Notice2024-13113
Notice of Issuance of Final Determination Concerning UPanelS LED Display Panels
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 14, 2024
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border Protection
Abstract
This document provides notice that U.S. Customs and Border Protection (CBP) has issued a final determination concerning the country of origin of various models of LED display panels sold under the UPanelS brand. Based upon the facts presented, CBP has concluded in the final determination that the components of the subject UPanelS devices undergo substantial transformation in Taiwan upon the manufacture of their printed circuit board assembly (PCBA) and light- emitting diode (LED) lamp assembly.
Full Text
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<title>Federal Register, Volume 89 Issue 116 (Friday, June 14, 2024)</title>
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[Federal Register Volume 89, Number 116 (Friday, June 14, 2024)]
[Notices]
[Pages 50595-50598]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13113]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning UPanelS LED
Display Panels
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 various models of LED display panels sold under
the UPanelS brand. Based upon the facts presented, CBP has concluded in
the final determination that the components of the subject UPanelS
devices undergo substantial transformation in Taiwan upon the
manufacture of their printed circuit board assembly (PCBA) and light-
emitting diode (LED) lamp assembly.
DATES: The final determination was issued on June 10, 2024. 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 July 15, 2024.
FOR FURTHER INFORMATION CONTACT: Austen Walsh, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at
<a href="/cdn-cgi/l/email-protection#b8d9cdcbccddd696d596cfd9d4cbd0f8dbdac896dcd0cb96dfd7ce"><span class="__cf_email__" data-cfemail="ef8e9a9c9b8a81c182c1988e839c87af8c8d9fc18b879cc1888099">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 10,
2024, CBP issued a final determination concerning the country of origin
of various models of LED display panels sold under the UPanelS brand
for purposes of title III of the Trade Agreements Act of 1979. This
final determination, HQ H332752, was issued at the request Unilumin USA
LLC (Unilumin), 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 has
concluded that, based upon the facts presented, the components, which
are largely sourced from China and Taiwan, are substantially
transformed in Taiwan when made into the subject UPanelS devices.
Section 177.29, CBP Regulations (19 CFR 177.29), provides that
notice of final determinations shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial
review of a final determination within 30 days of publication of such
determination in the Federal Register.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H332752
June 10, 2024
OT:RR:CTF:VS H332752 AMW
CATEGORY: Origin
Ms. Angelica Tsakiridis
Managing Director--Global Trade Advisory
Deloitte LLP
555 Mission Street, Suite 1400
San Francisco, CA 94105
RE: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country
of Origin of UPanelS Products
Dear Ms. Tsakiridis:
This is in response to your request, dated September 8, 2021, on
behalf of your client, Unilumin USA LLC (``Unilumin''), for a final
determination concerning the country of origin of the ``UPanelS''
product line of light-emitting diode (``LED'') display panels,
pursuant to Title III of the Trade Agreements Act of 1979 (``TAA''),
as amended (19 U.S.C. 2511 et seq.), and subpart B of Part 177, U.S.
Customs and Border Protection (``CBP'') Regulations (19 CFR 177.21,
et seq.). Your request, submitted as an electronic ruling request,
was forwarded to this office from the National Commodity Specialist
Division. Unilumin is a party-at-interest within the meaning of 19
CFR 177.22(d)(1) and 177.23(a) and is therefore entitled to request
this final determination.
[[Page 50596]]
Facts
Unilumin imports various models of ``high-performance [LED]
display[s]'' sold under the UPanelS product line. The UPanelS
product line consists of a series of display units capable of
producing high-definition video or photographic images
differentiated primarily by pixel pitch. The UPanelS devices are
used in commercial and educational settings as signage or digital
displays, including in large format settings such as concert
backdrops or film sets.\1\ UPanelS devices are capable of being
affixed directly into a wall mount, displayed free standing, or hung
with hanging beams.\2\
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\1\ See ``What makes a successful interactive LED wall,''
available at <a href="https://www.unilumin-usa.com/led-101/what-makes-a-successful-interactive-led-wall/">https://www.unilumin-usa.com/led-101/what-makes-a-successful-interactive-led-wall/</a> (accessed Jan. 8, 2024).
\2\ UPanelS Product guide, available at <a href="https://www.unilumin-usa.com/wp-content/uploads/2020/02/upanels-1.pdf">https://www.unilumin-usa.com/wp-content/uploads/2020/02/upanels-1.pdf</a> (accessed Jan. 8,
2024).
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Each UPanelS consists of two major sub-assemblies: a ``module
board'' and a ``cabinet housing.'' The module board drives and
controls each LED unit, forming images for display. The cabinet
encases the device and provides the power supply function.
