Complex Assembly Operations in U.S. Confer Origin on HVAC Units with Imported Base, CBP Says
U.S. Customs and Border Protection has issued a final determination (HQ H248850) concerning the country of origin of outdoor units used in HVAC systems that may be offered to the U.S. government under an undesignated government procurement contract. This determination was issued Nov. 7 and any party-at-interest may seek judicial review of it by Dec. 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 item at issue is the outdoor unit of a variable refrigerant flow multi-split heating, ventilation and air conditioning system. This unit consists of a base that is imported from Japan and then fitted with additional parts, assembled and tested in the U.S. In addition, software used for the outdoor unit is developed in the U.S.
CBP concludes that the assembly operations performed in the U.S. are complex and require skilled workers and that the outdoor units are substantially transformed as a result of these operations. As a result, the outdoor unit may be considered a product of the U.S. for purposes of U.S. government procurement.