8 Feb 2019
CBP Rules on Origin of Certain Ethernet Switches and Medical Electrodes
U.S. Customs and Border Protection has issued final determinations concerning the country of origin of certain Ethernet switches and medical electrodes that may be offered to the U.S. government under undesignated government procurement contracts. Any party-at-interest may seek judicial review of these determinations by 7 March. 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.
Ethernet switches. The hardware for the subject Ethernet switches, routers and network cards is manufactured in mainland China from components sourced from various parts of Asia, including mainland China and Singapore. This hardware is imported in a fully assembled state but is not functional because it lacks the software needed to run. The final programming of the EEPROM on the device and a majority of the programming for the operating system, along with the downloading of the software, are completed in the United States.
In ruling HQ H290670, consistent with several previous rulings, CBP concludes that it is only after the installation of U.S.-origin software that the devices obtain their essence and functionality as switches and routers. As a result, CBP determines that the United States is the country of origin of these products for purposes of government procurement.
Electrodes. The products at issue are self-adhesive cutaneous electrodes designed and manufactured specifically for electrocardiogram and electromyogram monitoring applications. Each electrode consists of a sticky pad composed of electrically conductive hydrogel laminated onto conductive plastic and fabric backing, which is attached to a lead wire with a miniscule amount of glue. All of the engineering and design of the electrodes is conducted in the United States and the hydrogel, including all of its components, is manufactured entirely in the United States before being shipped to mainland China for further processing.
In ruling HQ H300743, consistent with several previous rulings, CBP concludes that the country of origin of the electrodes for purposes of government procurement is the United States. CBP explains that (i) the majority of the components of the electrodes are of U.S. or WTO GPA country origin, (ii) the hydrogel performs the essential function of the finished product, and (iii) the assembly and processing that occurs in mainland China constitute relatively simple and minor operations that do not substantially transform the product.