Notice2025-05733
Notice of Issuance of Final Determination Concerning Multifunction Digital Printers
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
April 3, 2025
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 multifunction digital printers. Based upon the facts presented, CBP has concluded in the final determination that the components of the subject multifunction digital printers undergo a substantial transformation in Mexico when made into the final multifunction digital printer units.
Full Text
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<title>Federal Register, Volume 90 Issue 63 (Thursday, April 3, 2025)</title>
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[Federal Register Volume 90, Number 63 (Thursday, April 3, 2025)]
[Notices]
[Pages 14656-14659]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-05733]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning
Multifunction Digital Printers
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 multifunction digital printers. Based upon the
facts presented, CBP has concluded in the final determination that the
components of the subject multifunction digital printers undergo a
substantial transformation in Mexico when made into the final
multifunction digital printer units.
DATES: The final determination was issued on January 17, 2025. A copy
of the final determination is attached. Any party-at-interest, as
defined in 19 CFR 177.22(d), may seek judicial review of this final
determination within May 5, 2025.
FOR FURTHER INFORMATION CONTACT: Reema Bogin, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at
<a href="/cdn-cgi/l/email-protection#b7c5d2d2dad699d5d8d0ded9f7d4d5c799d3dfc499d0d8c1"><span class="__cf_email__" data-cfemail="a1d3c4c4ccc08fc3cec6c8cfe1c2c3d18fc5c9d28fc6ced7">[email protected]</span></a>, or (202) 325-7703.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on January 17,
2025, CBP issued a final determination concerning the country of origin
of multifunction digital printers for purposes of title III of the
Trade Agreements Act of 1979. This final determination, HQ H332745, was
issued at the request of Konica Minolta Business Solutions U.S.A., Inc.
(``Konica Minolta''), 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 are
substantially transformed in Mexico when made into the subject
multifunction digital printers.
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 H332745
January 17, 2025
OT:RR:CTF:VS H332745 RRB
Category: Origin
Daniel E. Waltz, Squire Patton Boggs (US) LLP, 2550 M Street NW,
Washington, DC 20037
Re: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Konica
Minolta Business Solutions U.S.A., Inc.; Country of Origin of
Multifunction Digital Printers; Substantial Transformation
Dear Mr. Waltz:
This is in response to your request, dated April 27, 2023, on
behalf of your client,
[[Page 14657]]
Konica Minolta Business Solutions U.S.A., Inc. (``Konica Minolta''),
for a final determination concerning the country of origin of its
Minerva SSBK series multifunction digital printers (``MFPs''),
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.). Konica Minolta is a party-at-interest within the meaning
of 19 CFR 177.22(d)(1) and Sec. 177.23(a) and is therefore entitled
to request this final determination.
Facts
Konica Minolta plans to sell its Minerva SSBK MFPs to customers
in the United States, including the U.S. Government. The Minerva
SSBK MFPs are multifunction digital printers intended for use in
mid-to-large size offices and light Centralized Reprographic
Departments (``CRDs'') as high-speed printers, black-and-white
copiers, scanners, and fax machines. According to counsel for Konica
Minolta, most of the product design and development of the Minerva
SSBK series MFPs is conducted in Japan, and several of its most
important and complex components and subassemblies will be
manufactured either in Mexico or China using a number of Japanese,
Thai, or Vietnamese parts. The Minerva SSBK MFPs will initially be
assembled in China. Counsel for Konica Minolta explains that several
assemblies of the MFPs, including more complicated or advanced
assemblies, will be removed before the resulting frame is shipped to
Mexico for final assembly, as well as where other Mexican-made
components and assemblies will be incorporated.
Assembly Process in China
In China, the following subassemblies will be assembled within
the Minerva SSBK MFP's frame:
1. The Print Head will be produced in China from the following
subcomponents:
<bullet> a G1 lens manufactured in Japan;
<bullet> a G2 lens manufactured in China;
<bullet> a polygonal motor manufactured in China; and
<bullet> a laser diode manufactured in Thailand.
