83 FR 12803 - Notice of Issuance of Final Determination Concerning Certain Monochrome Laser Printers and Replacement Toner Cartridges
DEPARTMENT OF HOMELAND SECURITY
Customs and Border Protection Federal Register Volume 83, Issue 57 (March 23, 2018)
Customs and Border Protection
Federal Register Volume 83, Issue 57 (March 23, 2018)
| Page Range | 12803-12806 | |
| FR Document | 2018-05964 |
[Federal Register Volume 83, Number 57 (Friday, March 23, 2018)] [Notices] [Pages 12803-12806] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-05964] ----------------------------------------------------------------------- DEPARTMENT OF HOMELAND SECURITY Customs and Border Protection Notice of Issuance of Final Determination Concerning Certain Monochrome Laser Printers and Replacement Toner Cartridges 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 monochrome laser printers and replacement toner cartridges. Based upon the facts presented, CBP has concluded that the country of origin of the monochrome laser printers and replacement toner cartridges in question is Japan, for purposes of U.S. Government procurement. DATES: The final determination was issued on March 19, 2018. A copy of the final determination is attached. Any party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial review of this final determination within April 23, 2018. FOR FURTHER INFORMATION CONTACT: Yuliya A. Gulis, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade, at (202) 325-0042. SUPPLEMENTARY INFORMATION: Notice is hereby given that on March 19, 2018 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 certain monochrome laser printers and replacement toner cartridges, which may be offered to the U.S. Government under an undesignated government procurement contract. This final determination, HQ H287548, 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. Sec. Sec. 2511-18). In the final determination, CBP concluded that the country of origin of the monochrome laser printers is Japan for purposes of U.S. Government procurement. CBP also determined that the country of origin of replacement toner cartridges is Japan for purposes of U.S. Government procurement. Section 177.29, CBP Regulations (19 CFR 177.29), provides that a notice of final determination shall be published in the Federal Register within 60 days of the date the final determination is issued. Section 177.30, CBP Regulations (19 CFR 177.30), provides that any party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial review of a final determination within 30 days of publication of such determination in the Federal Register. Dated: March 19, 2018. Alice A. Kipel, Executive Director, Regulations and Rulings, Office of Trade. HQ H287548 March 19, 2018 OT:RR:CTF:VS H287548 YAG CATEGORY: Origin Mr. Stanley R. Soya Baker Botts LLP The Warner 1299 Pennsylvania Avenue, NW Washington, D.C. 20004-2400 RE: U.S. Government Procurement; Country of Origin of Monochrome Laser Printers and Replacement Toner Cartridges; Title III, Trade Agreements Act of 1979 (19 U.S.C. Sec. 2511 et seq.); Subpart B, Part 177, CBP Regulations Dear Mr. Soya: This is in response to your correspondence, dated June 14, 2017, requesting a final determination, pursuant to subpart B of Part 177 of the U.S. Customs and Border Protection (``CBP'') Regulations (19 C.F.R. Sec. 177.21 et seq.), on behalf of your clients, Brother Industries (U.S.A.) (``BIUS'') and Brother International Corporation (``BIC'') (collectively ``Brother''), concerning the country of origin of monochrome laser printers and replacement toner cartridges. We note that BIUS and BIC are parties-at-interest within the meaning of 19 C.F.R. Sec. 177.22(d)(1) and are entitled to request this final determination. FACTS: Monochrome Laser Printers: Brother plans to manufacture two new printer models in the United States: (1) the HL-L6400DWG, a printer, and (2) the MFC- L6900DWG, a multifunctional printer/scanner/copier/fax (collectively ``monochrome laser printers''). These monochrome laser printers will be comprised of approximately 1,100 parts and components from several countries, including Japan, the Philippines, China, and Vietnam. The printers are comprised of 8 main subassemblies, as follows: (1) Main printed circuit board (``PCB'') assembly or motherboard of the machine: It will communicate with the PC, house the memory in the printer, and form the image printed on the page. The main component of the main PCB will be the Application Specific Integrated Circuit (``ASIC''), which includes the Central Processor Unit (``CPU'') and other functional circuits, including the mechanical control circuit, USB communication control circuit, printing data processing circuit, and memory control circuit. Most of the digital processing functions of the main PCB will be processed by the ASIC. The overall ASIC structure and each functional circuit will be designed in Japan and manufactured by third-party suppliers in Japan. The other main components of the main PCB, which include the random-access memory (``RAM''), read- only memory (``ROM''), electrically erasable programmable read-only memory (``EEPROM''), and printed circuit board, will be produced in various other countries. The components of the main PCB assembly will be assembled in Japan. (2) Firmware: The firmware will be software embedded in the main PCB of the machines to provide the control program for the device. The overall design and most steps in the development of the firmware will be performed in Japan. (3) Fuser unit: The fuser unit will apply pressure and heat to the printed page to enable toner to permanently melt onto it. The main components of the fuser unit, including a pressure roller, halogen lamp, thermistor [[Page 12804]] sensor, drive gear, upper case, and lower case, will be produced in various countries. The components of the fuser unit will be assembled in Vietnam. (4) Automatic Document Feeder (``ADF'') unit: The ADF unit takes up to 80 pages and feeds them one page at a time into the scanner, allowing for the copying, printing or faxing of multi-page documents without requiring the user to manually replace each page. This subassembly will be available for the MFC-L6900DWG. The main components of the ADF unit, including ADF cover, document cover, and document separate roller will be produced in various countries, and assembled in Vietnam. (5) Organic Photo Conductor (``OPC'') drum unit: The OPC drum unit is an aluminum cylinder that attracts toner using an electrostatic charge that is transferred to paper to create a printed image. The main components of the OPC drum unit, including the OPC drum, corona wire, drive gear, and case, will be produced in various countries, and assembled in Vietnam. (6) Toner cartridge: The toner cartridge will hold the toner that is transferred to an electrostatically charged OPC drum. The main component of the toner cartridge, the toner powder, will be produced in Japan. All other components of the toner cartridge, including the developer roller, agitator, supply roller, drive gear, and cases, are produced in various countries. The components of the toner cartridge will be assembled in Vietnam. (7) Operation panel unit: The operation panel unit controls printer functions and communicates information about the printer and print jobs. The main components of the operation panel unit, including the LCD assembly, which displays the machine status and menu, the LCD control board, touch sensor, key switch, and panel cover, will be produced in various