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U.S. Customs and Border Protection has issued a final determination concerning the country of origin of network transceivers and high speed cabling devices used to transmit and receive information between two network devices 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 June 30. 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.
In the first manufacturing scenario for the transceivers, “blank” transceivers are purchased from an unrelated supplier in China or another Asian country and proprietary software that was developed in the U.S. and makes the transceivers functional is downloaded onto them. In the second scenario the transceivers have already been programmed with a generic program that is removed so the proprietary software can be installed. In both scenarios, the proprietary software is developed and programmed in the U.S. and the testing is conducted in the U.S.
For the high speed cabling device, which comprises two transceivers and a transmission medium (copper or fiber optic cable) in one integrated part, all programming and testing are said to be the same as the transceivers.
In final determination HQ H273091, CBP states that the country of origin of the subject goods for government procurement and country of origin marking purposes is the U.S. in the first scenario. CBP explains that in this scenario the transceivers could not function as a network device in any capacity without the proprietary software and are thus substantially transformed as a result of the downloading performed in the U.S. In the second scenario, however, CBP states that it appears that programming an imported, already functional transceiver just to customize its network compatibility would not actually change its identity. As a result, the country of origin in this scenario is China or the source Asian country.
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