CBP Rules on Country of Origin for Gov't Procurement of Ethernet Switches With U.S. Software
CBP issued a Dec. 3 final determination that Malaysia is the country of origin for Arista Networks 7 series local area network Ethernet switches. The switches are designed to interconnect servers and storage appliances in data centers. They consist of one or more printed circuit board assembly, a chassis, top cover, power supply, and fans. The chassis and top cover are manufactured in China, and the circuit board is made in Malaysia.
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The components are assembled in Malaysia, then shipped to Singapore for customization and installation of EOS software that was developed in the U.S. “at considerable cost.” The software provides switching functionality, secure administration, increased reliability, and optimized network management. Without the software, the devices could not function as Ethernet switches. Arista argued that the country of origin for the switches is Singapore.
CBP noted that programming can be a substantial transformation that changes a product’s country of origin, but said the installation that occurred in Singapore did not constitute programming. The programming instead occurred in the United States, CBP said. Given that the programming occurred in the U.S., and the major assembly then occurred in Malaysia, CBP ruled that Malaysia is the country of origin for Arista’s Ethernet switches for government procurement purposes because that is the country where the last substantial transformation occurred.
(Federal Register 12/11/13)