OT:RR:NC:N1:105
Aaron Applebaum
Sidley Austin LLP
1501 K Street, N.W. Washington, DC 20005
RE: The country of origin of a water filtration system
Dear Mr. Applebaum:
In your letter dated June 15, 2023, on behalf of your client, Culligan International Company, you requested a country of origin ruling on a water filtration system.
The product under consideration is the A.O. Smith Direct Connect Single-Stage Carbon Block Under Sink Water Filtration System, which provides clean water directly from a faucet. The device connects to the cold water line leading to the sink. The filter purifies water and is said to reduce up to 99% of contaminates including lead, mercury, asbestos, pesticides, pharmaceuticals, chlorine, and chloramine.
The water filtration system is assembled in China using components manufactured in various countries, including the United States, Germany, and China. The assembly process involves screwing, gluing and pressing together 11 components during a 10-step process. The components include O-rings, a cap key, top cap, bottom cap, and sump from China, Neoperl flow control/regulator from Germany, and Emabond and carbon block from the United States. The carbon block is the most expensive portion of the system and also the primary filter for the device. The carbon block removes contaminants from water through a process called “adsorption.” Adsorption is a process in which contaminants are attracted to the surface of the carbon granules and become trapped in the small pores of the filtration media.
The assembly process in China starts with the assembly of the system head. This is a 3-step process that involves 6 workers. The second step involves assembling components together to complete the filter cartridge. The components assembled together during this process include the carbon block filter, Emabond, O-rings, cap key, top cap, Neoperl flow control/regulator, bottom cap, and sump. Labels are also applied to the product during this process. This is a 5-step process that involves 5 workers. The final assembly, which involves attaching the system head to the filter cartridge involves 2 workers. This is followed by the final retail packaging of the product. The assembly and packaging process in China involves 16 workers and 10 process steps (including packaging) that each take approximately 60 seconds to complete. These tasks include operating semi-automated equipment for assembly and testing steps (e.g., spin weld machine, leak testing equipment), basic kitting operations, and visual part inspections.
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 (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. The “country of origin” is defined in 19 CFR 134.1(b) 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. 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 regard to the country of origin of the water filtration system, it is our opinion that the assembly process performed in China is not considered complex and does not constitute a substantial transformation. The 10-step process predominantly involves screwing, gluing and pressing various components into place. The combining of these parts in China does not create a new and different article of commerce with a name, character, and use distinct from the individual components. Therefore, to determine the country of origin of the water filtration system, we rely on the origin of the carbon block, which is the essence of the water filtration system. It is the carbon block from the United States which requires considerable technical experience and customized equipment to produce. It is also the most expensive portion of the filtration system and is the item performing the filtering of the water.
Accordingly, the country of origin of the A.O. Smith Direct Connect Single-Stage Carbon Block Under Sink Water Filtration System will be the United States, which is where the carbon block is manufactured. As such, the water filtration system is excepted from the country of origin marking requirements of 19 U.S.C. 1304, however, you may want to contact the Federal Trade Commission to see if the product can be marked as a product of the United States.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the 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.”
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division