The print head operates by reflecting a laser beam off of the
lenses and onto the polygonal mirrors to produce a copied image on
the photoconductor (``OPC'') drum. According to counsel for Konica
Minolta, while the G1 lens is among the print head's most
technically sophisticated parts, the cost per lens is low because
they are produced in such large quantities. The print head will be
assembled, and then installed into a frame in China to ensure proper
alignment, but it will then be removed from the frame and shipped
separately to Mexico for final installation.
2. The Drum Unit incorporates important Japanese components,
including a Japanese OPC drum, which receives laser light that is
reflected off the polygonal mirrors. Toner is deposited on the OPC
drum and then transferred to the image transfer belt to create an
image, which is then transferred from the belt onto paper.
3. The Developing Unit also incorporates important Japanese
components. It holds the printer's developing material. The
developing material consists of toner and carrier and is made in
Japan. When mixed with the carrier, the toner becomes negatively
charged and is attracted to the latent electrostatic image on the
OPC drum, creating a visible developed image.
4. The 2nd Image Transfer Roller Unit will be manufactured in
China. It supports the image transfer belt unit. Following testing
for quality checks in China, the 2nd image transfer roller unit will
be removed from the MFP frame and shipped to Mexico. A new version
of the 2nd image transfer roller unit will be shipped from China to
Mexico for final installation into the MFP frame.
5. Additional units that are assembled within the MFP frame in
China include the toner cartridge, which is manufactured in Japan,
and the sub hopper unit, waste toner box, and copyholder, which are
manufactured in China. Each of these units will be removed from the
frame in China after initial testing for quality checks is complete.
Replacement units known as ``jig units'' will be attached to the
frame before it is shipped to Mexico for final assembly of the MFPs.
The jig units have the same shape as the original units but cannot
be attached to the finished product. Instead, during production in
Mexico, the jig unit is used as an exchange device to prevent the
sub hopper unit, toner cartridge unit, waste toner box and
copyholder inside the frame from getting dirty. Like the original
units, the jig units will be manufactured in China. After final
assembly in Mexico is complete, the jig units are replaced with the
original units that will be part of the final MFP.\1\
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\1\ According to counsel for Konica Minolta, the toner cartridge
and the copyholder are not part of the main body of the final MFP
but are sold as an option.
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Assembly Process in Mexico
When shipped from China to Mexico after initial testing is
complete in China, the printer's frame houses several subassemblies,
but does not include the MFP board, print head, image transfer belt
unit, fusing unit, and the 2nd image transfer roller unit, which
have been removed, along with three jig units--the sub hopper unit
and toner cartridge, the waste toner box, and the copyholder. It
also does not include the 1500 paper feed unit. New versions of all
of these subassemblies except for the image transfer belt unit, the
fusing unit, and 1500 paper feed unit will be produced in China and
shipped from China to Mexico for final installation. The image
transfer belt unit, the fusing unit, and 1500 paper feed unit are
not shipped to Mexico because new, Mexican-made versions of these
units are already in Mexico for final installation into the Minerva
SSBK series MFPs.
6. The MFP Board will be manufactured in Mexico. Counsel for
Konica Minolta states that the MFP board constitutes the ''brain''
of the digital printer, integrating its printer and copier
functions. Konica Minolta's proprietary software was majority
developed and coded in Japan. The software is loaded onto the MFP
board, the solid state drive, and the mechanical controller board in
Mexico. The MFP board converts an electrical signal into a digital
signal and sends the signal to the print head to create an image. It
will be installed into the Minerva SSBK MFPs in Mexico. The MFP
board consists of the following subcomponents:
<bullet> CPU Board from China;
<bullet> Base Board from China; and
<bullet> Solid State Drive from Taiwan.
7. The Image Transfer Belt Unit will be manufactured in Mexico,
and includes the following subcomponents:
<bullet> an intermediate transfer belt manufactured in Japan,
which accepts a single image created by the OPC drum to create the
image that is then transferred onto paper;
<bullet> a transfer frame manufactured in China;
<bullet> a transfer roller manufactured in China; and
<bullet> a brush manufactured in China.
