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CBP Says Origin of Fitbit Trackers Based on Printed Circuit Board Assembly

The country of origin for Fitbit wearable smart devices is based upon where the printed circuit board assemblies are manufactured, CBP said in an Oct. 3 ruling. CBP's decision came in response to a binding ruling request from the company through its lawyer, John Shane of Wiley Rein. CBP discussed multiple sourcing scenarios with Fitbit as part of the ruling request, the agency said. Fitbit recently announced it would shift sourcing outside of China (see 1910090053).

Fitbit's ruling request involves two styles of fitness trackers, one which uses a combined Bluetooth transceiver and central processing unit, while other uses a separate transceiver and CPU component, CBP said. Both styles involve parts made in Taiwan, China and the Philippines. A "[s]urface-mount technology ('SMT') is used to load a raw printed circuit board ('PCB') with diodes, transistors, capacitors, resistors, memory chips, and other task-specific integrated circuits," CBP said.

Initially, Fitbit told CBP that both the SMT and final assembly would occur in China, but the company updated the scenario so that "SMT operations for both [printed circuit board assemblies (PCBAs)] would be conducted either in Taiwan or in a third country, such as Malaysia or Indonesia," CBP said. The final assembly would still happen in China.

CBP said that the role of the PCBA in the fitness trackers is similar to that in other previous rulings. "Here, the electronic components from Taiwan and the Philippines are incorporated into the PCBAs by SMT to form the 'brain' of the device that enables the device to operate as intended," the agency said. It is the SMT operations that result "in a new and different product with an overall use and function different than any one function of the individual components." As an example, "Bluetooth transceivers are available to other customers and some are used in devices other than wearable smart devices," CBP said. "Only after they are assembled with other components on the PCBA do the Bluetooth transceivers serve Fitbit’s particular function of exchanging data gathered by the device’s sensors with the user’s paired mobile phone."

Even the final assembly in China "does not render the PCBAs into a product with a new name, character, or use," CBP said. As a result, "we find that the SMT operations constitute a complex assembly process that results in a substantial transformation of the electronic components from Taiwan and the Philippines into a new and different article of commerce with a new name, character, and use distinct from the components," the agency said. "The country of origin for the subject Fitbit devices will be where the PCBAs are manufactured by SMT, whether that be in Taiwan or in another country such as Malaysia or Indonesia."