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Court Upholds CBP Ruling on Origin of Flashlights

Friday, December 09, 2016
Sandler, Travis & Rosenberg Trade Report

The Court of Appeals for the Federal Circuit has upheld a U.S. Customs and Border Protection final determination that the country of origin of flashlights with light-emitting diodes that may be offered to the U.S. military under an undesignated government procurement contract is China.

CBP’s final determination concluded that the foreign-made components and parts in the flashlights do not undergo a substantial transformation when they are assembled together in the U.S. Virtually all of the components are of Chinese origin and only the assembly process, which CBP said “does not seem to be exceptionally complex,” is done in the U.S. While the flashlights are programmed with software written in the U.S., CBP said this programming is not essential to the basic operation of the flashlights and is not sufficiently complex to change their identity or character.

The CAFC agreed that the imported components were not substantially transformed by the assembly operations in the U.S. After a lengthy review of court decisions that established and affirmed that a substantial transformation constitutes a change in name, character, or use, the CAFC found that none of those changes are present in this case. Specifically, the court said, the imported components retained their individual names, experienced no change in shape or material composition, and underwent no change in use (which was pre-determined at the time of importation) following their post-importation assembly into finished flashlights. The CAFC also cited the relative simplicity of the assembly process as further evidence of a lack of substantial transformation.

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