The image transfer belt unit is installed into the Minerva SSBK
MFP frame in China to perform initial quality checks, but it is
removed before the frame is shipped to Mexico. Counsel for Konica
Minolta states that the image transfer belt unit finally installed
in Mexico has never left Mexico.
8. The Fusing Unit will be manufactured in Mexico, and includes
the following subcomponents:
<bullet> a fusing belt manufactured in China;
<bullet> a pressure roller manufactured in China;
<bullet> a heating roller manufactured in China; and
<bullet> a heater lamp manufactured in China.
The fusing unit will be installed into a Minerva SSBK MFP frame
in China to perform initial quality checks, but it will be removed
before the frame is shipped to Mexico. Counsel for Konica Minolta
states that the fusing unit finally installed in Mexico has never
left Mexico.
9. The 1500 Paper Feed Unit will be manufactured in Mexico. It
will be installed into a Minerva SSBK MFP frame in China to perform
initial quality checks, but it will be removed before the frame is
shipped to Mexico. Counsel for Konica Minolta states that the 1500
paper feed unit finally installed in Mexico has never left Mexico.
After final installation of the subassemblies onto the final
MFP, all software is loaded onto the MFP board and the solid state
drive in Mexico. The finished printer is then tested, adjusted, and
calibrated in Mexico before shipment to the United States. Counsel
for Konica Minolta states that the tests and inspections performed
in Mexico are more complex and precise than those conducted in
China.
Issue
What is the country of origin of the Minerva SSBK MFPs 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 purpose 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 et seq., which
[[Page 14658]]
implements Title III, Trade Agreements Act of 1979, as amended (19
U.S.C. 2511-2518).
CBP's authority to issue advisory rulings and final
determinations stems from 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 the Secretary
of Homeland Security via Treasury Department Order (TO) 100-20
``Delegation of Customs revenue functions to Homeland Security,''
dated October 30, 2024, and are subject to further delegations to
CBP (see also 19 CFR part 177, subpart B).
The rule of origin set forth in 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 Acquisition
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).
Section 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 ``Free Trade Agreement country end
product'' as an article that:
(1) Is wholly the growth, product, or manufacture of a Free
Trade Agreement (FTA) country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in an FTA 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.
``Free Trade Agreement country'' means Australia, Bahrain,
Canada, Chile, Colombia, Costa Rica, Dominican Republic, El
Salvador, Guatemala, Honduras, Korea (Republic of), Mexico, Morocco,
Nicaragua, Oman, Panama, Peru, or Singapore. See 48 CFR 25.003.
Thus, Mexico is an FTA country for purposes of the FAR.
To determine whether the combining of parts or materials
constitutes a substantial transformation, the determinative issue is
the extent of operations performed and whether the parts lose their
identity and become an integral part of the new article. Belcrest
Linens v. United States, 573 F. Supp. 1149 (Ct. Int'l Trade 1983),
aff'd, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are
minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. See C.S.D. 80-
111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and
C.S.D. 90-97. CBP will make these decisions on a case-by-case basis,
considering the totality of the circumstances. 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. Additionally, facts such as resources
expended on product design and development, extent and nature of
post-assembly inspection procedures, and worker skill required
during the actual manufacturing process will be considered when
analyzing whether a substantial transformation has occurred;
however, no one such factor is determinative.
In various rulings concerning similar merchandise, CBP has held
that complex and meaningful assembly operations involving a large
number of components will generally result in a substantial
transformation. In Headquarters Ruling Letter (``HQ'') 562936, dated
March 17, 2004, CBP addressed the country of origin of certain MFPs
assembled in Japan of various Japanese- and Chinese-origin parts.
