CLA-2-84:OT:RR:NC:N1:104
Jeffery G. Richardson
Miller, Canfield, Paddock and Stone, P.L.C.
840 W. Long Lake Road, Suite 150
Troy, MI 48098
RE: The country of origin of an injection type mold.
Dear Mr. Richardson:
In your letter dated September 23, 2021, you requested a country of origin ruling on behalf of your client, Circle 5 Tool & Mold LP (“Circle 5”). Descriptive information was provided with your request.
The item under consideration is a steel mold, model number 3847, which will be used within a plastic injection molding machine. The mold produces a seat front left-half/right-half cover and a right-rear seat cushion.
The applicable subheading for the mold, model number 3847, will be 8480.71.8045, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Molding boxes for metal foundry; mold bases; molding patterns; molds for metal (other than ingot molds), metal carbides, glass, mineral materials, rubber or plastics: Molds for rubber or plastics: Injection or compression types: Other … Other: Injection type.” The rate of duty will be 3.1% ad valorem.
Regarding the country of origin of the mold, you indicate that the complete steel mold is imported from China into Canada. The mold consists of the ejection sub-assembly; the injection sub-assembly; and the mold base. The Hydraulic/Pneumatic systems are manufactured in China, with some minor components being manufactured in the United States and Canada. The eyebolt for the mold base is manufactured in Germany. The generic components (e.g., brackets and screws) are primarily from China, with some being from the US. The Chinese components predominate in all aspects attributable to mold.
The components are imported into Canada, where the following operations occur:
A Plastic-Part Design and Feasibility study is conducted.
The Mold Spotting process ensures the precise fit of the mold known as (“Spotting Press”).
The Final Mold Assembly and testing. The assembly process includes the installation of digital pressure transducers, water lines, the hydraulic and pneumatic fittings, and the plaques and safety lift rings. After the assembly is complete, the mold is tested to confirm it can produce the final part.
The mold is packaged and exported to the United States.
Concerning your request for the appropriate country of origin of the mold, 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.
We note that the complete mold is manufactured in China. In our view, the assembly operations performed in Canada are not complex and the Chinese components do not undergo a substantial transformation as a result of those assembly operations performed. Further, the mold spotting process does not substantially transform the mold into a new and different article. The Plastic-Part Design and Feasibility Study does not impact origin. Therefore, based upon the facts presented, it is the opinion of this office that the mold is not transformed in Canada into a new and different article of commerce with a name, character, and use distinct from the articles exported from China. Thus, for purposes of 301 trade remedies, the country of origin of the mold, model number 3847, is China at the time of importation into the United States.
Products of China classified under subheading 8480.71.8045, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8480.71.8045, HTSUS, listed above. See U.S. Note 20 to Subchapter III, Chapter 99, HTSUS.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the Section 301 trade remedy, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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