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HQ 561774

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January 29, 2001

MAR-05 RR:CR:SM 561774 BLS

CATEGORY: MARKING

Frederick L. Ikenson, P.C.
1621 New Hampshire Avenue, N.W.
Washington, D.C. 20009-2584

RE: Country of origin marking of glass rod (“cane”) used in the production of optical fiber; substantial transformation; HRL 560660

Dear Mr. Ikenson:

This is in reference to your letter dated June 8, 2000, and fax of December 20, 2000, on behalf of Corning Inc., concerning the country of origin marking requirements for certain optical fiber preforms processed in the U.S. from imported glass rod known as “cane.”

FACTS:

The “cane” will be imported by Corning from one or more of its foreign affiliates for use in the production in the U.S. of optical fiber preforms. The preforms will then be “drawn” by Corning into optical glass fiber, for long distance telecommunications and other uses.

Background

Optical fiber may be described generally as “[a] long thin strand of transparent glass, plastic, or other material usually consisting of a fiber optical core [cane] and a fiber optical cladding capable of conducting light along its axial length by internal reflection.” (See U.S. International Trade Commission (USITC) Publication 2851, February 1995 , Industry & Trade Summary, Optical Fiber Cable, and Bundles, B-2). In analyzing the issues framed by your request, we believe the following information explaining fiber optics, included in a publication issued by Corning, will be helpful:

In a typical fiber optic system, a light source (optical transmitter), which is either a light transmitting diode (“LED”) or a laser, converts incoming
electrical signals into optical signals. In the “on” state, the LED or laser emits light into optical fiber, which serves as a transmission medium through which the light travels. A light detector, or receiver, then converts the light back into an electrical signal for processing.

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The fiber itself consists of two different types of glass -- one making up the “core” [of the preform, i.e., cane], and the other making up the “cladding” – surrounded by a protective acrylate coating. The core is the light-guiding region of the fiber, while the cladding, which has a different index of refraction than the core, ensures that the light signal remains within the core as it is carried along the fiber’s length.

The international standard for the cladding diameter of telecommunication optical fiber is 125 microns. The diameter of the core depends on which of two main types of fiber is being made. In multimode fiber, which is commonly used for premise networks where transmission distances are less than two kilometers, the diameter of the core is most frequently 50 or 62.5 microns and is large enough to permit hundreds of rays (or modes) of light to travel through the core simultaneously. Multimode fibers are available in many different designs to optimize their information capacity at different wavelengths and operate with a variety of different light sources. In single-mode fiber, which is commonly used for telephony and data communications, the core diameter is considerably smaller -- typically 7 to 9 microns. Single-mode fiber permits only one mode of light to travel through the core. There are many different types of single-mode fiber optimized for different operating wavelengths and operating conditions ranging from short terrestrial all the way up to long distance submarine applications.

Two of the more important attributes of optical fiber are the properties known as “attenuation” and “bandwidth.” “Attenuation” refers to the reduction of signal strength, or loss of light power, that occurs as light travels through a length of fiber; “bandwidth” refers to the fiber’s information-carrying capacity. The desired (low) attenuation permits the transmittal of light over long distances without the need to use repeaters; the desired (high) bandwidth permits the transmission of huge amounts of information over the line. It is the ability of fiber to handle very high amounts of information over very long distances, as measured by
bandwidth and attenuation respectively, that separates it from other transmission media like copper wire or coaxial cable.

As noted, in single-mode fibers, light is most intense at the core, but some of the light propagating down the fiber is carried in the cladding region of the fiber. The mode field diameter is the measurement of the diameter of

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the spot of light. For single-mode fiber, mode-field diameter rather than core diameter is the functional diameter that determines the optical performance of a fiber when it is coupled with a light source, connectorized, spliced, and bent. Mode-field diameter is also a function of wavelength, core diameter and the refractive-index difference between the core and the cladding.

The minimum wavelength at which an optical fiber will support only one propagating mode of light is referred to as the cutoff wavelength. If the system operating wavelength is below the cutoff wavelength, multimode operations may take place and introduce an additional source of bandwidth reduction, i.e., limit the fiber’s information-carrying capacity.