The module board is assembled in Taiwan and is comprised of two
subassemblies that are also assembled in Taiwan: (1) the main
printed circuit board assembly (``PCBA'') with LED lamps; and (2)
the HUB board and receiver card. The main PCBA with LED lamps
consists of the main PCBA, which regulates the flow of power to the
LED lamps; and the LED lamps (originating in Taiwan), which light to
form viewable images. The HUB board and receiver cards assembly
consists of the HUB board, a separate PCBA printed in China that
relays information between the receiver card and module board; a
receiver card (originating in either Taiwan or Romania), which reads
programmed command signals regulating the brightness and color of
the LEDs and sequencing the display; and the indicator light board
(originating in Taiwan), which displays power supply indicators to
the LED lamps.
Assembly of the main PCBA with LED lamps occurs in Taiwan over
approximately 12 steps, which involve the creation of the PCBA via
surface mount technology (``SMT'') and the placement of LED lamps
onto the non-printed side of the PCBA:
1. Mount handling fixture to the integrated circuit (``IC'')
side of a Chinese-origin bare printed circuit board (``PCB'');
2. Print components onto the PCB;
3. Inspect solder paste;
4. Mount remaining miscellaneous components onto PCB;
5. Cure the board in reflow oven;
6. Remove fixture(s) mounted to the IC side of the PCB in step
one and mount a fixture to the LED side;
7. Print onto the reverse side of the PCB;
8. Inspect solder paste;
9. Mount components;
10. Cure the board in a reflow oven;
11. Apply conformal coating on PCB;
12. Install gasket onto PCB.
Next, assembly of the HUB board and receiver card occurs in the
following steps:
1. Paste installation stickers to a lower/bottom shell (the
``turtle shell'') and blacken the bottom with a pen;
2. Insert the receiver card into the HUB board and place the HUB
board into the bottom of the turtle shell;
3. Divide the indicator light board into several smaller boards,
affix the indicator lights, and connect them with the module board
adapter;
4. Paste and scan serial number; and
5. Install the HUB board assembly on the turtle shell and check
for flatness and gaps.
The fully assembled PCBA with LED lamps is then combined with
the HUB board and receiver card assembly to form the completed
module board. Once combined, the LED lamps can light and display
video or photographic images.
The cabinet is the second major subassembly of the completed
UPanelS. The cabinet houses the module board and provides the power
supply to the finished device. The cabinet also enables the
combination of multiple module boards to create larger-format arrays
(e.g., 4x4 or 2x1 configurations). The cabinet is comprised almost
entirely of Chinese-origin components, and contains the following
sub-assemblies: power supply adapter board, power supply, motor
assembly, power signal combination connector, and wall controller.
The cabinet is assembled in Taiwan in approximately six steps:
1. Affix the power cables to the cabinet;
2. Affix the lacing strip, three core cables, and ground cables
to the cabinet;
3. Affix the adapter board to the cabinet;
4. Assemble left and right-side motor and assemble cables with
electric screwdriver;
5. Connect internet cables to the power supply adapter board;
and
6. Fit the insulating gasket on the power supply cover and affix
the power supply cover.
Once the module board and cabinet are completed, they are
shipped to China where they are combined into a complete UPanelS
unit and tested for functionality. Afterwards, the UPanelS is
disassembled and separately packaged for shipment to the United
States.
Each UPanelS will be imported into the United States in one of
two ways: (1) the UPanelS's finished module board and cabinet are
imported as two separately packaged, unique product numbers entered
in the same shipment; or (2) the module board and cabinet are
entered in the same shipment as separately packaged products along
with a separate ``wall controller unit.'' \3\ You state that the
UpanelS is imported in an unassembled condition because the finished
module board and cabinet are delicate and that shipping the
components in a single box may damage the panels. To aid
installation in the United States, each module board or cabinet will
be assigned a serial number or code allowing for the recombination
of each module board with its corresponding cabinet.
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\3\ According to the request, the wall controller unit is a
third sub-module that, when connected to the UPanelS, receives data
signals from a source and translates and transmits those signals to
the receiver card component of the module board. When fully
assembled, the UPanelS connects to the wall controller via a
category 5 cable. The wall controller unit will originate in
Germany, Taiwan, or the United States.
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Issue
What is the country of origin of the Unilumin UPanelS 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 CFR 177.21-177.31, which
implements Title III of the TAA, as amended (19 U.S.C. 2511-2518).
