CLA-2-85:OT:RR:NC:N2:220
Joseph Spraragen
Grunfeld, Desiderio, Lebowitz, Silverman, Klestadt LLP
599 Lexington Avenue, Floor 36
New York, NY 10022-7648
RE: The country of origin of a stepper motor
Dear Mr. Sprargen:
In your letter dated July 9, 2019, on behalf of Lin Engineering, Inc., you requested a ruling on the country of origin and application of Section 301 additional duties for a stepper motor.
The merchandise under consideration is identified as an electric stepper motor, which you describe as a brushless, synchronous electric motor that converts digital pulses into mechanical shaft rotation. The stepper motor components consist of a stator, a rotor, a pulley, end caps, a shaft, a bearing, various hardware, wire, connectors and insulators.
In your request you provide three assembly scenarios for the various components, discussed hereafter, and assert that in each scenario the stepper motor produced is not subject to Section 301 measures for products of China because in each scenario the Chinese components undergo a substantial transformation as a result of the assembly process, which is detailed hereafter. We disagree in part.
In the first scenario, you state the stator and the rotor are manufactured in Japan by stamping the steel slits from coils that are then pressed into a stator and rotor stack. The balance of the stepper motor components (the pulley, the bearing, the shaft, the end caps, etc.) are said to be sourced from China. The assembly of the stepper motor components into a functional motor is performed in China through operations such as the machining the stator and rotor, painting, winding of the wire, affixing the shaft and bearing onto the rotor, soldering the wire onto the connector board, screwing the housing and endcaps together, etc.
In the second scenario, you state the stator and the rotor are manufactured in China by stamping the steel slits from coils that are then pressed into a stator and rotor stack. The wire is sourced from Taiwan and the bearing from Thailand. The balance of the stepper motor components (the pulley, the shaft, the end caps, hardware, etc.) are said to be sourced from Vietnam. The assembly of the stepper motor components into a functional motor is performed in Vietnam through operations such as the machining the stator and rotor, painting, winding of the wire, affixing the shaft and bearing onto the rotor, soldering the wire onto the connector board, screwing the housing and endcaps together, etc.
In the third scenario provided, you state the stator and the rotor are manufactured in Vietnam by stamping the steel slits from coils that are then pressed into a stator and rotor stack. The wire, the pulley, the shaft, the bearing, and the hardware is sourced from China. The balance of the stepper motor components (the end caps, insulators, etc.) are said to be sourced from Vietnam. The assembly of the stepper motor components into a functional motor is performed in Vietnam through operations such as the machining the stator and rotor, painting, winding of the wire, affixing the shaft and bearing onto the rotor, soldering the wire onto the connector board, screwing the housing and endcaps together, etc.
With regard to your request for the appropriate country of origin of the stepper motor, 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, the stator and rotor impart the essence of the finished stepper motor. Based on the provided description of the assembly operations, the stator and rotor are not substantially changed by the addition of the remaining motor components nor are the assembly operations complex enough so as to transform the stator and rotor into a new article. Therefore, it is the opinion of this office that the stepper motor described in the first scenario is country of origin Japan and the third scenario is country of origin Vietnam, neither of which are subject to Section 301 trade remedies. However, in the second scenario the country of origin of the stepper motor is China and is subject to the Section 301 trade remedies.
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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division