Notice2025-17123
Notice of Issuance of Final Determination Concerning FLY Server
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
September 8, 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 the FLY Server. Based upon the facts presented, CBP has concluded that the last substantial transformation of the FLY Server occurs in the United States.
Full Text
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<title>Federal Register, Volume 90 Issue 171 (Monday, September 8, 2025)</title>
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[Federal Register Volume 90, Number 171 (Monday, September 8, 2025)]
[Notices]
[Pages 43195-43196]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-17123]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning FLY Server
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 the FLY Server. Based upon the facts presented,
CBP has concluded that the last substantial transformation of the FLY
Server occurs in the United States.
DATES: The final determination was issued on August 27, 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 no later than October 8, 2025.
FOR FURTHER INFORMATION CONTACT: Anna Hedstrom, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at (202)
325-0227.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on August 27,
2025, CBP issued a final determination concerning the country of origin
of the FLY Server for purposes of Title III of the Trade Agreements Act
of 1979. This final determination, Headquarters Ruling Letter (HQ)
H349776, was issued at the request of AvePoint Public Sector, Inc.
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
the last substantial transformation of the FLY Server occurs in the
United States. The final determination also finds that the FLY Server
is exempt from the country of origin marking requirements of 19 U.S.C.
1304.
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.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
[GRAPHIC] [TIFF OMITTED] TN08SE25.000
HQ H349776
August 27, 2025
OT:RR:CTF:VS H349776 ACH
Category: Origin
Hilary Cooper, AvePoint Public Sector, Inc., 2101 Wilson Blvd.,
Arlington, VA 22201
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 FLY Server
Dear Ms. Cooper:
This is in response to your March 10, 2025 request, on behalf of
AvePoint Public Sector, Inc. (``AvePoint''), for a final
determination concerning the country of origin of the FLY Server,
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.). AvePoint 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.
Facts
AvePoint manufactures the FLY Server, an application for
Microsoft SharePoint and Microsoft 365. SharePoint and Microsoft 365
are a multipurpose set of web technologies backed by a common
technical infrastructure that is used to provide intranet portals,
document and file management, collaboration, social networks,
extranets, websites, enterprise search, and business intelligence.
They also have system integration, process integration, and workflow
automation capabilities.
The FLY Server product simplifies the migration of content from
legacy systems into SharePoint and/or Microsoft 365. The FLY Server
has a browser-based interface and a fully distributed architecture
that offers data transfer capabilities into SharePoint and Microsoft
365. Its migration sources can be executed separately, but they
function within a unified platform and are provided as an integrated
package.
The development process is as follows:
(1) Research: A list of ideas and potential features to be
included in the software is compiled. A product roadmap is
developed, and test cases are written to govern and ensure that all
the requirements of the application and software design are met.
Twenty percent of total product development hours is allocated to
this step (18 percent of which is performed in the United States and
two percent in China).
(2) Development of Graphic User Interface (``GUI''): A prototype
GUI based on designs created in Step 1 is developed and tested. Ten
percent of total product development hours is allocated to this
step, all of which is performed in the United States.
(3) Development/Writing of Software Specifications and
Architecture: The chief architects create a detailed software design
in order to modularize the software so that its development can be
easily distributed and managed by different development teams. Ten
percent of total product development hours is allocated to this
step, all of which is performed in the United States.
(4) Programming of Source Code: Software modules are distributed
to different development teams in the United States and China. Each
module is self-contained and can be developed separately but cannot
run independently and is not executable code. Twenty-five percent of
total product development hours is allocated to this step (five
percent of which is performed in the United States and 20 percent in
China).
[[Page 43196]]
(5) Software Build: Separate source code modules are transferred
to the repository server hosted in the United States, which is the
only place where a development team has access to the entire source
code. The team integrates the modules with each other by compiling
the source code into object code (a sequence of statements or
instructions in a computer language); works out incompatibilities or
bugs by re-writing or correcting source code, as needed; makes the
software into executable files; and constructs an installation
package that is easily installed. The U.S. team creates all the
lines of the object code and makes the software executable files in
various versions and languages. This step may be performed multiple
times if testing indicates the need for correction. Fifteen percent
of total product development hours is allocated to this step, all of
which is performed in the United States.
