OT:RR:CTF:VS H313537 AP
Ms. Melissa Fox
Trade Compliance Services
Vandegrift Forwarding Company, Inc.
20 South Charles Street, Suite 501
Baltimore, MD 21201
RE: Country of origin of finished golf club drivers
Dear Ms. Fox:
This is in response to your August 4, 2020 ruling request, filed on behalf of Cobra Golf Incorporated (“Cobra Golf” or “importer”), regarding the country of origin of golf club drivers identified as FMAX, SZ and 2021 SZ.
FACTS:
Cobra Golf designs, manufactures, and markets golf products and services. The subject goods are finished golf club drivers classifiable in subheading 9506.31.00, Harmonized Tariff Schedule of the United States (“HTSUS”). The FMAX, SZ, and 2021 SZ golf club drivers are assembled in China with heads, shafts, and grips sourced from various countries as follows:
Model
Head
Shaft
Grip
Assembly
FMAX
Taiwan
China
China
China
SZ
Taiwan
Bangladesh
China
China
2021 SZ
Taiwan
Vietnam
China
China
You explain that the production process for the driver head in Taiwan consists of treating, melting, and casting raw titanium using a wax injection mold. During the wax injection process, wax is injected into a tooling or mold to form the shape of the finished head. The titanium material of Taiwan origin is melted in a high temperature furnace and is then cast into the de-waxed, pre-heated shell clusters. After the casting is complete, the shell clusters undergo a de-shelling process and are broken into individually cast golf heads. Each titanium golf head cast is sandblasted and polished into the final size and shape of the corresponding golf head model. The titanium driver golf heads are then inspected, packed, and shipped from Taiwan to China for the final cosmetic finishing operations.
The material composition of the driver shaft is: carbon fiber (75 percent of Japanese origin) and resin (25 percent of Chinese origin). The graphite shaft is manufactured in China (model FMAX), Bangladesh (model SZ) and Vietnam (model 2021 SZ) by wrapping sheets of graphite composite material around a steel mandrel. The composite sheets are cut into different sizes and shapes called flags. These sheets are wrapped in various directions around the shaft depending upon the design of the shaft. The wrapping process is done by hand using computer-controlled alignment rollers. The completed shaft is shrink-wrapped in a cellophane material and heated in an oven to approximately 250 degrees to bond the individual wraps together. The shaft is then cooled, the wrap is removed, and the shaft is sanded to exact frequency tolerances.
The driver grip is made in China through an injection molded process. The grip is made from rubber compound of U.S. origin.
The manufactured head, shaft, and grip are assembled into a golf club in China.
ISSUE:
What is the country of origin of the FMAX, SZ and 2021 SZ golf club drivers?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides, in relevant part:
(a) Marking of articles Except as hereinafter provided, 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 manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article.
Part 134, U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R.
Part 134), implements the country of origin marking requirements of 19 U.S.C. § 1304. Title 19, Section 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 this part; ….”
A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, or use, which differs from the original material subjected to the process. In Nat’l Hand Tool Corp. v. United States, 16 CIT 308, aff’d per curiam, 989 F.2d 1201 (Fed. Cir. 1993), the Court of International Trade determined that hand tool components, which were cold-formed and hot-forged in Taiwan into their final shape, with post-importation processing such as heat treatment and electroplating, and assembly occurring in the United States, did not undergo substantial transformation in the United States. There was no change in name because each article as imported had the same name in the completed tool. There was no change in character because the articles remained the same after heat treatment, electroplating, and assembly in the United States. The use of the imported articles was predetermined at the time of entry – each component was intended to be incorporated in a particular finished mechanics’ hand tool, except for one exhibit with a dual use. The court rejected the importer’s claim that the value added in the United States was relatively significant to the operation in Taiwan so that substantial transformation should be found, determining that such a finding could lead to inconsistent marking requirements for importers who perform exactly the same processes on imported merchandise but sell at different prices.
Headquarters Ruling Letter (“HQ”) 734256, dated July 1, 1992, explained that a simple assembly of already finished components into golf clubs did not result in a substantial transformation:
… the making of the golf club is a simple assembly process of basically finished parts. We note that there is a hole on the top of the head so no drilling is necessary. The combining of the head and shaft is a relatively simple operation which does not take a great deal of time and skill and not a complex assembly. Basically, all that is needed to make the finished club is to insert the shaft into the head and to glue them together … Although U.S. made grips are added to the golf clubs, the grips are much less significant components as compared with the heads and shafts and their insertion onto the golf clubs is fairly simple. In other words, we find because the most important components are foreign and the assembly process is very simple there is no substantial transformation of the shafts and heads.
The ruling concluded that if heads made in Taiwan and Japan, and shafts made in Japan were not substantially transformed by assembly in the United States, the country of origin of each of these components had to be separately marked to indicate its own country of origin.
HQ 562778, dated Sept. 5, 2003, concluded that for clubs assembled in the United States where both the shaft and the head were made in China or Taiwan, no substantial transformation occurred in the United States and the country of origin of each foreign component had to be indicated on the club or the container. If the head and the shaft were made in two different countries, each country of origin had to be indicated in the marking such as “shaft made in China” and “head made in Taiwan.”
However, in HQ 560693, dated Mar. 6, 1998, golf clubs were assembled in Taiwan using heads cast in either Taiwan or China, shafts manufactured in either Korea or the United States, and rubber grips manufactured in Thailand. The ruling held that where the driver head or shaft was of the same origin as the country where the assembly of the clubs occurred, the country of origin of the clubs was the country where the assembly was performed. That is, assembling golf clubs in Taiwan using club heads of Taiwanese-origin and imported shafts and grips, substantially transformed the imported components into products of Taiwan. Accordingly, the country of origin of the assembled golf clubs was Taiwan.
HQ 563286, Aug. 25, 2005, concluded that when imported heads and grips, and U.S.-made shafts were used to make finished golf clubs, the U.S. operations would result in a substantial transformation of the foreign heads. When shafts made in Country A or Country B, and heads made in Country A were used to produce finished golf clubs in the United States, the U.S. processing would not result in a substantial transformation of the imported components regardless of the origin of the grip. Under this scenario, the clubs needed to be marked to indicate the origin of the major components. For example, “Head made in Country A, Shaft made in Country B.”
The instant FMAX driver head manufactured in Taiwan is assembled into a golf club in China with the FMAX shaft manufactured in China, and the FMAX grip manufactured in China. Consistent with HQ 560693 and HQ 563286, where the driver head or shaft is of the same origin as the country where the assembly of the golf club driver occurs, the country of origin of the club is the country of its assembly. Here, the FMAX shaft is manufactured in China, where the assembly of the FMAX golf club driver occurs, which substantially transforms the Taiwanese driver head into a product of China. Accordingly, the country of origin of the FMAX golf club driver is China.
The instant SZ driver head of Taiwanese origin is assembled into a golf club in China with the SZ shaft of Bangladesh origin and the SZ grip of Chinese origin. The instant 2021 SZ head of Taiwanese origin is assembled into a golf club in China with the 2021 SZ shaft of Vietnamese origin and the 2021 SZ grip of Chinese origin. Consistent with HQ 734256, HQ 562778, and HQ 563286, the SZ head/shaft and the 2021 SZ head/shaft are not manufactured in China and the “relatively simple” assembly operations in China will not result in a substantial transformation of the driver head and shaft in China. Accordingly, the SZ golf club driver must reflect that the country origin of the SZ driver head is Taiwan and the country origin of the SZ shaft is Bangladesh, and the 2021 SZ golf club must reflect that the country of origin of the 2021 SZ driver head is Taiwan and the country of origin of the 2021 SZ shaft is Vietnam.
HOLDING:
The country of origin of the FMAX golf club driver is China.
The countries of origin of the SZ golf club driver are Taiwan (the country of origin of the driver head) and Bangladesh (the country of origin of the driver shaft).
The countries of origin of the 2021 SZ golf club driver are Taiwan (the country of origin of the driver head) and Vietnam (the country of origin of the driver shaft).
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