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CBP Identifies Country of Origin of Notebook Computers

Monday, March 16, 2015
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination (HQ H240199) concerning the country of origin of certain notebook computers that may be offered to the U.S. government under an undesignated government procurement contract. This determination was issued March 10 and any party-at-interest may seek judicial review of it by April 15. 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.

The items at issue are certain commercial notebook computers consisting of (1) a base unit made of a metal frame with metal or plastic skins; (2) a hinge-up top consisting of an LCD display, a surrounding frame and hinges for attachment to the base unit; (3) a hard disk drive/solid state drive that stores data, including the operating system and value-added software; (4) a WLAN card that establishes wireless connections with other devices; (5) a RAM integrated circuit affixed to a printed circuit board; (6) a battery; (7) the BIOS to execute the instructions that start the notebook and prepare the hardware for it; (8) an operating system that works with application programs to perform user interface and various management tasks; and (9) other minor components such as cables, brackets, screws, CDs and manuals.

The WLAN card and battery are sourced from Country A, a non-TAA designated country, where the assembly of the base unit and hinge-up also take place. The CPU, RAM and hard disk drive/solid state drive are sourced from Country A or other countries. The BIOS and operating system are developed in a TAA designated country, and the RAM and hard disk drive/solid state drive may also be sourced from different TAA designated countries.

CBP was presented with four different production scenarios. In one, all the components are imported into a TAA designated country for assembly. Scenarios two and three are similar, while under scenario four all the hardware components are assembled in a non-TAA designated country and imported into a TAA designated country. The BIOS and the operating system are downloaded in the TAA designated country and the notebook then goes through testing, quality control and packaging. CBP concluded that under each of these four scenarios the country of origin for purposes of U.S. government procurement and country of origin marking is the non-TAA designated country (Country A) because the last substantial transformation takes place in that country.

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