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CBP Identifies Country of Origin of Hard Disk Drives and Self-Encrypting Drives

Wednesday, August 21, 2013
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of certain hard disk drives and self-encrypting drives that may be offered to the U.S. government under an undesignated government procurement contract. 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. This determination was issued Aug.14 and any party-at-interest may seek judicial review of it by Sept. 20.

In this case, fully assembled digital storage devices (HDDs) are imported into the U.S. but are completely non-functional for their intended purpose at that time because their disk heads cannot move, they cannot store or retrieve data, and they cannot be recognized or listed by a computer or network. They are then programmed in the U.S. with firmware primarily developed in the U.S. that causes the HDDs to function as digital storage devices. HDDs become SEDs through reformatting to configure them to customer-specific security requirements.

CBP concludes that the programming operations performed in the U.S. using U.S.-origin firmware substantially transform the HDDs, which will therefore be considered a product of the U.S. for purposes of U.S. government procurement. CBP adds that to the extent that HDDs are programmed with additional U.S.-origin security firmware, the country of origin of the SEDs will be the U.S.

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