OT:RR:NC:N2:201
Ms. Anahi M. Czeszewski
C.H. Robinson International, Inc.
1501 N. Mittel Blvd., Suite B
Wood Dale. IL 60191
RE: The country of origin of vehicles assembled in Mexico from Chinese components.
Dear Mrs. Czeszewski:
In your letter dated March 23, 2021 you requested a country of origin ruling determination on an off-road vehicle behalf of your client, CFMOTO Powersports, Inc., located in Plymouth, MN.
The merchandise under consideration has been identified as the Uforce 1000 Utility Terrain Vehicle (UTV).
In your request you state that the Uforce 1000 will go through several workstations and assembly processes. Per your request, we will not go into the details of this processing, but some of these assembly processes include:
Frame, Engine and Front and Rear Axle Assembly
Rear Suspension Assembly, which includes installation of left and right rocker arm subassemblies, the rear sway bar, and mounting brackets for shock absorbers and brake calipers.
Assembly of Main Cable and Middle functional parts of vehicle body, which includes the radiator and cooling system, fuel tank, voltage regulator, steering wheel and system related components, Continuous Variable Transmission (CVT), and air filters.
Installation of Seat Belts, Top Cab Assembly, Dashboard, Upper Panel, and Headlight Sub-Assembly.
The fabrication of the vehicle frame, which is its own subassembly made of 163 individual parts which are welded, finished, coated, and other processes required for use as the main frame for the Uforce 1000.
In determining 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). The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. 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. Whether an operation is complex and meaningful depends on the nature of the operation, including the number of components assembled, number of different operations, time, skill level required, attention to detail, quality control, the value added to the article, and the overall employment generated by the manufacturing process.
You claim that the Mexican assembly operations results in a substantial transformation of the imported parts, and warrants a determination that Mexico is the country of origin for purpose of the 301 Investigation against China. We agree.
In HRL H022169, CBP found that an imported mini-truck glider was substantially transformed as a result of assembly operations performed in the U.S. to produce an electric mini-truck. The decision was based on the fact that, under the described assembly process, the imported glider lost its individual identity and became an integral part of a new article possessing a new name, character, and use. In addition, a substantial number of the components added to the imported glider were of U.S. origin. The glider was assembled with approximately 87 different components, 68 of which were of U.S. origin. The batteries, charger, and gear box were of U.S. origin, and other major parts, including the electric motor and brakes, were of foreign origin.
As stated in HRL H022169 (citing HRL 731076, dated November 1, 1988), CBP considered the manufacture of an automobile more than a mere simple assembly operation. The assembly process here is complex and time-consuming. Furthermore, in HRLs H118435, H133455, and H022169, it was found that the assembly of the U.S. and imported components was necessary for the vehicles to function, and that the assembly resulted in a substantial transformation. We find the same to be true in this case. The frame and other components cannot function as an off-road vehicle on their own.
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.
When considering a product that may be subject to antidumping, countervailing, or other safeguard measures, the substantial transformation analysis is applied to determine the country of origin. See 19 C.F.R. § 102.0; HQ 563205, dated June 28, 2006; see also Belcrest Linens v. United States, 741 F.2d 1368, 1370-71 (Fed. Cir. 1984) (finding that “the term ‘product of’ at the least includes manufactured articles of such country or area” and that substantial transformation “is essentially the test used…in determining whether an article is a manufacture of a given country”).
The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
It is the opinion of this office that, based on the information discussed and the rulings cited, we find that the assembly is sufficiently complex enough to constitute a substantial transformation and results in an article with a new name, character, and use, such that the country of origin for the Uforce 1000 is the Mexico for purposes of the 301 Investigation against China.
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 Matthew Sullivan at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division