countries, and will be assembled in Vietnam. (8) Body unit: The body unit consists of various components, such as the cover and frame, paper tray, high-voltage and low- voltage power supply boards, paper feeder, laser unit, flatbed document scanner, and modem board. These components will come from various countries, and will be assembled in Vietnam. It is claimed that the main PCB assembly and the firmware represent the ``brains'' of the printer. Further, it is claimed that the Vietnamese subassembly production of the fuser unit, ADF unit, OPC drum unit, toner cartridge, and body unit, as described above, does not require sophisticated skills or expensive machinery. The subassemblies will be generally assembled in Vietnam by using jigs and an electric screwdriver to connect the individual parts of each unit together. The final manufacturing operations of the monochrome laser printers will take place in the United States, and will take approximately 40 minutes to complete (this timeframe includes testing of the final product). The manufacturing process for two models of the monochrome laser printers slightly differs in steps, but in both cases, the process involves threading brittle wires through spaces into necessary ports to connect various subassemblies, which requires a degree of precision to ensure that cables and connectors are not damaged or improperly connected. Counsel provided a step-by-step description of the finished printer assembly. Counsel also highlighted the complexity of the process by indicating the fact that, if inserted incorrectly, the cables (which are thin strips of conductive aluminum, coated in a thin layer of insulating material) can break and cause the printer to malfunction throughout its lifecycle. Moreover, there are several cables that, if damaged during the assembly, will require replacement of the entire subassembly upon which the cable is soldered. The main PCB assembly and the firmware, though produced in Japan, will be integrated into the printers in the United States. Once assembly is completed, both printer models will undergo testing and inspection, which is customized by Brother in Japan to ensure optimal functionality of each printer. Testing and inspection includes not only running Brother's proprietary inspection system, but also a manual inspection of components and overall functioning of the product. These steps will include verifying and installing the firmware to the main PCB assembly and calibrating the position of the laser beam's exposure starting point. Finally, counsel emphasizes that Brother employees responsible for assembling, inspecting and testing the printers in the United States will be required to undergo approximately two weeks of customized training. Replacement toner cartridges: Brother also plans to sell new replacement toner cartridges to the U.S. Government as a separate consumable end-product. The toner cartridges can be used interchangeably in both the model HL- L6400DWG, printer; and the model MFC-L6900DWG, printer/scanner/ copier/fax. The cartridges will be mainly comprised of the following parts: (1) toner powder; (2) supply rollers; (3) developer roller; (4) toner uniform blade; and, (5) cleaning unit. Counsel maintains that the toner powder is the most critical component of the cartridge, as it is a complex powder that allows the printers to form an image on paper. Brother's toner powder will be developed and manufactured in Japan at a toner manufacturer's facility. The toner powder will account for approximately 40% of the total parts and cost of the toner cartridges. The finished cartridge will be made of 29 parts from Japan, Vietnam, China, Philippines, Malaysia, and Indonesia. All these components will be brought together by the manufacturing process in Japan to build the replacement cartridges. The most expensive parts of the cartridge include: (1) the toner powder, which is manufactured in Japan; (2) the developer roller, which will be manufactured in Japan and the Philippines; and, (3) the supply roller and the blade, which will be manufactured in China. Counsel claims that the country of origin of Brother replacement toner cartridges is Japan. ISSUE: What is the country of origin of the monochrome laser printers and replacement toner cartridges for purposes of U.S. Government procurement? LAW AND ANALYSIS: CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain ``Buy American'' restrictions in U.S. law or practice for products offered for sale to the U.S. Government, pursuant to subpart B of Part 177, 19 C.F.R. Sec. 177.21 et seq., which implements Title III of the Trade Agreements Act of 1979 (``TAA''), as amended (19 U.S.C. Sec. 2511 et seq.). 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 rendering final determinations for purposes of U.S. Government procurement, CBP applies the provisions of subpart B of Part 177 consistent with the Federal Procurement Regulations. See 19 C.F.R. Sec. 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 Trade Agreements Act. See 48 C.F.R. Sec. 25.403(c)(1). The Federal Acquisition Regulations define ``U.S.-made end product'' as ``an article that is mined, produced, or manufactured in the United States or that is substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.'' See 48 C.F.R. Sec. 25.003. In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 C.I.T. 204, 573 F. Supp. 1149 (1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or combining process is a minor one that leaves the identity of the imported article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982). In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (``CIT'') interpreted the meaning of ``substantial transformation'' as used in the TAA for purposes of government procurement. Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight, under the TAA. All of the components of the Generation II flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components [[Page 12805]] were imported into the United States where they were assembled into the finished Generation II flashlight. The court reviewed the ``name, character and use'' test utilized in determining whether a substantial transformation has occurred and noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. at 226, 542 F. Supp. at 1031, aff'd, 702 F.2d 1022 (Fed. Cir. 1983), that when ``the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.'' Energizer at 1318. In addition, the court noted that ``when the end-use was pre- determined at the time of importation, courts have generally not found a change in use.'' Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff'd, 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. In reaching its decision in Energizer, the court expressed the question as one of whether the imported components retained their names after they were assembled into the finished Generation II flashlights. The court found ``[t]he constitutive components of the Generation II flashlight do not lose their individual names as a result [of] the post-importation assembly.'' The court also found that the components had a pre-determined end-use as parts and components of a Generation II flashlight at the time of importation and did not undergo a change in use due to the post-importation assembly process. Finally, the court did not find the assembly process to be sufficiently complex as to constitute a substantial transformation. Thus, the court found that Energizer's imported components did not undergo a change in name, character, or use as a result of the post-importation assembly of the components into a finished Generation II flashlight. Virtually all of the components of the military Generation II flashlight, including the most important component, the LED, were of Chinese origin. Thus, the court determined that China was the correct country of origin of the finished Generation II flashlights under the government procurement provisions of the TAA. Monochrome Laser Printers: In this case, counsel argues that the country of origin of the monochrome laser printers at issue will be the United States because the printers will be assembled in a process that involves: (1) complex post-importation assembly operations; (2) the installation of the main PCB assembly and a firmware verification and download; and, (3) a customized testing and inspection process. In support of its position, counsel cites Headquarters Ruling Letters (``HQ'') H241146, dated May 21, 2013; HQ H185775, dated December 21, 2011; and, HQ 560677, dated February 3, 1998. We disagree. In HQ H241146, CBP considered the country of origin of monochrome laser printers. In that case, Chinese subassemblies were imported into the United States, where they were assembled with U.S.-origin PCBs, and programmed with Japanese-origin firmware. CBP found that the last substantial transformation occurred in the United States. While the printers were comprised of subassemblies and components from various countries, they were also comprised of a controller unit assembled in the United States (with U.S.-origin PCBs), which was important to the function of the printers. We note that the case at issue is distinguishable from HQ H241146 because in addition to the final printer assembly in the United States, the printers in HQ H241146 contained U.S.-origin PCBs. In HQ H185775, CBP considered the country of origin of a multifunction office machine. In that case, the incomplete print engine was produced in Vietnam and consisted of a metal frame, plastic skins, motors, controller board with supplier-provided firmware, a laser scanning system, paper trays, cabling paper transport rollers, and miscellaneous sensing and imaging systems. The incomplete print engine was shipped to Mexico, where the following assemblies were added: the formatter board, scanner/ automatic document feeder, control panel, fax card, hard disk drive/ solid state drive, firmware (which was developed and written in the United States), along with other minor components and accessories. CBP determined that Mexico was the country of origin because the assembly of the various components resulted in a substantial transformation. We find HQ H185775 distinguishable because the assembly in Mexico involved multiple components from various countries, including TAA-designated countries. In HQ 560677, CBP considered two different notebook computers manufactured in the United States with parts and components from various countries. CBP concluded that the foreign components used in the manufacture of the notebook computers lost their separate identities and became an integral part of a notebook computer as a result of the operations performed in the United States. We note that HQ 560677 specifically pertains to notebook computers, which is a different product from the monochrome laser printers at issue, and CBP has considered many other scenarios involving the production of printers that are more relevant to this case. For example, in HQ H219519, dated April 3, 2013, CBP considered the country of origin of a color printer and fax machine under three different scenarios. In scenarios one and two, the color printer and fax machine underwent the following operations in Mexico: final assembly, downloading firmware written in the United States, and testing, which included making settings appropriate to the buyer's country and the client's specific needs. In scenario one, the assembly took 3-4 minutes whereby the external memory drive was installed onto the formatter and the cables were routed as necessary. The firmware for the engine and formatter was downloaded onto the hard drive or solid state drive. In scenario two, the assembly took 7-8 minutes and involved the assembly discussed in scenario one, plus the installation of the intermediate transfer belt. In both scenarios, the testing took 7-14 minutes and included making certain settings for the language, paper, functionality, and other feature settings, as described above. In scenario three, the color printer and fax machine underwent assembly in Mexico that took 2-3 minutes, the firmware for the sub-systems (engine, formatter) was downloaded onto the hard drive or solid state drive, and the product underwent testing. The cost of the incomplete print engine was the most expensive of the hardware components, with the formatter board being the second-most expensive component. CBP determined that the country of origin of the imported printers was China under all three scenarios, since the assembly performed in Mexico was not significant enough to result in a substantial transformation of the Chinese components and subassemblies. In reaching its decision, CBP emphasized that all of the components were produced in China (with the exception of the hard disk from Malaysia), including all the significant parts that were the essence of the finished product, particularly the high-cost print engine and formatter board. With respect to the final assembly processes in the United States, we find that this case is similar to HQ H219519 and the CIT's decision in Energizer because the assembly process in the United States is not sufficiently complex for the last substantial transformation to occur in the United States. Rather, all of the fully finished printer subassemblies are manufactured in Vietnam, and the PCB and firmware are made in Japan. Thus, substantial manufacturing operations are performed in these countries. Once the Vietnamese subassemblies and the Japanese-origin PCB are imported into the United States, these 10 subassemblies are soldered/wired together, and programmed with the Japanese-origin firmware. All of these processes, including the testing of the finished printer (which accounts for half of the time of the printer's manufacture), are concluded in just 40 minutes. The manufacturing processes of these subassemblies in the United States do not rise to the level of complex processes necessary for a substantial transformation to occur. In fact, the end-use of the imported and fully assembled subassemblies is already pre-determined at the time of importation. See Energizer at 1319. Additionally, despite counsel's attempt to make the manufacturing processes in the United States appear to be more complex, upon reviewing the provided materials, we find that ``threading brittle wires through spaces into necessary ports to connect various subassemblies'' amounts to nothing more than simply feeding the wiring harnesses through designated areas, especially considering that the subassemblies in question are already manufactured in a manner that allows for a relatively easy downstream installation. Accordingly, the manufacturing processes that occur in the United States will not subsume the individual subassemblies into a new and distinct article of commerce that has a new name, character, and use. As discussed in Energizer, in cases in which the post- importation processing entails assembly, courts have considered the nature of the assembly together with the [[Page 12806]] name, character, or use test in making a substantial transformation determination. See Ran-Paige Co., Inc. v. United States, 35 Fed. Cl. 117, 121 (1996); Belcrest Linens, 741 F.2d at 1371; Uniroyal, 3 C.I.T. at 226, 542 F. Supp. at 1031. The court has sometimes compared the degree of operations in pre versus post-importation processing to evaluate whether a substantial transformation occurred. For example, in Nat'l Hand Tool, the court contrasted the pre-importation processing of cold forming and hot-forging and noted that it required more complicated functions than post-importation processing, which included heat treatment and electroplating. 