Also important is the fiber geometry -- specifically the extent to which the fiber manufacturer succeeds in achieving circularity and concentricity of the core. When fibers are spliced, it is desirable to have the cores of each fiber form a perfect connection; If one core is more oval (less circular) in cross-section than the other, or if one is “off-center”, light signals will be lost.

See "Just the Facts, A basic overview of fiber optics," 1995 Corning Incorporated, Opto-Electronics Group, 35 West Market Street, Corning, NY 14831.

Production of Preform

You state that Corning’s production of optical fiber preforms can be accomplished by either a two-step process or a continuous, single step process. The two-step process in this case is as follows:

A) Production of Cane

The fiber core is manufactured first by depositing layer after layer of microscopic glass particles called “soot” onto a ceramic target (bait) rod. This soot is a combination of both pure silica and an additive, germania . The soot is formed by burning the appropriate chemical vapors in a gas flame. Once the core material is deposited, a layer of cladding material (pure silica) is added. This small amount of cladding material, upon consolidation, protects the core region from mechanical damage such as nicks and scratches, and from chemical contamination. The resulting object is a cylindrical porous structure with a chalky consistency called a 4

“core preform.” Once the deposition process is completed, the bait rod is removed and the core preform is placed in an oven for consolidation. This process causes the chalky core preform to become both smaller and denser, and to become clear.

This clear glass core preform is then lowered into a furnace and drawn into a glass rod of smaller diameter and longer length. The resulting rod is called a cane. It is cut to convenient lengths and can be stored for later use on site, or it can be transferred between locations.

B) Production of Fiber Preform from Cane

The second step of the process – manufacture of the fiber preform – follows essentially the same routine, except that instead of a bait rod, pure silica soot is deposited onto a cane in substantial quantities to form the final cladding dimension. This stage of the fiber preform – consisting of the cane now with a porous chalky full cladding region added – is again consolidated to form clear glass (the finished fiber preform), which subsequently is drawn by heating and pulling to form the finished fiber.

The two-step process (as opposed to the single-step, continuous process) is said to provide manufacturing flexibility – the ability to manufacture a large inventory of cane for use when and where needed for the production of fiber preform.

You contend that production of the fiber preform in the U.S. results in a substantial transformation of the imported cane and that consequently, the U.S. producer of the fiber preform is the ultimate purchaser of the cane.

ISSUE:

What are the country of origin marking requirements for the fiber preforms produced from the imported cane?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

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Congressional intent in enacting 19 U.S.C. 1304 was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported article the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co., 27 CCPA 297 at 302; C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines "country of origin" as the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of the marking laws and regulations. The case of United States v. GibsonThomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940), provides that an article used in manufacture in the U.S. which results in an article having a name, character or use differing from that of the imported constituent article will be considered substantially transformed. In such circumstances, the U.S. manufacturer will be considered the ultimate purchaser. The imported article will be excepted from the marking requirements and only the outermost container is required to be marked. (See 19 CFR 134.35.)

Headquarters Ruling Letter (HRL) 561660

In HRL 561660 dated April 9, 2000, Customs determined the country of origin marking requirements of optical fiber drawn in the U.S. from imported fiber preforms. In that case, we found that the “very essence” and thus the character of the optical fiber was imparted by the preform as the optical fiber retained the identical optical properties of the preform. (See National Juice Products v. United States, 628 F. Supp. 978, 10 CIT 48 (CIT 1986).) Therefore, we held that the drawing operations in the U.S. did not result in a substantial transformation of the imported preform, and that the country of origin of the optical fiber was the country of origin of the preform.

You seek to distinguish the facts in HRL 561660 from the facts in this case. Thus, you state that the major optical properties of attenuation and bandwidth, as well as mode-field diameter, fiber geometry and cutoff wavelength (note discussion of fiber optics, above), are imparted to the fiber during the process by which the preform is produced.

