Lexmark printers redefined as ‘Made in Mexico’
June 27, 2024
CBP’s new ruling favours Lexmark, designating their MS/MX and CS/CX series printers as Mexican-origin products.
In a significant development for Lexmark International Inc., the U.S. Customs and Border Protection (CBP) has issued a new ruling determining the country of origin for the company’s MS/MX and CS/CX series printers. This ruling, outlined in Headquarters Ruling Letter H333699 dated June 6, 2024, is crucial for both marking and trade remedy applications, establishing Mexico as the country of origin for these products.
Previously, CBP had ruled that these Lexmark printers were products of China, primarily due to the assembly of key components, known as printer transports, in China. However, Lexmark presented a revised production process indicating significant manufacturing changes. Key subassemblies—namely the imaging unit, developing unit, and toner cartridge—are now produced in Mexico, substantially altering the assembly and functionality of the printers.
With the removal of these key subassemblies, the printer transports from China have diminished functionality upon arrival in Mexico. The production of the PCBA (Printed Circuit Board Assembly) in Mexico, along with the three major subassemblies, now accounts for 61% of the manufacturing time by labour hours, compared to 37% in China.
CBP applied the substantial transformation test to determine the country of origin. This test assesses whether a product emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. CBP’s analysis considered the extent of operations performed, the complexity of the assembly, and the integration of components. In this case, the integration of Mexican-made subassemblies significantly altered the functional essence of the printers, supporting the conclusion that the final assembly and functionality were predominantly imparted by the manufacturing processes in Mexico.
For trade remedy purposes, the ruling confirms that the Lexmark printers, under the revised production process, should be considered products of Mexico. This determination exempts these printers from the additional tariffs imposed on Chinese products under Section 301 of the Trade Act of 1974. Regarding marking requirements, the ruling mandates that the printers be marked as products of Mexico, ensuring compliance with U.S. regulations that require foreign goods to be labelled with their country of origin.
Categories : World Focus
