CLA-2-94:OT:RR:NC:N4:463
Lisa Murrin
Senior Consultant, US Advisory Services
Expeditors Tradewin, LLC
795 Jubilee Drive
Peabody, MA 01960
RE: The country of origin of a foam mattress.
Dear Ms. Murrin:
In your letter dated November 6, 2019, you requested a country of origin ruling on behalf of your client, Legends Furniture, Inc., (“Legends Furniture”) for a foam mattress.
FACTS:
Legends Furniture intends to import foam mattresses manufactured in Vietnam with some Chinese components. You provided a bill of materials and an illustrated, step-by-step description of the manufacturing process.
CHINESE COMPONENTS:
Zippered outer mattress cover
Woven fire retardant inner fabric
Adhesive glue
Insert card
VIETNAMESE COMPONENTS:
2” gel memory foam layer
6” base foam layer
Polyethylene bag
Desiccant
Carton
The following operations are performed in Vietnam:
Fire retardant inner fabric is cut to size and sewn.
Foam precursors of Singaporean and Chinese origin are blended and poured.
After the foam expands and cures, it is cut into foam buns and labeled.
Impression Load Deflection (ILD), density and decompression tests are performed.
Foam edges are squared and cut to size.
Foam is cut to specific heights.
Foam surface is modified (egg crate and surface ventilation).
Adhesive is applied to the foam layers and the layers are assembled.
Fire retardant inner cover is installed over the foam mattress and sewn closed.
Outer cover is installed over the inner cover and zippered closed.
Finished mattress is inserted into a polyethylene bag, compressed, rolled and packaged.
ISSUE:
What is the country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for the subject merchandise will be 9404.21.0013, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: Mattresses: Of cellular rubber or plastics, whether or not covered: Of a width, exceeding 91 cm, of a length exceeding 184 cm, and a depth exceeding 8 cm.” The rate of duty will be 3% ad valorem.
COUNTRY OF ORIGIN AND CHINA SECTION 301 APPLICABILITY Section 134.1(b), Customs Regulations (19 CFR 134.1(b)) defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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.” A substantial transformation occurs when articles lose their identity and become articles having a new name, character, or use.
Generally, the U.S. Court of International Trade has determined whether a substantial transformation has occurred by asking whether the manufacturing or processing substantially transformed the foreign materials in question into an article having a name, character or use different from the name, character, or use of those materials before such processing.
Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1317 (C.I.T. 2016) (quoting
Precision Specialty Metals, Inc. v. United States, 116 F. Supp. 2d 1350, 1364 (C.I.T. 2000)).
The primary focus of the substantial transformation test is whether the work or material added to an article in another country changed the character or use of the article. See Energizer, 190 F.
Supp. 3d at 1318. A party can show a change in the character of materials added during processing with evidence that the processing substantially altered the form of those materials.
Id. at 1318.
In Headquarters Ruling 731433, December 15, 1989, U.S. Customs considered whether vinyl shells from Taiwan underwent a substantial transformation in the U.S. when assembled with domestic foam and fiber into completed waterbeds. In the U.S., foam and fiber were cut, sewn, and inserted into the vinyl cavity and the shell was heat-sealed. Customs ruled that the U.S. assembly process substantially transformed the vinyl shell.
In this case, the Vietnamese factory mixes, pours, cures and cuts the raw materials used to make the foam layers (toluene diisocyanate, polypropylene glycol, a catalyst and silicon oil) into foam buns. It then cuts the foam buns to specific heights, modifies the surface (egg crate and surface ventilation), applies adhesive and stacks the foam layers to create mattress cores. Next, a fire retardant cover is sewn around the mattress core and a Chinese outer cover is placed over the mattress core and zippered shut to complete the mattress. It is subsequently bagged, rolled and boxed for export to the U.S.
We note that the principal and final manufacturing operations used to produce the finished foam mattress are performed in Vietnam. The many-step operation requires specialized equipment and a mix of moderately skilled and unskilled labor. All of the materials used to produce the finished mattress, including the Chinese mattress cover, undergo a chapter shift in Vietnam, which is one measure of the extent of those manufacturing operations. The foam core, which provides both the form and structure to the mattress, is produced in Vietnam. The Chinese mattress cover, which serves to enhance the completed mattress’s functionality and longevity, as well as to make the finished mattress acceptable as a consumer product, accounts for only 20% of the total cost of production.
Based upon the foregoing, the manufacturing process substantially transforms all of the components into a new and different article of commerce, a foam mattress, in Vietnam.
In Headquarters Ruling H301619, dated November 6, 2018, U.S. Customs and Border Protection (CBP) noted that, “When determining the country of origin for purposes of applying current trade remedies under Section 301, Section 232, and Section 201, the substantial transformation analysis is applicable.” The Section 301 statute, the United States Trade Representative (USTR) action thereunder, and CBP’s interpretation of such action, all reflect that the current China Section 301 duties apply only to “products of China.” As a “product of Vietnam,” the foam mattress is not subject to China Section 301 trade remedy duties.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR 177).
The country of origin decision set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in 19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect.
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Seth Mazze at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division