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NY N024619




March 24, 2008

CLA-2-85:OT:RR:E:NC:N1:109

CATEGORY: CLASSIFICATION

Mr. Jeff Chiu
Global4PL Supply Chain Services
2953 Bunker Hill Lane, Suite 400
Santa Clara, CA 95054

RE: The tariff classification of printed circuit board assemblies (PCBAs), telecommunication chassis, and a wavelength division multiplexing system and the country of origin marking of printed circuit board assemblies (PCBAs) and telecommunication chassis from Malaysia

Dear Mr. Chiu:

This is in response to your letter dated March 12, 2008, which you filed on behalf of your client, Infinera Corporation, 1322 Bordeaux Drive, Sunnyvale, California 94089.

Your letter requests the classification of printed circuit board assemblies (PCBAs) utilized in Infinera’s DTN switched wavelength division multiplexing system, a telecommunications chassis, and a wavelength division multiplexing (WDM) system. You have also asked about the country of origin marking on each item.

It is explained in your letter that Infinera Corporation imports PCBAs that have been populated with various electronic components in Malaysia. The PCBAs are designed and manufactured to the specifics of the Infinera product line of WDM systems. Telecommunication chassis are also utilized in the manufacture of these WDM systems.

The applicable subheading for the printed circuit board assemblies (PCBAs) and telecommunication chassis be 8517.70.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527, or 8528; parts thereof: Parts." The rate of duty will be free.

You propose to individually mark the PCBAs and the telecommunications chassis “Made in Malaysia.” The outer cartons that the PCBAs and telecommunications chassis are imported in will also be marked “Made in Malaysia.”

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) 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.

As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.

With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.

The proposed individual marking on the imported PCBAs and the telecommunications chassis, “Made in Malaysia”, is an acceptable country of origin marking as long as it is conspicuously, legibly and permanently marked in satisfaction of the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134. The marking of the outer cartons, as you propose, is optional.

Your letter states that the imported PCBAs and telecommunications chassis are assembled along with other components in the United States to manufacture a wavelength division multiplexing (WDM) system. The process of assembling the PCBAs and telecommunications chassis together is followed by the installation of proprietary software, calibration, configuration, and testing. In your letter you also state that the software installation, calibration, configuration, and testing represents the most significant portion of the transformation because it is only after these processes that the WDM system becomes functional. Based on the information provided, a substantial transformation occurs as a result of the assembly process performed in the United States, yielding the WDM system. It is understood from your letter that the WDM systems will be sold to overseas customers and at times they will have to be re-imported into the United States for repair. The U.S. assembled WDM systems are eligible for duty-free treatment under subheading 9801.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad ... Articles provided for in headings 8517, 8520, 8525, 8527 or 8529 when returned to the United States”, provided the documentation requirements of 19 Customs Federal Regulations (CFR) 10.1 are satisfied.

In your letter you propose marking the WDM systems, which will be assembled in the United States, “Product of the USA.” The country of origin marking of merchandise after importation into the United States falls under the jurisdiction of the Federal Trade Commission. We advise you to contact the Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, DC 20508 regarding this matter.

Your letter states that in the future the assembly process to manufacture the WDM system may be performed in Malaysia. When WDM systems manufactured in a foreign country are imported into the United States, the applicable subheading for the wavelength division multiplexing (WDM) system will be 8517.62.0050, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Other.” The rate of duty will be free.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Linda M. Hackett at 646-733-3015.

Sincerely,

Robert B. Swierupski
Director,

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