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CBP Finds Malaysia/Singapore is Country of Origin for Iridium Satphones

August 3, 2011 by Elizabeth Parker|Customs and Ports

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of the Iridium 9555 satellite telephone. CBP has determined that Malaysia or Singapore is the country of origin, depending on where the last substantial transformation occurs for the transceiver and application boards, which together convey the satphone’s essential character.

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This final determination was issued at the request of Iridium Satellite, LLC.

(CBP issues country of origin advisory rulings and final determinations on whether an article is or would be a product of a designated country or instrumentality for the purpose of granting waivers of certain "Buy American" restrictions in U.S. law or practice for products offered for sale to the U.S. government.)

Boards Either from Malaysia or Singapore, 21 Other Parts from 7 Countries

Iridium imports Iridium 9555 satellite telephones from Singapore. The satphones are composed of 23 components, which include a transceiver board and application board. Iridium provided the following six alternative manufacturing scenarios for the two boards, which are major components of the satphones:

  • Scenario I: The transceiver and application boards are both programmed in Malaysia.
  • Scenario II: The transceiver and application boards are programmed and tested in Malaysia. The application board is shipped without an audio and power jack, which are soldered onto the board in Singapore.
  • Scenario III: The transceiver and application boards are programmed and tested in Singapore.
  • Scenario IV: The transceiver board is programmed and tested in Singapore. The application board is programmed and tested in Malaysia.
  • Scenario V: The transceiver board is programmed and tested in Malaysia. The application board is programmed and tested in Singapore.
  • Scenario VI: The component that stores the firmware which controls the functionality of the satphone is programmed in Singapore and then shipped to Malaysia, where it is incorporated into the transceiver board. The application board is programmed and tested in Malaysia.

The remaining 21 components are manufactured in Singapore, Malaysia, Hong Kong, China, Korea, the United Kingdom, and the U.S. With the exception of the components made in Singapore, all of the components, including the transceiver and application boards are shipped to Singapore, where they are placed in stock until used to manufacture the satphones.

Boards Together Convey Essential Character, Origin is Their Last Substantial Transformation

CBP has concluded that the transceiver and application boards together convey the essential character of the satphones, and it is at their assembly and programming where the last substantial transformation occurs. If both boards are assembled and programmed in Malaysia, the country of origin of the telephones for purposes of U.S. government procurement is Malaysia. If both boards are assembled and programmed in Singapore, the country of origin of the telephones is Singapore.

In examining the facts of the six unique manufacturing scenarios on a case-by-case basis, CBP found that in Scenarios I, II, and VI the country where the last substantial transformation takes place is Malaysia. As such, the country of origin for the satphones in these three scenarios is Malaysia.

In Scenarios III, IV, and V, CBP found the country where the last substantial transformation takes place is Singapore. As such, the country of origin for the satphones in these three scenarios is Singapore.1

Any Party-at-Interest May Request Judicial Review by September 1

CBP states that any party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial review of a final determination by September 1, 2011. In addition, under 19 CFR 177.31, any party-at-interest other than the party which requested this final determination may request that CBP reexamine the matter anew and issue a new final determination.

1CBP references Data General v. U.S. (1982), in which the Court of International Trade determined that the programming of a foreign memory chip in the U.S. substantially transformed the chip into a U.S. article. CBP sources state that for these satphones, it similarly found that programming counts as substantial transformation, and where it takes place helps determine the country of origin.

In Scenarios IV and V, some programming and assembly of the boards take place in both Singapore and Malaysia. However, CBP sources state that since some of the programming in both scenarios takes place in Singapore and because the board in each scenario that is programmed in Malaysia is shipped to Singapore for further assembly, the country of origin for purposes of government procurement is Singapore.

CBP Contact -- Heather Pinnock (202) 325-0034

(FR Pub 08/02/11, HQ H170315)