(6) Testing and Validation: The software package is tested based
on functional specifications defined in Step 1. Once the test case
pass rate is met, the software is ready for release. Fifteen percent
of total product development hours is allocated to this step (five
percent of which is performed in the United States and 10 percent in
China).
(7) Preparing Software/Burning Media for Distribution: The U.S.
project management team coordinates with marketing and sales teams
to make the software publicly available. Five percent of total
product development hours is allocated to this step, all of which is
performed in the United States.
Issue
What is the country of origin of the FLY Server for the purposes
of U.S. Government procurement?
Law and Analysis
Country of Origin Determination
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 177.21-177.31, 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 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 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 ``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.
CBP has consistently held that conducting a software build--
compiling source code into object code--results in a substantial
transformation. In Headquarters Ruling Letter (``HQ'') H301776,
dated August 7, 2019, two software products were produced using a
four-step process: (1) writing original source code, or modifying
open source software code in the United States; (2) writing or
modifying source code in Canada; (3) compiling the source code into
executable object code in the United States; and (4) delivering the
finished software to the purchaser. In the final determination, CBP
cited to two secondary sources to highlight how ``source code'' and
``object code'' differ in several important ways. Source code is a
``computer program written in a high level human readable
language.'' See, e.g., Daniel S. Lin, Matthew Sag, and Ronald S.
Laurie, Source Code versus Object Code: Patent Implications for the
Open-Source Community, 18 Santa Clara High Tech. L.J. 235, 238
(2001). While it is easier for humans to read and write programs in
``high level human readable languages,'' computers cannot execute
these programs. See Note, Copyright Protection of Computer Program
Object Code, 96 Harv. L. Rev. 1723, 1724 (1983). Computers can
execute only ``object code,'' which is a program consisting of
clusters of ``0'' and ``1'' symbols. Id. Programmers create object
code from source code by feeding it into a program known as a
``compiler.'' Id. CBP held that the name, character, and use of the
source code were changed as a result of its compilation into
executable object code and its completion into finished software in
the United States.
In HQ H268858, dated February 12, 2016, CBP held that conducting
a software build resulted in a substantial transformation. In that
decision, four software products were produced using a similar
multi-stage process: (1) writing the source code in Malaysia; (2)
compiling the source code into usable object code in the United
States; and (3) installing the finished software on U.S.-origin
discs in the United States. CBP held that all four software products
were substantially transformed in the United States, finding that
the software build conducted in the United States created a new and
different article with a new name, character, and use. See also HQ
H243606, dated December 4, 2013 (source code programmed in China and
then compiled into object code in the United States was a
substantial transformation).
As in HQ H301776, HQ H268858, and HQ H243606, AvePoint also
conducts a software build in the United States. This process is
sufficient to create a new article with a new name, character, and
use: the name of the product changes from source code to object
code, the character changes from computer code to finished software,
and the use changes from instructions to an executable program.
Accordingly, we find that the last substantial transformation occurs
in the United, and therefore, the FLY Server is not a product of a
foreign country or instrumentality designated pursuant to 19 U.S.C.
2511(b). As to whether the FLY Server produced in the United States
qualifies as a ``U.S.-made end product,'' you may wish to consult
with the relevant government procuring agency and review Acetris
Health, LLC v. United States, 949 F.3d 719 (Fed. Cir. 2020).
Holding
Based on the information provided, for purposes of U.S.
Government procurement, the FLY Server is last substantially
transformed in the United States.
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. 2025-17123 Filed 9-5-25; 8:45 am]
BILLING CODE 9111-14-P
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</html>Indexed from Federal Register on September 8, 2025.
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