated December 23, RBS, which is the product being sold to However, the ID scanner and printer, 2015; HRL H025106, dated June 11, the U.S. Government. which are tangible products imported 2008; and, HRL 562936, dated March Raptor believes that the country of into the United States are subject to the 17, 2004. Unlike these MPF cases, the origin of the RBS is the United States country of origin determination issued scanner and printer in this case do not reasoning that the printers, scanners, by CBP. In this regard, CBP may look at require integration into the RBS to labels, and software are substantially the process of loading U.S.-developed function as scanners and printers. transformed into the RBS in the United software onto these products in the Moreover, integrating the scanner and States by installing critical software in United States when considering the printer components into the RBS does the United States. Raptor also believes extent of processing that occurs within not result in a printer and scanner that that the software, ID scanner, printer, the United States under the substantial are physically assembled together. That and label components of the RBS are transformation test. While Raptor argues is, after integration into the system, the individually products of the United that this process will transform the ID scanner will look like the same scanner, States, and that the RBS-compatible scanner and printer into products of the and the printer like the same printer, Barcode scanner is a product of Taiwan. United States, we disagree as explained both still without permanent physical With regard to the Raptor software, below. attachments to other tangible products. Raptor argues that software is Here, both the development and See Uniroyal, Inc. v. United States, 3 substantially transformed into a new loading of the software take place in the CIT 220, 542 F. Supp. 1026 (1982), aff’d article of commerce where the software United States. However, the ID scanners 702 F. 2d 1022 (Fed. Cir. 1983) (noting build takes place, citing to HRL and printers in this case serve as that if the manufacturing or combining H268858, dated February 12, 2016.1 scanners and printers, even before process is a minor one which leaves the However, while HRL H268858 took into software is loaded onto them in the identity of the article intact, a account the development of the software United States. While the Acuant substantial transformation has not as a factor in substantial transformation, software gives the ID scanner the occurred). it did not state that the intangible particular features of an Acuant branded We also disagree with Raptor’s software itself was a product of a scanner, and while the Raptor software argument that the various hardware particular origin. Rather, it decided that gives the ID scanner and printer the component parts of the RBS cannot the intangible software, partially ability to function within the RBS, this function as a visitor management system developed in the United States, and does not change the fact that these without the Raptor software, citing to tangible U.S.-origin blank discs, when products have a predetermined use HRL H090115, dated August 2, 2010, combined by loading the software onto prior to having software installed onto and HRL H21555, dated July 13, 2012. the discs, resulted in one product of the them in the United States. See HRL The software installation process in United States. H215657, dated April 29, 2013 (holding HRL H090115 was only part of the 16 Unlike HRL H268858, where CBP that the process of developing and day process that rendered a substantial determined the country of origin of a installing software onto foreign transformation, and thus is tangible product, here we have no flashlights in the United States did not distinguished from this case which only change the basic operations of the involves a one to three hour process per asabaliauskas on DSK3SPTVN1PROD with NOTICES indication that the Raptor software by itself is a tangible product prior to its flashlight). Likewise, the process of system, mainly focusing on the software integration with the scanners and customizing the RBS to work with installation. Similarly we distinguish printers of the RBS. In rendering final multiple devices and multiple HRL H21555 because that case involved determinations for purposes of U.S. databases, or the process of training the microcomputer devices which could not Government procurement, CBP customer how to use the system, will function without the proprietary not transform the scanner into software, whereas this case involves 1 Raptor also cites to HRL H192146, dated June 8, something other than a scanner or the printers and scanners that are functional 2012, which is a non-binding advisory ruling. printer into something other than a without the Raptor software. VerDate Sep<11>2014 19:15 May 18, 2017 Jkt 241001 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 E:\FR\FM\19MYN1.SGM 19MYN1

23018 Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices Additionally, we note that the ID a product of the United States. Rather, available for inspection at both the scanner and printer are products that for purposes of U.S. Government online location and the respective can be individually purchased and used procurement, the labels are products of Community Map Repository address outside of the system without the Raptor the United States, and the ID scanner listed in the table below. Additionally, software. Thus, whether these products and printer remain products of China the current effective FIRM and FIS are substantially transformed into the because they are not substantially report for each community are RBS is really a question of whether the transformed by the processes that take accessible online through the FEMA software development and loading are place in the United States. Moreover, to Map Service Center at sufficient to transform these individual the extent the RBS-compatible barcode www.msc.fema.gov for comparison. products into a different article of scanner is manufactured in Taiwan, it is You may submit comments, identified commerce, the RBS. As indicated above, a product