16 C.I.T. at 311; see also Uniroyal, 3 C.I.T. at 224-227, 542 F.Supp. at 1029-31 (comparing a post-importation ``minor manufacturing or combining process'' in which imported shoe uppers were attached to outsoles with ``complex manufacturing processes'' that occurred pre- importation when the imported uppers were produced). In such cases, CBP has focused on the importance of other components to make an origin determination. For example, in HQ H018467, dated January 4, 2008, CBP was asked to consider two manufacturing scenarios for multi-function printers. In one scenario, manufacturing took place in two countries; in the other, it took place in three countries. In the two-country scenario, 18 units were manufactured in the Philippines from components produced in various countries. The units were sent to Japan where the system control board, engine control board, OPC drum unit, and the toner reservoir were manufactured and incorporated into the units. The control boards were programmed in Japan with Japanese firmware that controlled the user interface, imaging, memories, and the mechanics of the machines. The machines were then inspected and adjusted as necessary. CBP found that the manufacturing operations in Japan substantially transformed the Philippine units such that Japan was the country of origin of the multifunctional machines. In making the determination (and in addition to the finding that operations performed in Japan were meaningful and complex and resulted in an article of commerce with a new name, character and use), CBP took into consideration the fact that the system control board, the engine control board, and the firmware, which were very important to the functionality of the machines, were manufactured in Japan. Similarly, in HQ W563491, dated February 8, 2007, CBP was asked to consider a two-country scenario where all of the subassemblies of the multifunction machine were made in China, with the exception of the controller unit subassembly, application specific integrated circuits and firmware, which were made in Japan. In that case, the final assembly, testing, and the final inspection were done in Japan. Although CBP stated that the product assembly in Japan was also complex and meaningful, CBP focused on the origin of key components in finding that the country of origin was Japan. See also HQ H020516, dated November 7, 2008 (CBP considered Sharp Andromeda II J models composed of eight main subassemblies, two of which involved processing in Japan. All the engineering, development, design, and artwork were developed in Japan. The multifunctional printer control unit was described as the brain of the model. While some of the components were installed on the control printer board in China, the flash read-only memory which included firmware developed in Japan, was manufactured in Japan. The other unit that involved production in Japan was the process unit, that housed a drum produced in Japan. The process unit was assembled in China. The other subassemblies were assembled in China but certain key components of the subassemblies originated in Japan. The final assembly was performed in Japan. Based on the totality of the circumstances discussed in this ruling, CBP agreed that the Jupiter II J-models were considered a product of Japan). Similar to HQ H018467, HQ W563491, and HQ H020516, in this case, the main PCB assembly is the motherboard of the printers, which communicates with the PC, houses the memory in the printer, and forms the image printed on the page. It also includes key functional circuits, including mechanical control and printing data processing. Additionally, the overall structure and each functional circuit of the ASIC, the main component of PCB, will be designed in Japan and manufactured by third-party suppliers in Japan. The firmware itself provides the control program for the printers and enables the main PCB assembly to function as the electronic ``brains'' of the printers by controlling all printer functions. The main PCB assembly (consisting of approximately 1,028 components) and the firmware, produced in Japan, a TAA-designated country, account for a significant percentage of the total subassembly cost. Together, the firmware and the main PCB, which serve major functions and are high in value, constitute the essential character of the printers. We note that in the three rulings referenced above, the key components and the firmware were manufactured and developed in the same country in which the final assembly took place. This is not the case here. However, considering that the production of the printer occurs in three countries, we find the last substantial transformation to occur in Japan, given that the essential character of the printer is made in Japan. Accordingly, we find that Japan is the country of origin of the monochrome laser printers. Replacement toner cartridges: Finally, counsel argues that Japan is the country of origin for the Brother replacement toner cartridges. Several CBP rulings are cited in counsel's submission. HQ H251592, dated June 24, 2014, describes an AIO cartridge with three main components: 1) toner powder; 2) developer unit; and, 3) cleaning unit. In HQ H251592, CBP determined that the processing in Japan substantially transformed the non-Japanese components. We find that a similar rationale can be applied to Brother's replacement cartridges. Therefore, it is the opinion of this office that the country of origin of the replacement toner cartridges will be Japan. HOLDING: Based on the facts provided, the imported fully assembled printer subassemblies from Japan and Vietnam will not be substantially transformed into finished monochrome laser printers by the processes that take place in the United States. However, the finished monochrome laser printers will be considered a product of Japan for purposes of U.S. Government procurement. With respect to the Brother replacement toner cartridges, the country of origin will be Japan. 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, Monika R. Brenner for Alice A. Kipel, Executive Director Regulations and Rulings Office of Trade [FR Doc. 2018-05964 Filed 3-22-18; 8:45 am] BILLING CODE 9111-14-P
![Federal Register / Vol. 83, No. 57 / Friday, March 23, 2018 / Notices 12803
Guidance on Appointment of Lobbyist presented, CBP has concluded that the Washington, D.C. 20004–2400
to Federal Advisory Committees, Boards country of origin of the monochrome RE: U.S. Government Procurement; Country
and Commissions’’ (79 FR 47482, laser printers and replacement toner of Origin of Monochrome Laser Printers
August 13, 2014). The position we list cartridges in question is Japan, for and Replacement Toner Cartridges; Title
for a member from the general public purposes of U.S. Government III, Trade Agreements Act of 1979 (19
U.S.C. § 2511 et seq.); Subpart B, Part
would be someone appointed in their procurement.
