CLA-2-84:OT:RR:NC:N1:104
John A. Bessich, Esq.
Follick & Bessich
33 Walt Whitman Road, Suite 310
Huntington Station, NY 11746
RE: The country of origin of a Miter Saw
Dear Mr. Bessich:
In your letter dated September 20, 2021, you requested a country of origin ruling on behalf of your client, Stanley Black & Decker, Inc. (Stanley Black & Decker).
The Stanley Black & Decker Miter Saw, model number DWS780TY3x, is a double bevel, sliding compound miter power saw. It is a circular saw that is mounted on a portable base and powered by an electric motor. It is used to make precision cuts across a workpiece, generally a wood board, trim piece, or molding.
The applicable subheading for the Stanley Black & Decker Miter Saw, model number DWS780TY3x, will be 8465.91.0047, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials: Other: Sawing machines…Woodworking machines: Other: Miter saws.” The rate of duty is 3 percent ad valorem.
You describe a scenario wherein portions of manufacturing take place in China, the United States, and Taiwan. In China, the following subassemblies are produced and shipped to Taiwan: the saw blade and saw wrench; a switch; a dust bag, a clamp; the left, base, and right fences; a lower guard; the right and left extension tubes; a miter table base, and the support housing. Components such as bearings, a belt, a gasket, springs, a pawl, and a clamp are sourced from the United States and shipped to Taiwan. The motor and arm subassemblies are made in Taiwan. Accordingly, the aforementioned subassemblies and components are assembled in Taiwan and then the miter saw is packaged for export to the United States. You contend that the miter saw is substantially transformed in Taiwan by the addition of the motor and arm subassemblies and maintain that the assembly process performed in Taiwan is complex as well.
Regarding your request for the appropriate country of origin of the miter saw, 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. As stated in HQ 735009, dated July 30, 1993, “The country of origin is the country where the article last underwent a “substantial transformation,” that is, processing which results in a change in the article's name, character, or use.”
In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade ("CIT") interpreted the meaning of "substantial transformation" as used in the Trade Agreements Act of 1979 ("TAA") for purposes of government procurement. In Energizer, the court reviewed the "name, character and use" test in determining whether a substantial transformation had occurred in determining the origin of a flashlight and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff'd, 702 F.2d 1022 (Fed. Cir. 1983), that when "the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change." Energizer at 1318. In addition, the court noted that "when the end-use was pre-determined at the time of importation, courts have generally not found a change in use." Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff'd 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article.
Based upon the facts presented, it is the opinion of this office that the manufacturing process in China renders the end-use of the subassemblies predetermined as they could not be used for any other purpose. Further, the addition of the motor and arm subasssemblies (as well as the components from the United States) performed in Taiwan would not substantially transform the miter saw into a new and different article of commerce with a name, character, and use distinct from that of the exported good; nor are the assembly operations complex enough to transform the miter saw into a new article. Therefore, the country of origin of the Stanley Black & Decker Miter Saw, model number DWS780TY3x, will be China.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8465.91.0047, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8465.91.0047, HTSUS, listed above.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current. 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 Denise Hopkins at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division