CBP determined that the MFP was a product of Japan based on the fact
that a ``substantial portion of the printer's individual components
and subassemblies [were] of Japanese origin.'' Furthermore, CBP
noted that some of the Japanese components and subassemblies were
essential parts of the finished article, and other Japanese parts,
including the reader scanner unit and the control panel unit, were
critical to the production of the printer. Finally, CBP noted that
the Japanese processing operations were complex and meaningful, that
required ``the assembly of a large number of components, and
render[ed] a new and distinct article of commerce that possesse[d] a
new name, character, and use.''
In HQ W563491, dated February 8, 2007, CBP addressed a two-
country scenario where all of the subassemblies of the multifunction
printer were made in China, with the exception of the controller
unit subassembly, application-specific integrated circuits, and
firmware, which were made in Japan. Final assembly of the
multifunction printer, testing and final inspection were also done
in Japan. In that ruling, CBP determined that the multifunction
printers were a product of Japan based on the fact that although
several of the subassemblies were assembled in China, enough of the
Japanese subassemblies and individual components served major
functions and were high in value, in particular, the transfer belt,
control box unit, application-specific integrated circuits, charged
couple device, and laser diodes. Further, CBP found that the testing
and adjustments performed in Japan were technical and complex, and
the assembly operations that occurred in Japan were sufficiently
complex and meaningful. Thus, through the product assembly and
testing and adjustment operations, the individual components and
subassemblies of Japanese and foreign-origin were subsumed into a
new and distinct article of commerce that had a new name, character,
and use.
In HQ H018467, dated January 4, 2008, CBP considered two
manufacturing scenarios for multifunctional printers. In one
scenario, manufacturing took place in two countries. In the other
scenario, manufacturing 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
Philippines units such that it was determined 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 found
it very significant 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.
In HQ H025106, dated June 11, 2008, CBP addressed the country of
origin of certain photocopying machines, which had photocopying,
printing, faxing, and scanning functions. The machines were
comprised of a scanning unit, controller unit subassembly, laser
scanning unit, photoconductor unit, developer unit, transfer unit,
and fusing unit. Three of these components were assembled into the
machine's frame in China, and the rest were assembled into the frame
in Japan, where the machines were completed. CBP noted that though
the developer unit and transfer unit were assembled in China, enough
of the subassemblies and individual components (e.g., the transfer
belt and photoconductor unit, among others) were from Japan, with
the photoconductor being made of entirely Japanese parts. It also
noted that though the developer unit would be assembled in China,
two of the unit's key components were from Japan; and while the
transfer unit would be partially assembled in China, the transfer
belt was from Japan. CBP also noted that there were a large variety
of adjustments that were made to the subassemblies in Japan, using
advanced equipment and firmware. As a result, CBP held that the
country of origin of the machines was Japan because the Japanese and
foreign origin parts were substantially transformed into the
machines through the product assembly that took place in Japan.
[[Page 14659]]
It is Konica Minolta's position that the country of origin of
the Minerva SSBK MFPs will be Mexico, where the MFPs are
substantially transformed upon final assembly involving what counsel
describes as the skillful integration of several critical
components, followed by numerous distinct physical and electronic
testing, adjustment, and calibration procedures.
Before proceeding with our analysis, we note that CBP issued a
final determination to Konica Minolta in HQ H263561, dated March 23,
2015, concerning the proposed manufacturing process of the bizhub
C3850FS MFPs. There, the assembly process of the bizhub MFPs began
in Thailand and finished in Japan, utilizing components from several
countries. Specifically, four subassemblies--the print head, optical
lens, charge coupled device board, and mechanical control board--
were to be assembled into and permanently integrated within the
MFP's frame in Thailand, while six subassemblies would be assembled
and tested in Thailand, removed, and ultimately assembled into the
final MFP frame in Japan for final testing--the latent image unit,
image transfer belt unit, 2nd image transfer roller unit, fusing
unit, hard disk drive, and power supply unit. Additionally, the MFP
board was to be manufactured in Japan, installed with Japanese-
developed software in Japan, and assembled into the final MFP in
Japan. There, CBP held that the country of origin of the bizhub MFPs
was Japan.