177, CBP Regulations
individual capacity and would be DATES: The final determination was Dear Mr. Soya:
designated a Special Government issued on March 19, 2018. A copy of the
Employee as defined in 202 (a) of Title This is in response to your
final determination is attached. Any correspondence, dated June 14, 2017,
18, United States Code. Registered party-at-interest, as defined in 19 CFR requesting a final determination, pursuant to
lobbyists are lobbyists as defined in 177.22(d), may seek judicial review of subpart B of Part 177 of the U.S. Customs and
Title 2 U.S.C. 1602 who are required by this final determination within April 23, Border Protection (‘‘CBP’’) Regulations (19
Title 2 U.S.C. 1603 to register with the 2018. C.F.R. § 177.21 et seq.), on behalf of your
Secretary of the Senate and the Clerk of FOR FURTHER INFORMATION CONTACT:
clients, Brother Industries (U.S.A.) (‘‘BIUS’’)
the House of Representatives. and Brother International Corporation
Yuliya A. Gulis, Valuation and Special (‘‘BIC’’) (collectively ‘‘Brother’’), concerning
The Department of Homeland
Programs Branch, Regulations and the country of origin of monochrome laser
Security does not discriminate in
Rulings, Office of Trade, at (202) 325– printers and replacement toner cartridges.
selection of Committee members on the
0042. We note that BIUS and BIC are parties-at-
basis of race, color, religion, sex, interest within the meaning of 19 C.F.R.
SUPPLEMENTARY INFORMATION: Notice is
national origin, political affiliation, § 177.22(d)(1) and are entitled to request this
sexual orientation, gender identity, hereby given that on March 19, 2018
final determination.
marital status, disabilities and genetic pursuant to subpart B of Part 177, U.S.
information, age membership in an Customs and Border Protection FACTS:
employee organization, or any other Regulations (19 CFR part 177, subpart Monochrome Laser Printers:
non-merit factor. The Department of B), CBP issued a final determination
Brother plans to manufacture two new
Homeland Security strives to achieve a concerning the country of origin of printer models in the United States: (1) the
widely diverse candidate pool for all of certain monochrome laser printers and HL–L6400DWG, a printer, and (2) the MFC–
its recruitment actions. replacement toner cartridges, which L6900DWG, a multifunctional printer/
If you are interested in applying to may be offered to the U.S. Government scanner/copier/fax (collectively
become a member of the Committee, under an undesignated government ‘‘monochrome laser printers’’). These
procurement contract. This final monochrome laser printers will be comprised
send your cover letter and resume to Mr. of approximately 1,100 parts and
Patrick Clark, Alternate Designated determination, HQ H287548, was issued
under procedures set forth at 19 CFR components from several countries,
Federal Officer of the National Offshore including Japan, the Philippines, China, and
Safety Advisory Committee, via one of part 177, subpart B, which implements
Vietnam. The printers are comprised of 8
the transmittal methods in the Title III of the Trade Agreements Act of main subassemblies, as follows:
ADDRESSES section by the deadline in 1979, as amended (19 U.S.C. §§ 2511– (1) Main printed circuit board (‘‘PCB’’)
the DATES section of this notice. All 18). In the final determination, CBP assembly or motherboard of the machine: It
email submittals will receive email concluded that the country of origin of will communicate with the PC, house the
receipt confirmation. the monochrome laser printers is Japan memory in the printer, and form the image
for purposes of U.S. Government printed on the page. The main component of
Dated: March 20, 2018. procurement. CBP also determined that the main PCB will be the Application
Jeffrey G. Lantz, the country of origin of replacement Specific Integrated Circuit (‘‘ASIC’’), which
Director of Commercial Regulations and includes the Central Processor Unit (‘‘CPU’’)
toner cartridges is Japan for purposes of
Standards. and other functional circuits, including the
U.S. Government procurement. mechanical control circuit, USB
[FR Doc. 2018–05944 Filed 3–22–18; 8:45 am] Section 177.29, CBP Regulations (19 communication control circuit, printing data
BILLING CODE 9110–04–P CFR 177.29), provides that a notice of processing circuit, and memory control
final determination shall be published circuit. Most of the digital processing
in the Federal Register within 60 days functions of the main PCB will be processed
DEPARTMENT OF HOMELAND of the date the final determination is by the ASIC. The overall ASIC structure and
SECURITY issued. Section 177.30, CBP Regulations each functional circuit will be designed in
(19 CFR 177.30), provides that any Japan and manufactured by third-party
Customs and Border Protection party-at-interest, as defined in 19 CFR suppliers in Japan. The other main
components of the main PCB, which include
177.22(d), may seek judicial review of a
Notice of Issuance of Final the random-access memory (‘‘RAM’’), read-
final determination within 30 days of only memory (‘‘ROM’’), electrically erasable
Determination Concerning Certain
publication of such determination in the programmable read-only memory
Monochrome Laser Printers and
Federal Register. (‘‘EEPROM’’), and printed circuit board, will
Replacement Toner Cartridges
Dated: March 19, 2018. be produced in various other countries. The
AGENCY: U.S. Customs and Border Alice A. Kipel, components of the main PCB assembly will
Protection, Department of Homeland be assembled in Japan.