of Taiwan for purposes of U.S. by Docket No. FEMA–B–1664, to Rick regardless of the software installed onto Government procurement. Sacbibit, Chief, Engineering Services the ID scanner and printer, the ID Notice of this final determination will Branch, Federal Insurance and scanner and printer already have their be given in the Federal Register, as Mitigation Administration, FEMA, 400 respective functions as scanners and required by 19 C.F.R. § 177.29. Any C Street SW., Washington, DC 20472, printers prior to their incorporation into party-at-interest other than the party (202) 646–7659, or (email) the system. They function as scanners which requested this final patrick.sacbibit@fema.dhs.gov. and printers when they are determination may request, pursuant to FOR FURTHER INFORMATION CONTACT: Rick manufactured in China, their basic 19 C.F.R. § 177.31, that CBP reexamine Sacbibit, Chief, Engineering Services functions in this regard do not change the matter anew and issue a new final Branch, Federal Insurance and once imported into the United States, determination. Pursuant to 19 C.F.R. Mitigation Administration, FEMA, 400 and their physical appearance will § 177.30, any party-at-interest may, C Street SW., Washington, DC 20472, remain the same even after integrated within 30 days of publication of the (202) 646–7659, or (email) into the RBS. Accordingly, the ID Federal Register Notice referenced patrick.sacbibit@fema.dhs.gov; or visit scanner and printer remain products of above, seek judicial review of this final the FEMA Map Information eXchange China for purposes of U.S. Government determination before the Court of (FMIX) online at procurement. International Trade. www.floodmaps.fema.gov/fhm/fmx_ With regard to the Blanco labels, main.html. Sincerely, Raptor indicates that such will be designed and manufactured in the Alice A. Kipel, Executive Director SUPPLEMENTARY INFORMATION: FEMA United States. Similarly, Raptor Regulations and Rulings proposes to make flood hazard indicates that the barcode scanner will Office of Trade determinations for each community be manufactured entirely in Taiwan. [FR Doc. 2017–10057 Filed 5–18–17; 8:45 am] listed in the table below, in accordance Raptor provides affidavits signed by the BILLING CODE P with Section 110 of the Flood Disaster label manufacturer and barcode scanner Protection Act of 1973, 42 U.S.C. 4104, manufacturer stating that such are and 44 CFR 67.4(a). products of the United States and DEPARTMENT OF HOMELAND These proposed flood hazard Taiwan, respectively. To the extent that SECURITY determinations, together with the the labels and barcode scanner are floodplain management criteria required products from the United States and Federal Emergency Management by 44 CFR 60.3, are the minimum that Taiwan, respectively, each may be Agency are required. They should not be individually compliant under the TAA. [Docket ID FEMA–2017–0002; Internal construed to mean that the community While the labels are products that are Agency Docket No. FEMA–B–1664] must change any existing ordinances integrated within the RBS, their country that are more stringent in their of origin does not change the country of Proposed Flood Hazard floodplain management requirements. origin of the ID scanner and printer Determinations The community may at any time enact within the RBS. In a number of rulings stricter requirements of its own, or AGENCY: Federal Emergency pursuant to policies established by other CBP stated, ‘‘merely packaging parts of Management Agency; DHS. Federal, State, or regional entities. a kit together does not constitute a substantial transformation.’’ See HRL ACTION: Notice; correction. These flood hazard determinations are 732498, dated October 3, 1989; and HRL used to meet the floodplain SUMMARY: On January 23, 2017, FEMA 732897, dated June 6, 1990. As noted management requirements of the NFIP published in the Federal Register a from these rulings, packaging the ID and are also used to calculate the proposed flood hazard determination scanner and printers with the labels appropriate flood insurance premium notice that contained an erroneous does not substantially transform these rates for new buildings built after the table. This notice provides corrections products because such are already in FIRM and FIS report become effective. to that table, to be used in lieu of the Use of a Scientific Resolution Panel their finished forms, not modified or information published at 82 FR 7849. affixed to each other, or combined in a (SRP) is available to communities in The table provided here represents the support of the appeal resolution permanent matter. Accordingly, the ID proposed flood hazard determinations scanner and printers remain products of process. SRPs are independent panels of and communities affected for Los experts in hydrology, hydraulics, and asabaliauskas on DSK3SPTVN1PROD with NOTICES the country where they will be Angeles County, California, and manufactured, China. other pertinent sciences established to Incorporated Areas. review conflicting scientific and HOLDING: DATES: Comments are to be submitted technical data and provide Based on the facts provided, the on or before August 17, 2017. recommendations for resolution. Use of integration of the ID scanner, printer, ADDRESSES: The Preliminary Flood the SRP may only be exercised after and labels via the Raptor software into Insurance Rate Map (FIRM), and where FEMA and local communities have been the RBS does not substantially applicable, the Flood Insurance Study engaged in a collaborative consultation transform these individual products into (FIS) report for each community are process for at least 60 days without a VerDate Sep<11>2014 19:15 May 18, 2017 Jkt 241001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\19MYN1.SGM 19MYN1


Document Created: 2018-11-08 08:48:26
Document Modified: 2018-11-08 08:48:26
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 May 08, 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 June 19, 2017.
ContactRobert Dinerstein, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade, at (202) 325-0132.
FR Citation82 FR 23015 
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