CLA-2-84:OT:RR:NC:N1:102
Lawrence R. Pilon
Rock Trade Law LLC
134 N LaSalle Street
Chicago, Illinois 60602
RE: The country of origin of certain steel valve body forgings
Dear Mr. Pilon:
In your letter dated October 15, 2020, on behalf of your client, IBCC Industries, Inc. (“IBCC”), you requested a ruling on the country of origin for certain steel valve body forgings.
The merchandise under consideration concerns finished steel valve body forgings imported by IBCC from China. At the time of importation, the forgings are designed to function as valve bodies and feature an inlet, an outlet and cavity for the valve seat. The finished valve bodies will be combined with other components in the United States to form a plug or check valve that can be actuated hydraulically, manually or pneumatically. The plug and check valves are said to be principally used in oil well installations.
The manufacture of each subject valve body begins in India from India produced ingot steel blocks. The ingots are heated and then drop forged to near net shape. After forging, the valve bodies are cooled before being re-heated in a furnace, after which they are quenched in a water solution to fully harden the steel. The forged valve bodies are then shot blasted and fettled, in order to present a smooth exterior surface finish. The shaped valve body is then removed from the forging press and loaded onto a trimming press that die-cuts around the edges to trim excess metal around the shape. Each forging is then marked with a specific part number, and other branding information. Each forging then undergoes an inspection. It is noted that at this point, each forging features the measurements of a finished valve body and is uniquely shaped with an inlet, an outlet, and a center cavity, in which the valve seat and other valve components will be installed.
Once imported into China, the inlet, outlet and center cavity of the valve body forgings are threaded and machined to specific dimensions, using a CNC machine. Once machined, rust preventative is applied to the forgings, which are then packaged for export to the United States of America.
With regard to your request for the appropriate country of origin marking for the
19 C.F.R. § 134.1(b) provides in pertinent part as follows:
Country of origin means 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;
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). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive, and assembly operations that are minimal will generally not result in a substantial transformation.
In our view, IBCC’s steel valve body forgings, which are forged in India, are not substantially transformed in China because the valve bodies finished in China do not emerge with a new name, character, and use different from that possessed by the valve bodies before undergoing finishing operations in China. IBCC’s valve body forgings made in India are of the same size and overall shape as the valve body forgings finished in China. The operations that occur in China, which consist of milling, threading, and rust prevention coating, do not transform the valve body forgings. The valve body forgings made in India feature the shape and design of the final valve body that are imported into the U.S. Furthermore, at the time of their exportation from India, the forgings are marked with the required part numbers, and other markings. These features indicate the forgings are already dedicated to only being used as components of a finished valve as there would be no other realistic use for them. Therefore, the country of origin of IBCC’s subject valve body forgings, which are used in plug or check valves, for origin and marking purposes, is India, at the time of importation into the United States.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. § 177).
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 Sandra Martinez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division