Executive Director, Regulations and Rulings, (2) Firmware: The firmware will be
Security. Office of Trade. software embedded in the main PCB of the
ACTION: Notice of final determination.
HQ H287548 machines to provide the control program for
the device. The overall design and most steps
amozie on DSK30RV082PROD with NOTICES
SUMMARY: This document provides March 19, 2018
in the development of the firmware will be
notice that U.S. Customs and Border OT:RR:CTF:VS H287548 YAG performed in Japan.
Protection (‘‘CBP’’) has issued a final CATEGORY: Origin (3) Fuser unit: The fuser unit will apply
determination concerning the country of Mr. Stanley R. Soya pressure and heat to the printed page to
origin of certain monochrome laser Baker Botts LLP enable toner to permanently melt onto it. The
printers and replacement toner The Warner main components of the fuser unit, including
cartridges. Based upon the facts 1299 Pennsylvania Avenue, NW a pressure roller, halogen lamp, thermistor
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![Federal Register / Vol. 83, No. 57 / Friday, March 23, 2018 / Notices 12805
were imported into the United States where they were assembled with U.S.-origin PCBs, In both scenarios, the testing took 7-14
they were assembled into the finished and programmed with Japanese-origin minutes and included making certain settings
Generation II flashlight. firmware. CBP found that the last substantial for the language, paper, functionality, and
The court reviewed the ‘‘name, character transformation occurred in the United States. other feature settings, as described above. In
and use’’ test utilized in determining whether While the printers were comprised of scenario three, the color printer and fax
a substantial transformation has occurred and subassemblies and components from various machine underwent assembly in Mexico that
noted, citing Uniroyal, Inc. v. United States, countries, they were also comprised of a took 2-3 minutes, the firmware for the sub-
3 C.I.T. at 226, 542 F. Supp. at 1031, aff’d, controller unit assembled in the United systems (engine, formatter) was downloaded
702 F.2d 1022 (Fed. Cir. 1983), that when States (with U.S.-origin PCBs), which was onto the hard drive or solid state drive, and
‘‘the post-importation processing consists of important to the function of the printers. We the product underwent testing. The cost of
assembly, courts have been reluctant to find note that the case at issue is distinguishable the incomplete print engine was the most
a change in character, particularly when the from HQ H241146 because in addition to the expensive of the hardware components, with
imported articles do not undergo a physical final printer assembly in the United States, the formatter board being the second-most
change.’’ Energizer at 1318. In addition, the the printers in HQ H241146 contained U.S.- expensive component. CBP determined that
court noted that ‘‘when the end-use was pre- origin PCBs. the country of origin of the imported printers
determined at the time of importation, courts In HQ H185775, CBP considered the was China under all three scenarios, since
have generally not found a change in use.’’ country of origin of a multifunction office the assembly performed in Mexico was not
Energizer at 1319, citing as an example, machine. In that case, the incomplete print significant enough to result in a substantial
National Hand Tool Corp. v. United States, engine was produced in Vietnam and transformation of the Chinese components
16 C.I.T. 308, 310, aff’d, 989 F.2d 1201 (Fed. consisted of a metal frame, plastic skins, and subassemblies. In reaching its decision,
Cir. 1993). Furthermore, courts have motors, controller board with supplier- CBP emphasized that all of the components
considered the nature of the assembly, i.e., provided firmware, a laser scanning system, were produced in China (with the exception
whether it is a simple assembly or more paper trays, cabling paper transport rollers, of the hard disk from Malaysia), including all
complex, such that individual parts lose their and miscellaneous sensing and imaging the significant parts that were the essence of
separate identities and become integral parts systems. The incomplete print engine was the finished product, particularly the high-
of a new article. shipped to Mexico, where the following cost print engine and formatter board.
In reaching its decision in Energizer, the assemblies were added: the formatter board, With respect to the final assembly
court expressed the question as one of scanner/automatic document feeder, control processes in the United States, we find that
whether the imported components retained panel, fax card, hard disk drive/solid state this case is similar to HQ H219519 and the
their names after they were assembled into drive, firmware (which was developed and CIT’s decision in Energizer because the
the finished Generation II flashlights. The written in the United States), along with assembly process in the United States is not
court found ‘‘[t]he constitutive components other minor components and accessories. sufficiently complex for the last substantial
of the Generation II flashlight do not lose CBP determined that Mexico was the country transformation to occur in the United States.
their individual names as a result [of] the of origin because the assembly of the various Rather, all of the fully finished printer
post-importation assembly.’’ The court also components resulted in a substantial subassemblies are manufactured in Vietnam,
found that the components had a pre- transformation. We find HQ H185775 and the PCB and firmware are made in Japan.
