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CBP Identifies Country of Origin for Multifunction Digital Printers

Wednesday, January 06, 2016
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of certain multifunction digital printer products that may be offered to the U.S. government under an undesignated government procurement contract. This determination was issued Dec. 23, 2015, and any party-at-interest may seek judicial review of it by Feb. 5. 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 MFPs are multifunction color machines that perform printing, copying, scanning and faxing functions. They were designed and developed in Japan and their most important and complex components will be manufactured in Japan. The assembly process for the MFPs will start in Thailand and finish in Japan, assembling a total of 11 subassemblies into the final product.

CBP holds in ruling HQ 263561 that the frame and subassemblies that will be imported into Japan will be substantially transformed in Japan such that Japan will be the country of origin for purposes of U.S. government procurement. In making this determination CBP notes that only four of the subassemblies will be assembled into the frame in Thailand while the remaining seven will be assembled into, and permanently integrated within, the MFP in Japan. Further, the MFP board (the “brain” of the device) will be manufactured from all Japanese parts, will be integrated into the MFP in Japan, and accounts for a significant percentage of total subassembly cost. Moreover, the subassemblies and sub-components from Thailand and China will be integrated into a product that was designed and developed in Japan and will be operated by Japanese-developed software that will also be installed in Japan. Finally, the assembly, testing and adjustment operations that occur in Japan will subsume the individual subassemblies and sub-components into a new and distinct article of commerce that has a new name, character and use.

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