CBP's authority to issue advisory rulings and final
determinations is set forth in 19 U.S.C. 2515(b)(1), which states:
For the purposes of this subchapter, the Secretary of the
Treasury shall provide for the prompt issuance of advisory rulings
and final determinations on whether, under section 2518(4)(B) of
this title, an article is or would be a product of a foreign country
or instrumentality designated pursuant to section 2511(b) of this
title.
Emphasis added.
The Secretary of the Treasury's authority mentioned above, along
with other customs revenue functions, are delegated to CBP in the
Appendix to 19 CFR part 0--Treasury Department Order No. 100-16, 68
FR 28,322 (May 23, 2003).
The rule of origin set forth under 19 U.S.C. 2518(4)(B) states:
An article is a product of a country or instrumentality only if
(i) it is wholly the growth, product, or manufacture of that country
or instrumentality, or (ii) in the case of an article which consists
in whole or in part of materials from another country or
instrumentality, it has been substantially transformed into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.
See also 19 CFR 177.22(a).
In rendering advisory rulings and final determinations for
purposes of U.S. Government procurement, CBP applies the provisions
of subpart B of Part 177 consistent with the Federal Procurement
Regulation (``FAR''). See 19 CFR 177.21. In this regard, CBP
recognizes that the 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. See 48 CFR 25.403(c)(1).
The FAR, 48 CFR 25.003, defines ``designated country end
product'' as:
a WTO GPA [World Trade Organization Government Procurement
Agreement] country end product, an FTA [Free Trade Agreement]
country end product, a least developed country end product, or a
Caribbean Basin country end product.
Section 25.003 defines ``WTO GPA country end product'' as an
article that:
(1) Is wholly the growth, product, or manufacture of a WTO GPA
country; or
(2) In the case of an article that consists in whole or in part
of materials from another
[[Page 50597]]
country, has been substantially transformed in a WTO GPA country
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. The term refers to a product offered for purchase
under a supply contract, but for purposes of calculating the value
of the end product includes services (except transportation
services) incidental to the article, provided that the value of
those incidental services does not exceed that of the article
itself.
Once again, we note that the subject UPanelS devices are
assembled in Taiwan, a TAA-designated country, with components
sourced from TAA-designated countries (e.g., Taiwan, Japan) and non-
TAA-designated countries (e.g., China).
In determining whether a substantial transformation occurs, CBP
considers the totality of the circumstances and makes such
determinations on a case-by-case basis. The country of origin of the
item's components, extent of the processing that occurs within a
country, and whether such processing renders a product with a new
name, character, and use are primary considerations in such cases.
Additionally, CBP considers factors such as the resources expended
on product design and development, the extent and nature of post-
assembly inspection and testing procedures, and worker skill
required during the actual manufacturing process when determining
whether a substantial transformation has occurred. No one factor is
determinative.
Assembly operations that are minimal or simple, as opposed to
complex or meaningful, will generally not result in a substantial
transformation. Factors which may be relevant in this evaluation
include the nature of the operation (including the number of
components assembled), the number of different operations involved,
and whether a significant period of time, skill, detail, and quality
control are necessary for the assembly operation. See C.S.D. 80-111,
C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D.
90-97. If the manufacturing or combining process is a minor one,
which leaves the identity of the article intact, a substantial
transformation has not occurred. See Uniroyal, Inc. v. United
States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022
(Fed. Cir. 1983) (imported shoe uppers added to an outer sole in the
United States were the ``very essence of the finished shoe'' and the
character of the product remained unchanged and did not undergo
substantial transformation in the United States).
The Court of International Trade (``CIT'') more recently
interpreted the meaning of ``substantial transformation'' in
Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308
(2016). Energizer involved the determination of the country of
origin of a flashlight, referred to as the Generation II flashlight.
All the components of the flashlight were of Chinese origin, except
for a white LED and a hydrogen getter. The components were imported
into the United States and assembled into the finished Generation II
flashlight. The Energizer court reviewed the ``name, character and
use'' test utilized in determining whether a substantial
transformation had occurred and noted, citing Uniroyal, Inc., 3
C.I.T. at 226, 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.
In reaching its decision, the Energizer 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 predetermined 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 into a finished Generation
II flashlight. Virtually all of the components of the Generation II
flashlight, including the most important component, the LED, were of
Chinese origin. Accordingly, the court determined that China was the
correct country of origin of the Generation II flashlights for
purposes of government procurement.
The CIT has also looked at the character of an article to
determine whether its identity has been substantially transformed
through assembly or processing. For example, in Uniroyal, Inc. v.