determined end-use as parts and components distinguishable because the assembly in Thus, substantial manufacturing operations
of a Generation II flashlight at the time of Mexico involved multiple components from are performed in these countries. Once the
importation and did not undergo a change in various countries, including TAA-designated Vietnamese subassemblies and the Japanese-
use due to the post-importation assembly countries. origin PCB are imported into the United
process. Finally, the court did not find the In HQ 560677, CBP considered two States, these 10 subassemblies are soldered/
assembly process to be sufficiently complex different notebook computers manufactured wired together, and programmed with the
as to constitute a substantial transformation. in the United States with parts and Japanese-origin firmware. All of these
Thus, the court found that Energizer’s components from various countries. CBP processes, including the testing of the
imported components did not undergo a concluded that the foreign components used finished printer (which accounts for half of
change in name, character, or use as a result in the manufacture of the notebook the time of the printer’s manufacture), are
of the post-importation assembly of the computers lost their separate identities and concluded in just 40 minutes. The
components into a finished Generation II became an integral part of a notebook manufacturing processes of these
flashlight. Virtually all of the components of computer as a result of the operations subassemblies in the United States do not
the military Generation II flashlight, performed in the United States. We note that rise to the level of complex processes
including the most important component, the HQ 560677 specifically pertains to notebook necessary for a substantial transformation to
LED, were of Chinese origin. Thus, the court computers, which is a different product from occur. In fact, the end-use of the imported
determined that China was the correct the monochrome laser printers at issue, and and fully assembled subassemblies is already
country of origin of the finished Generation CBP has considered many other scenarios pre-determined at the time of importation.
II flashlights under the government involving the production of printers that are See Energizer at 1319. Additionally, despite
procurement provisions of the TAA. more relevant to this case. counsel’s attempt to make the manufacturing
For example, in HQ H219519, dated April processes in the United States appear to be
Monochrome Laser Printers: 3, 2013, CBP considered the country of origin more complex, upon reviewing the provided
In this case, counsel argues that the of a color printer and fax machine under materials, we find that ‘‘threading brittle
country of origin of the monochrome laser three different scenarios. In scenarios one wires through spaces into necessary ports to
printers at issue will be the United States and two, the color printer and fax machine connect various subassemblies’’ amounts to
because the printers will be assembled in a underwent the following operations in nothing more than simply feeding the wiring
process that involves: (1) complex post- Mexico: final assembly, downloading harnesses through designated areas,
importation assembly operations; (2) the firmware written in the United States, and especially considering that the subassemblies
installation of the main PCB assembly and a testing, which included making settings in question are already manufactured in a
firmware verification and download; and, (3) appropriate to the buyer’s country and the manner that allows for a relatively easy
a customized testing and inspection process. client’s specific needs. In scenario one, the downstream installation. Accordingly, the
In support of its position, counsel cites assembly took 3-4 minutes whereby the manufacturing processes that occur in the
Headquarters Ruling Letters (‘‘HQ’’) external memory drive was installed onto the United States will not subsume the
amozie on DSK30RV082PROD with NOTICES
H241146, dated May 21, 2013; HQ H185775, formatter and the cables were routed as individual subassemblies into a new and
dated December 21, 2011; and, HQ 560677, necessary. The firmware for the engine and distinct article of commerce that has a new
dated February 3, 1998. We disagree. formatter was downloaded onto the hard name, character, and use.
In HQ H241146, CBP considered the drive or solid state drive. In scenario two, the As discussed in Energizer, in cases in
country of origin of monochrome laser assembly took 7-8 minutes and involved the which the post-importation processing
printers. In that case, Chinese subassemblies assembly discussed in scenario one, plus the entails assembly, courts have considered the
were imported into the United States, where installation of the intermediate transfer belt. nature of the assembly together with the
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![12806 Federal Register / Vol. 83, No. 57 / Friday, March 23, 2018 / Notices
name, character, or use test in making a subassemblies, two of which involved HOLDING:
substantial transformation determination. See processing in Japan. All the engineering, Based on the facts provided, the imported
Ran-Paige Co., Inc. v. United States, 35 Fed. development, design, and artwork were fully assembled printer subassemblies from
Cl. 117, 121 (1996); Belcrest Linens, 741 F.2d developed in Japan. The multifunctional Japan and Vietnam will not be substantially
at 1371; Uniroyal, 3 C.I.T. at 226, 542 F. printer control unit was described as the transformed into finished monochrome laser
Supp. at 1031. The court has sometimes brain of the model. While some of the printers by the processes that take place in
compared the degree of operations in pre components were installed on the control the United States. However, the finished
versus post-importation processing to printer board in China, the flash read-only monochrome laser printers will be
evaluate whether a substantial transformation memory which included firmware developed considered a product of Japan for purposes
occurred. For example, in Nat’l Hand Tool, in Japan, was manufactured in Japan. The of U.S. Government procurement. With
the court contrasted the pre-importation other unit that involved production in Japan
respect to the Brother replacement toner
processing of cold forming and hot-forging was the process unit, that housed a drum
cartridges, the country of origin will be
and noted that it required more complicated produced in Japan. The process unit was
Japan.
functions than post-importation processing, assembled in China. The other subassemblies
Notice of this final determination will be
which included heat treatment and were assembled in China but certain key
given in the Federal Register, as required by
electroplating. 16 C.I.T. at 311; see also components of the subassemblies originated
19 C.F.R. § 177.29. Any party-at-interest other
Uniroyal, 3 C.I.T. at 224-227, 542 F.Supp. at in Japan. The final assembly was performed
than the party which requested this final
1029-31 (comparing a post-importation in Japan. Based on the totality of the
determination may request, pursuant to 19
‘‘minor manufacturing or combining process’’ circumstances discussed in this ruling, CBP
C.F.R. § 177.31, that CBP reexamine the
in which imported shoe uppers were agreed that the Jupiter II J-models were
matter anew and issue a new final
attached to outsoles with ‘‘complex considered a product of Japan).