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However, you state that the imported “cane” in this case, while dedicated to the production of a designated preform, has none of the optical properties which are attained only through the processing or more specifically “overcladding” of the cane (see above). In this regard, you note that a substantial increase in mass occurs as a result of the cladding during the second stage of production (from cane to preform), although the change is more dramatic when single-mode fiber is the end product. You state that while the composition of the core glass (cane) contributes to the “chemical” attributes of the optical fiber preform, it is the chemical aspects of the cladding as well as the substantial physical increase that results from such “overcladding” that imparts the essential character to the preform.

At our request, the Customs Office of Laboratories and Scientific Services has reviewed the production process and provides the following comments:

Corning plans to import glass rod or "cane" into the United States which is subjected to an "overcladding" process which imparts a precise layer of glass over the cane glass core. A sophisticated vacuum deposition process in which the thickness, physical and chemical properties are tightly controlled applies the overcladding. The geometry, thickness, refractive index and chemistry of the cladded glass are critical to the manner in which the light signal is carried in the finished fiber. Review of the formulaic relationships between the end properties of the preform and the physical parameters show that the cladding focuses and finely tunes the light as it passes through the fiber.

In essence the "cane" or the core of the preform, itself, has no optical properties. (Emphasis added.) Simply put, sending light waves through an uncladded cable would be very much like sending light through a glass-stirring rod. An unmodulated "blob" of light would come through at all bandwidths with no special properties other than presenting pure light energy. However, the precisely applied cladding turns the unfocused rod into a precise material capable of modulating signals and isolating bandwidths. Based on the formulaic relationships, the properties of the preform are established, not only by the cladding itself, but also by the interaction of the core with the cladding. For instance, the change in the refractive indices as the light travels from the core into the cladding and the geometry of the cladding are responsible for maintaining the strength of the signal as it travels the length of the fiber. In passing through a single mode fiber, light energy would quickly disperse and be lost. Based 7
upon the formulaic relationships, there are a significant number of other critical properties that are imparted by the application of the cladding.

In conclusion, it is clear that the "overcladding" is the most critical part of the optical preform production process in that all of the essential optical properties are imparted at that stage of production. (Emphasis added.)

As the optical properties are imparted at the preform stage of production, it is our opinion that the “essence” or character of the preform does not derive from the cane, but from the added cladding and its interaction with the core (“cane”). Accordingly, we find that the production of the fiber preform in this case results in a substantial transformation of the imported cane. Consequently, the U.S. producer of the fiber preform is the ultimate purchaser of the imported cane, and the preforms made therefrom will be excepted from the marking requirements. (See 19 CFR 134.35.)

Marking of Containers

Section 134.22(e)(1), Customs Regulations (19 CFR 134.22(e)(1)), provides in part that the containers of imported articles are not required to be marked if the imported articles are within the exceptions set forth in paragraph (f), (g), or (h) in 19 CFR 134.32. You believe that 19 CFR 134.22(e)(1) is applicable in this case and that accordingly, the containers in which the cane is imported are also excepted from the marking requirements.

Section 134.32(g) of the regulations (19 CFR §134.32(g)) provides an exception to the marking requirements if the imported article is to be processed in the U.S. by the importer or for his account otherwise than for the purpose of concealing the origin of such article and in such manner that any mark contemplated by this section would necessarily be obliterated, destroyed, or permanently concealed.

Based on the information presented, it appears that any marking appearing on the imported cane will necessarily be obliterated when processed into fiber preform. Accordingly, the imported cane will be excepted from marking under 19 CFR §134.32(g). The import containers will also be excepted from marking at the time of importation pursuant to 19 CFR §134.22(e)(1).

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HOLDING:

1) The production of fiber preforms from imported glass rods known as “cane” results in a substantial transformation of the cane. Consequently, the U.S. producer of the fiber preform is the ultimate purchaser of the imported cane, and the preforms made therefrom will be excepted from country of origin marking requirements.

2) Based on the information submitted, as the imported cane will be excepted from marking under 19 CFR 134.32(g), pursuant to 19 CFR 134.22(e)(1), the outermost containers in which the cane is imported are also excepted from marking.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,


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