OT:RR:CTF:VS H309758 EGJ
Brenda Jacobs
Jacobs Global Trade & Compliance LLC
4134 N. River Street
McLean, VA 22101
RE: Country of Origin Marking of a Hair Curling Iron
Dear Ms. Jacobs:
This is in response to your letter, dated January 31, 2020, requesting a prospective ruling on behalf of the Hong Kong Productivity Council (“HKPC”) regarding the country of origin marking of a hair curling iron. You note that the HKPC is an organization created by statute to support small and medium sized enterprises in Hong Kong, including export-oriented manufacturers. As such, you state that HKPC is an entity with a direct and demonstrable interest in the question presented in your request letter.
FACTS:
The subject merchandise is a hair curling iron which is comprised of more than 40 components made up of different materials, including molded plastic, metal, and wire. You note that the individual parts will be manufactured and assembled in both China and Vietnam. You state that the manufacturing steps are as follows:
The plastic components of the curling iron are formed by injection molding;
The metal barrel and flipper are cut, punched, and stamped into their finished shapes;
The metal barrel and flipper are sand blasted and painted;
The internal heater assembly is built from components such as a thermal fuse, mica sheet, and a lead wire;
The bare printed circuit board is populated with discrete components to form the printed circuit board assembly (“PCBA”) which controls the on/off/high/low settings on the curling iron;
The subassemblies are assembled together into the finished curling iron, which involves inserting the heater assembly into the barrel, inserting the PCBA, soldering the lead wires, attaching the power cord, and performing the final assembly of the hardware and the plastic components; and finally,
The curling iron is tested, inspected, cleaned, and then packaged in its final retail packaging.
You have asked us to determine the country of origin for the instant curling iron under three potential scenarios. In Scenario 1, the metal hardware portions of the curling iron would be manufactured, sandblasted, and painted in China. The internal PCBA and heater assembly would be assembled in China, and the heater assembly would be inserted into the barrel in China. Then, these parts would be shipped to Vietnam. In Vietnam, the plastic components would be created by injection molding. The plastic components and subassemblies from China would then be combined into the finished curling iron in Vietnam.
In Scenario 2, the PCBA would be populated in Vietnam rather than China. However, all of the remaining steps would be the same as in Scenario 1. In Scenario 3, the hardware, heater assembly, and the plastic components will be manufactured in China. However, the PCBA will be populated and the final assembly will take place in Vietnam.
ISSUE:
For each of the three aforementioned scenarios, what is the country of origin of the curling iron?
LAW AND ANALYSIS:
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. § 1304) provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, 302, C.A.D. 104 (1940).
The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134). Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as the country of manufacture, production or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of the marking laws and regulations. A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use which differs from the original material subjected to the process. United States v. Gibson Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments, Inc. v. United States, 681 F.2d 778, 782 (1982).
The question presented is whether the parts from China are substantially transformed when they are shipped to Vietnam and are assembled together with the parts from Vietnam. In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984).
Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States (“Uniroyal”), 3 C.I.T. 220, 542 F. Supp. 1026 (1982), aff’d 702 F. 2d 1022 (Fed. Cir. 1983). In addition, the U.S. Court of International Trade (“CIT”) noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1319 (Ct. Int’l Trade 2016), citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
In Headquarters Ruling Letter (“HQ”) H303864, dated December 26, 2019, an electric motor from China was shipped to Mexico for assembly with the impeller, the seal, and the plastic housing to form the finished pump assembly. In that case, we noted that the assembly was rather simple – it involved press fitting the parts into each other. Moreover, the electric motor was the most expensive and substantive part of the finished pump assembly. We found that it imparted the “very essence” of the pump assembly, as it turned the impeller and moved the fluid through the pump.
Similar to the electric motor in HQ H303864, we find that the barrel, flipper, and heater constitute the “very essence” of the finished curling iron. These are the elements of the curling iron which actually heat and curl the hair. We also note that their end use is predetermined before they are shipped to Vietnam, and after they are assembled together with the plastic and other components in Vietnam, their use as parts of a hair curling iron remains unchanged.
You state that the plastic components and the PCBA are also important. You state that the plastic components form the handle and give the curling iron its final shape. You also note that the PCBA controls both the power and the heat settings for the finished curling iron. We agree that the plastic components and the PCBA are important components of the curling iron. Indeed, several rulings have recently been issued which state that the country of origin of the final product is the country where the PCBA is assembled. See, e.g. New York Ruling Letter (“NY”) N311826 (origin of a USB charging receptacle), dated June 2, 2020; NY N310880, dated April 14, 2020 (origin of a docking station with ports for multiple devices); and NY N310827, dated April 8, 2020 (origin of a wireless doorbell speaker). However, we note that in all of these rulings we found that the PCBA was the very essence of the finished article. In NY N311826 and NY N310880, the relevant ports and connectors were attached directly to the PCBA to facilitate a connection between devices. In NY N310827, all of the elements of the wireless doorbell speaker were directly attached to the PCBA. In all of these rulings, the PCBA and its attachments were encased in a simple plastic housing.
Conversely, the PCBA in this case plays a subsidiary role to the metal barrel, flipper, and the heating element. The PCBA serves as the on/off switch and the heat level setting for the finished curling iron, and does not provide the basic functioning of the product which is to style hair. Therefore, because of its subsidiary role in the functioning of the finished product, the country of origin of the PCBA assembly does not determine the country of origin in this case. Rather, we take the view that the barrel, the flipper, and the heating subassembly are what actually curl the hair. As their end use is predetermined and the subsequent assembly is simple, we find that they are not substantially transformed when they are assembled with the other parts into the finished curling iron in Vietnam. For these reasons, we find that the country of origin of the hair curling iron will be China for all three of the potential manufacturing scenarios set forth above.
HOLDING:
Based on the facts of this case, we find that under Scenarios 1, 2, and 3, the country of origin of the hair curling iron is China.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a CBP field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch