OT:RR:CTF:VS H326590 RB
Nigel F. Spork
Centor North America Inc.
966-130 Corporate Blvd
Aurora, Illinois 60502
RE: Hinges; Country of Origin; Section 301 Measures
Dear Mr. Spork:
This is in response to your correspondence, dated September 23, 2022, in which you request a ruling concerning the country of origin of the “Centor E3CICS Concealed Intermediate Set” (“E3CICS”). Your request, submitted as an electronic ruling request on February 1, 2020, and then resubmitted on September 23, 2022, was forwarded to this office from the National Commodity Specialist Division for review. Our ruling is set forth below.
FACTS:
Centor North America Inc. (“Centor”) is headquartered in Aurora, Illinois. Centor imports the E3CICS into the United States from Country B. The E3CICS is basically a set comprised of three components: the carrier, floor guide, and middle hinge, and is used to mount and operate large folding doors. The carrier includes a hinge with two sets of roller wheels at the top. The floor guide includes a hinge with a triangular base with two roller bearings at the bottom. The middle hinge is simply a hinge. The three components along with screws are packaged together in one box and sold to window and door manufactures for use in large folding doors.
Centor states that the three components that make up the E3CICS are assembled in Country B, using bearings from Country A and all other components are from Country C. Based on the information provided, the hinge roller bearings and thrust bearings are manufactured in Country A using specialized bearing manufacturing equipment, whereas the Country C components include the hinge carrier pin, collar, spring, plunger, fixed pin, circlip, roller bearings, carrier body, three separate hinge plates each with an attached barrel, hinge caps, the floor guide and screws. All the components are shipped to Country B where they undergo assembly using special tooling to form the final components of the E3CICS. The documentation shows that the carrier is assembled in 21 assembly steps. The floor guide is assembled in17 assembly steps, and the middle hinge is assembled in 4 assembly steps.
You submitted a detailed list of the steps and photographs of the assembly process of the E3CICS.
ISSUE:
What is the country of origin of the E3CICS for the purposes of applying Section 301 trade remedies?
LAW AND ANALYSIS:
The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(f), Harmonized Tariff Schedule of the United States (“HTSUS”). Among the subheadings listed in U.S. Note 20(f) of Subchapter III, Chapter 99, HTSUS, is 8302.10.6090, HTSUS, where these goods are classified.
When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). In deciding 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. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occurred, and the essence of the article is considered. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982), aff’d 702 F.2d 1022 (Fed. Cir. 1983).
In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of “substantial transformation.” Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight. All of the components of the Generation II flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States where they were assembled into the finished Generation II flashlight.
The court reviewed the “name, character and use” test utilized in determining whether a substantial transformation has occurred and noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. at 226, 542 F. Supp. at 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, 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 reaching its decision in Energizer, the court expressed the question as one of whether the imported components retained their names after they were assembled into the finished Generation II flashlights. The court found “[t]he constitutive components of the Generation II flashlight do not lose their individual names as a result [of] the post-importation assembly.” The court also found that the components had a pre-determined end-use as parts and components of a Generation II flashlight at the time of importation and did not undergo a change in use due to the post-importation assembly process. Finally, the court did not find the assembly process to be sufficiently complex as to constitute a substantial transformation. Thus, the court found that Energizer’s imported components did not undergo a change in name, character, or use as a result of the post-importation assembly of the components into a finished Generation II flashlight. The court determined that China, the source of all but two components, was the correct country of origin of the finished Generation II flashlights under the government procurement provisions of the TAA.
In the instant case, Centor states that the three components that make up the E3CICS are assembled in Country B, using bearings from Country A and all other components from Country C. The Country C components include the hinge carrier pin, collar, spring, plunger, fixed pin, circlip, roller bearings, carrier body, three separate hinge plates each with an attached barrel, hinge caps, the floor guide and screws. As in Energizer, the identity of the E3CICS components remain intact and no substantial change in name, character or use occurs upon assembly in Country B. The component parts remain unchanged by use in the E3CICS. The various hinges of the carrier, middle hinge and floor guide do not change in form. Each part of the various component parts does not change in size, density, shape, and the appearance remains basically the same. In comparison to the manufacture of the individual components which largely stem from Country C, the assembly process is rather simple. Accordingly, we find that the E3CICS, as described, is not substantially transformed in Country B, and it remains a product of Country C.
HOLDING:
Based on the information provided, the country of origin of the E3CICS for purposes of Section 301 trade remedies is Country C.
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 [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