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Significant On-Site Assembly Substantially Transforms X-Ray System, CBP Rules

Monday, July 10, 2017
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of a digital radiography system that may be offered to the U.S. government under an undesignated government procurement contract. Any party-at-interest may seek judicial review of this determination by Aug. 7. 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 major components of the system at issue include a Chinese-origin high-voltage generator, a U.S.-origin wireless DRX detector, a Chinese-origin elevating float-top table, a Chinese-origin tube stand, a Chinese-origin wall stand, and either a U.S.- or a Japanese-origin x-ray tube. These components are combined with software that is largely developed in the U.S. The final assembly, configuration, and testing take place in the U.S.

In determination HQ H283088 CBP concludes that the components are substantially transformed as a result of the assembly operations and software installation performed at the on-site location in the U.S. There is no single component that dominates and retains its own identity after the system is put together. In addition, the system does not have the character of an x-ray system and its individual components cannot carry out the functions of an x-ray system until they are all put together, a process that takes a significant amount of time on-site to complete. CBP therefore concludes that the country of origin of this system for U.S. government procurement purposes is the U.S.

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