determination. Pursuant to 19 C.F.R.
manufacturing processes’’ that occurred pre- Similar to HQ H018467, HQ W563491, and
§ 177.30, any party-at-interest may, within 30
importation when the imported uppers were HQ H020516, in this case, the main PCB
days of publication of the Federal Register
produced). In such cases, CBP has focused on assembly is the motherboard of the printers,
Notice referenced above, seek judicial review
the importance of other components to make which communicates with the PC, houses the
of this final determination before the Court
an origin determination. memory in the printer, and forms the image
of International Trade.
For example, in HQ H018467, dated printed on the page. It also includes key
January 4, 2008, CBP was asked to consider functional circuits, including mechanical Sincerely,
two manufacturing scenarios for multi- control and printing data processing. Monika R. Brenner
function printers. In one scenario, Additionally, the overall structure and each for
manufacturing took place in two countries; in functional circuit of the ASIC, the main Alice A. Kipel, Executive Director
the other, it took place in three countries. In component of PCB, will be designed in Japan Regulations and Rulings
the two-country scenario, 18 units were and manufactured by third-party suppliers in Office of Trade
manufactured in the Philippines from Japan. The firmware itself provides the [FR Doc. 2018–05964 Filed 3–22–18; 8:45 am]
components produced in various countries. control program for the printers and enables
BILLING CODE 9111–14–P
The units were sent to Japan where the the main PCB assembly to function as the
system control board, engine control board, electronic ‘‘brains’’ of the printers by
OPC drum unit, and the toner reservoir were controlling all printer functions. The main
manufactured and incorporated into the PCB assembly (consisting of approximately DEPARTMENT OF HOUSING AND
units. The control boards were programmed 1,028 components) and the firmware, URBAN DEVELOPMENT
in Japan with Japanese firmware that produced in Japan, a TAA-designated
controlled the user interface, imaging, country, account for a significant percentage [Docket No. FR–7007–N–03]
memories, and the mechanics of the of the total subassembly cost. Together, the
machines. The machines were then inspected firmware and the main PCB, which serve 60-Day Notice of Proposed Information
and adjusted as necessary. CBP found that major functions and are high in value, Collection: Pre-Purchase
the manufacturing operations in Japan constitute the essential character of the Homeownership Counseling
substantially transformed the Philippine printers. We note that in the three rulings Demonstration and Impact Evaluation
units such that Japan was the country of referenced above, the key components and
origin of the multifunctional machines. In the firmware were manufactured and AGENCY: Office of Policy Development
making the determination (and in addition to developed in the same country in which the and Research, HUD.
the finding that operations performed in final assembly took place. This is not the case ACTION: Notice.
Japan were meaningful and complex and here. However, considering that the
resulted in an article of commerce with a production of the printer occurs in three SUMMARY: The Department of Housing
new name, character and use), CBP took into countries, we find the last substantial and Urban Development (HUD) is
consideration the fact that the system control transformation to occur in Japan, given that seeking approval from the Office of
board, the engine control board, and the the essential character of the printer is made Management and Budget (OMB) for the
firmware, which were very important to the in Japan. Accordingly, we find that Japan is
functionality of the machines, were information collection described below.
the country of origin of the monochrome
manufactured in Japan. laser printers. In accordance with the Paperwork
Similarly, in HQ W563491, dated February Reduction Act, HUD is requesting
8, 2007, CBP was asked to consider a two- Replacement toner cartridges: comment from all interested parties on
country scenario where all of the Finally, counsel argues that Japan is the the proposed collection of information.
subassemblies of the multifunction machine country of origin for the Brother replacement The purpose of this notice is to allow for
were made in China, with the exception of toner cartridges. Several CBP rulings are 60 days of public comment.
the controller unit subassembly, application cited in counsel’s submission. HQ H251592,
DATES: Comments Due Date: May 22,
specific integrated circuits and firmware, dated June 24, 2014, describes an AIO
which were made in Japan. In that case, the cartridge with three main components: 1) 2018.
final assembly, testing, and the final toner powder; 2) developer unit; and, 3) ADDRESSES: Interested persons are
inspection were done in Japan. Although cleaning unit. In HQ H251592, CBP
amozie on DSK30RV082PROD with NOTICES
invited to submit comments regarding
CBP stated that the product assembly in determined that the processing in Japan
this proposal. Comments should refer to
Japan was also complex and meaningful, CBP substantially transformed the non-Japanese
focused on the origin of key components in components. We find that a similar rationale the proposal by name and/or OMB
finding that the country of origin was Japan. can be applied to Brother’s replacement Control Number and should be sent to:
See also HQ H020516, dated November 7, cartridges. Therefore, it is the opinion of this Anna P. Guido, Reports Management
2008 (CBP considered Sharp Andromeda II J office that the country of origin of the Officer, QDAM, Department of Housing
models composed of eight main replacement toner cartridges will be Japan. and Urban Development, 451 7th Street
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Document Created: 2018-11-01 08:54:17
Document Modified: 2018-11-01 08:54:17
| 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 March 19, 2018. A copy of the final determination is attached. Any party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial review of this final determination within April 23, 2018. | |
| Contact | Yuliya A. Gulis, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade, at (202) 325-0042. | |
| FR Citation | 83 FR 12803 |
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