Based on the facts presented in the instant matter, we note that
although the assembly of the Minerva SSBK MFP will take place in
Mexico and China, there are also operations that contribute to this
assembly that will take place in Japan. Thus, where no one country
imparts the dominant portion of the work conducted, we will employ a
totality of the circumstances approach in determining the country of
origin of the finished Minerva SSBK MFPs. First, we note that all
but two of the subassemblies will be assembled into and permanently
installed into the MFPs in Mexico; only the developing unit and drum
unit, both manufactured in China, will be assembled and permanently
installed into the frame in China. Although the drum unit and
developing unit are assembled and permanently installed into the
frame in China, both of these subassemblies incorporate important
Japanese subcomponents, including the OPC drum, toner and carrier.
While the print head unit and 2nd image transfer roller unit will be
assembled and installed into the frame in China, they will be
removed from the frame following initial testing and shipped
separately to Mexico for final assembly. Less critical subassemblies
manufactured in China, including the sub hopper unit and waste toner
box, are assembled onto the final product in Mexico following
removal of the jig units.\2\ More importantly, not only are some of
the most critical subassemblies of the Minerva SSBK MFPs permanently
integrated within the MFPs in Mexico, but they are also manufactured
there. While the MFP board, i.e., the ``brain'' of the Minerva SSBK
MFP, consists of subcomponents from various countries, its
proprietary software that was majority developed and coded in Japan
is loaded onto the MFP board in Mexico where that subassembly is
also manufactured. In addition to the MFP board, not only are the
image transfer belt unit, the fusing unit, and the 1500 paper feed
unit manufactured in Mexico, but the versions that are integrated
into the final MFP in Mexico have never left Mexico.
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\2\ The jig units manufactured in China are not part of the
final MFP. The toner cartridge manufactured in Japan and the
copyholder manufactured in China are not part of the main body of
the final MFP and are sold as an option.
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Compared to the Konica Minolta bizhub MFPs in HQ H263561, where
four of the major subassemblies were permanently installed into the
MFP frame when shipped from Thailand to Japan, only two major
subassemblies will be permanently installed into the Minerva SSBK
MFP frame in the instant matter when shipped from China to Mexico.
In HQ H263561, CBP found that although several of the subassemblies
were assembled and installed onto the frame in Thailand, those
subassemblies included important components of Japanese origin.
Here, more of the subassemblies are either finally integrated into
the MFP in Mexico or are both manufactured in Mexico and finally
integrated into the MFP in Mexico. Unlike in HQ H263561, four
additional subassemblies--namely, the MFP board, the fusing unit,
the image transfer belt unit, and the 1500 paper feed unit--are
manufactured in Mexico. Moreover, final assembly in Mexico includes
loading Konica Minolta's complex proprietary software onto the MFP
board and other components in Mexico, along with numerous distinct
physical and electronic testing, adjustment, and calibration
procedures to ensure each machine's proper operation. Through final
assembly of all the subassemblies onto the MFP--including the four
subassemblies that will be manufactured in Mexico--as well as the
testing and adjustment operations, the individual subassemblies and
subcomponents of Mexican and foreign origin will be subsumed into a
new and distinct article of commerce that has a new name, character,
and use. Accordingly, under the totality of the circumstances, we
find that the country of origin of the Minerva SSBK MFP will be
Mexico for purposes of U.S. Government procurement.
Holding
Based on the facts and analysis set forth above, the country of
origin of the Minerva SSBK MFP will be considered Mexico for
purposes of U.S. Government procurement.
Notice of this final determination will be given in the Federal
Register, as required by 19 CFR 177.29. Any party-at-interest other
than the party which requested this final determination may request,
pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and
issue a new final determination. Pursuant to 19 CFR 177.30, any
party-at-interest may, within 30 days of publication of the Federal
Register Notice referenced above, seek judicial review of this final
determination before the U.S. Court of International Trade.
Sincerely,
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
[FR Doc. 2025-05733 Filed 4-2-25; 8:45 am]
BILLING CODE 9111-14-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.