CBP Publishes Government Procurement Final Determination on Printer Cartridges

(Under all three scenarios, empty toner cartridges are collected; shipped to one foreign country for sorting and to another for processing; and then shipped to the U.S. for further processing and packaging. The first scenario involves laser toner cartridges for color laser printers, including both color and monochrome (black) cartridges that have electronic chips inserted in the U.S. The second and third scenarios involve monochrome (black) laser toner cartridges for conventional laser printers, with and without electronic chips, respectively.)

Any Party-at-Interest May Request Judicial Review Within 30 Days

CBP states that any party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial review of this final determination within 30 days of August 8, 2007. Any party-at-interest other than the party which requested this final determination may request, pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and issue a new final determination.

Processing Scenarios Described

CBP states that Nukote International, Inc. (Nukote) collects empty toner cartridges of differing countries of origin from end users at collection sites in the U.S. and, to a substantially lesser extent, from other countries, and also buys used printer cartridges from U.S.-based brokers. The cartridges are then sorted at one foreign location.

At a second foreign location, the cartridges are split open, disassembled, and separated into three sub-assemblies. Worn components of the sub-assemblies are replaced and made operational again. This work constitutes disassembly of the used cartridges, as well as certain preparation for the processing which will occur in the U.S. At this point the goods are tested. Nukote claims that the sub-assemblies are not functional without the chip which is later installed in the U.S. (at least in the two scenarios where the chip is involved).

The cartridges are then sent to the U.S for processing which occurs at Nukote's Rochester, NY facility. The processing includes inspection, filling and sealing, mechanical assembly, testing, cleaning, installation of a computer chip (under two of the scenarios), preparation and packaging for shipment, and shipment.

Operations Performed in U.S. Do Not Substantially Transform Cartridges

To determine the country of origin, CBP considered whether the operations performed on the printer cartridges in the U.S. substantially transformed the subject merchandise into a new and different article of commerce.

CBP determined that the operations performed at Nukote's Rochester, NY facility do not result in a substantial transformation of the cartridges and that the cartridges will therefore not be considered to be products of the U.S.

In its reasoning, CBP states, among other things, that it does not believe that the operations performed are complex enough to result in a substantial transformation of the sub-assemblies. CBP further states that the sub-assemblies are essentially made functional again at the foreign facility; and that while the chip that makes the cartridge work (in two of the three scenarios) is inserted in the U.S., CBP found that the bringing together of the subassemblies in the U.S. does not result in a substantial transformation of the goods.

(It is inferred from the ruling that because CBP did not consider the subject merchandise to be substantially transformed under the two scenarios in which the electronic chips were inserted in the U.S., it also did not consider the subject merchandise to be substantially transformed under the scenario in which they were not installed.)

CBP contact - Gerry O'Brien (202) 572-8792

CBP final determination (FR Pub 08/08/07) available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-15484.pdf