CBP Finds U.S. Is Origin for Ethernet Switches Assembled in China, Programmed in U.S.
U.S. Customs and Border Protection has issued a final determination that the United States is the country of origin of certain Ethernet switches for purposes of U.S. government procurement. The switches are assembled in China and programmed in the U.S. using U.S. software.
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The final determination was issued at the request of Arista Networks, Inc.
(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.)
Switches Assembled in China and Programmed in U.S. with U.S. Software
The products at issue are “7 Series” Ethernet switches designed to interconnect servers and storage appliances in data centers. Each switch consists of one or more printed circuit board assemblies, chassis, top cover, power supply, and fans. The switches are assembled in China in seven discreet steps.
Arista then imports the switches into the U.S. where they are programmed, tested, packaged and prepared for shipping. The software used is Arista’s Extensible Operating System (EOS) software which provides the following capabilities and benefits: in-service software upgrade, software fault containment, fault repair, security exploit containment, and scalable management interface.
According to Arista, the switches imported from China could not function as network switches without this software, which was developed by Arista in the U.S. at considerable cost, with more than 80% of the company’s Research and Development spending going toward EOS software development.
Switches Are Product of U.S. as Essential Character & Substantial Transformation Occur There
Based on the facts provided, CBP states that the programming operations performed in the U.S. impart the essential character and substantially transform the Arista “7 Series” Ethernet switches. Therefore, the switches will be considered products of the U.S. for purposes of U.S. Government procurement.
Any Party-at-Interest May Request Judicial Review by Nov 7
CBP states that any party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial review of a final determination by November 7, 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.
CBP contact - Heather Pinnock (202) 325- 0034
(FR Pub 10/07/11, HQ H175415)