United States, 3 C.I.T. at 225, the court held that imported shoe
uppers added to an outer sole in the United States were the ``very
essence of the finished shoe'' and thus the character of the product
remained unchanged and did not undergo substantial transformation in
the United States. Similarly, in National Juice Products Association
v. United States, 10 C.I.T. 48, 61, 628 F. Supp. 978, 991 (1986),
the court held that imported orange juice concentrate ``imparts the
essential character'' to the completed orange juice and thus was not
substantially transformed into a product of the United States.
As CBP examines the totality of circumstances in its substantial
transformation analysis, considerations such as the origin of a
light source or a PCBA, while not determinative, may be considered
together with the nature of the overall assembly operations. For
example, in Headquarters Ruling Letter (``HQ'') H304910, dated April
21, 2020, CBP determined the country of origin of three models of
LED automotive lamps to be Mexico, the country in which the PCBA and
LED lights were assembled together. For all three models, CBP
determined that the assembly of the Japanese-origin LEDs and the
Mexican-origin PCBAs in Mexico resulted in a substantial
transformation. CBP determined that the SMT and wave soldering
processes incorporated a large number of discrete parts onto a
printed circuit board, which was a sufficiently ``complex and
meaningful'' operation so as to result in a substantial
transformation of the parts making up the product's PCBA. In that
case, LEDs were one of the discrete components incorporated into the
PCBA. See also, HQ H331515, dated December 6, 2023 (citing HQ
H304910 in determining the country of origin of a refrigerator shelf
light, which included a PCBA and an LED light system, to be Mexico,
the country of origin for the light's PCBA); and C.S.D. 85-25, 19
Cust. Bull. 544 (1985) (finding assembly of more than 50 components
onto PCB results in substantial transformation).
CBP has also determined the origin of image or video-producing
devices to be the country in which the underlying PCBA is produced.
In HQ H218360, dated September 11, 2013, CBP considered the origin
of devices used to ``capture motion picture images and sound and
send them digitally . . . to a similar unit at a different location.
. . .'' In that matter, we found that the origin of the devices was
the country in which the underlying ``video processing electronic
circuit board'' and ``network filter electronic circuit board'' were
produced because these items imparted the character of the devices
as a video conferencing server. See also HQ H114395, dated May 18,
2011 (determining the country of origin of a pocket projector to be
the location of assembly of the light engine module and PCBA).
In the present matter, and in accordance with HQ H304910 and
H218360, the assembly of the main PCBA in Taiwan results in a
substantial transformation. We find that the SMT and curing
processes incorporate a large number of discrete component parts
onto a PCB, which is a sufficiently complex and meaningful operation
so as to result in a substantial transformation of the parts making
up the PCBA. Similar to HQ H331515, a variety of electronic
components are added to the raw PCB via SMT in Taiwan to create the
subject PCBAs. This includes the attachment of the Taiwanese-origin
LED lamps. Of particular importance, we also note that it is the
PCBA that enables the device to distribute power to the LED lamps
and therefore imparts the character of the subject device. In
addition, the Taiwanese-origin LED lamps also perform the important
function of displaying the images to be viewed. Furthermore, we find
that the processing in China, which consists of ``installing'' and
``attaching'' the subassemblies together for testing, is not
sufficiently complex and meaningful to result in a substantial
transformation. Based on the information provided, we therefore
conclude that the processing in Taiwan results in a product with a
new name, character, and use, i.e., an LED device capable of forming
and displaying images.
Finally, as outlined above, after final assembly in China, each
UPanelS unit will be separated into the module board, cabinet, and
sometimes a wall controller unit for
[[Page 50598]]
shipment to the United States. Here, we note that, although the
devices will be disassembled for shipment, the components will
nevertheless represent a single item of commerce if shipped
together. See HQ H100055, dated May 28, 2010 (finding a medical
patient lift imported unassembled to be a single unit for country of
origin purposes when shipped together).
Based on the analysis above, we find that the country of origin
of the subject UPanelS devices is Taiwan and, therefore, the devices
would be the product of a foreign country or instrumentality
designated pursuant to 19 U.S.C. 2511(b)(1).
Holding
Based on the facts and analysis set forth above, the country of
origin of the instant UPanelS will be Taiwan.
Notice of this final determination will be given in the Federal
Register, as required by 19 CFR 177.29. Any party-at-interest other
than the party which requested this final determination may request,
pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and
issue a new final determination. Pursuant to 19 CFR 177.30, any
party-at-interest may, within 30 days of publication of the Federal
Register Notice referenced above, seek judicial review of this final
determination before the U.S. Court of International Trade.
Sincerely,
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
[FR Doc. 2024-13113 Filed 6-13-24; 8:45 am]
BILLING CODE 9111-14-P
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