A product is considered to be ‘substantially transformed’ if, as a result of a processing step, it becomes a new commercial product with its own name, character or intended use. This concept determines whether a product is deemed to be TAA-compliant.
The assessment is not carried out schematically, but always within the context of the entire manufacturing process. The decisive factor is whether the final substantial processing actually brings about a functional change or merely constitutes final assembly or simple further processing. It is precisely here that the difficulty in drawing the line often lies in practice.
This is particularly relevant in the case of IT hardware, as many components are prefabricated globally and are only assembled into a complete system at a later stage. The rules of thumb: mere repackaging or simply plugging together prefabricated parts is not sufficient. Complex integration, the interaction of several assemblies, or the installation of firmware that makes a module functional, on the other hand, can shift the point of origin.
In practice, consideration is also given to whether the intended use of the product changes significantly. The more a product only becomes usable as a result of the final production step, the more likely it is that a significant change can be assumed.
