By George W. Thompson
Now here’s something that grabbed my eye – a government procurement country of origin determination regarding billiard tables. U.S. Customs and Border Protection concluded that the assembly of billiard tables in the United States constituted a substantial transformation, so the finished products have U.S. origin and are eligible for purchase by the Federal government.
Designed and assembled in the U.S.
The ruling covers four different styles of table. Although the details vary for each, they all undergo assembly of the base frame, legs and slate, attachment of billiard cloth to the slate and installation of rails, aprons and the gully return system. Depending on the model, between 72 and 91 components, of mixed foreign and domestic origin, are installed in a multi-step process that requires a high degree of skill. The billiard tables were designed in the U.S.
Given the number of components and complexity of the assembly process, CBP unsurprisingly found that it results in a substantial transformation because “the imported components lose their individual identities and become an integral part of the billiards tables as a result of the U.S. assembly operations and combination with U.S. components; and that the components acquire a different name, character, and use as a result of the assembly operations performed in the U.S.” Also weighing in favor was the fact “that the engineering, design, and development of the tables occur in the U.S.”
What distinguishes this case from run-of-the-mill assembly operations is that the process takes place at the customer’s location. Because the billiard tables cannot be shipped in completed form, they cannot be assembled at the vendor’s facility. This seems to have made no difference to CBP’s analysis or outcome.
Rule for billiard tables should be no different for any other product
Of course, it should be irrelevant where in the purported country of origin the assembly takes place. But think about this: the rule for billiard tables should be no different for any other product, and will be equally applicable to (for example) installation of networked data systems at the customer’s facility.
Nor should it matter who performs the assembly.
While I acknowledge CBP’s point about the level of skill required, I wonder whether the outcome would have been the same if the customer was responsible for assembling the components. That is, can the “article” covered by a 19 C.F.R. Part 177 procurement origin ruling request be defined as the post-assembly product, even if sold to the government in its pre-assembled form? That, to me, is one of the open questions stemming from this ruling.
The other is why the Federal government is in the business of purchasing billiard tables in the first place.
The text of the ruling is here: http://www.gpo.gov/fdsys/pkg/FR-2015-10-21/pdf/2015-26752.pdf.
