CLA-2-84:OT:RR:NC:N1:102
Matthew Hunt
Dominion Customs Consultants
1595 16th Ave Richmond Hill L4B3N9 Canada
RE: The tariff classification and country of origin of a Yard Hydrant Assembly – Corrosion Resistant
Dear Mr. Hunt:
In your letter dated May 1, 2023, you requested a tariff classification and country of origin ruling of a Yard Hydrant assembly- Corrosion Resistant, on behalf of your client, Boshart Industries. Descriptive information and a Bill of Materials were provided.
The imported item is the Yard Hydrant Assembly - Corrosion Resistant, item number YHP-04NL. It is noted that New York ruling N329837 (January 12, 2023), previously ruled on the origin and classification of a Yard Hydrant Assembly. However, in this submission, the assembly incorporates corrosion resistant components.
This item features a cast iron head with a bucket hook and comes with a removable ¾” GHT brass garden connector. The Yard Hydrant Assembly is a manually operated valve and is typically used for irrigation, tool cleaning, lawn maintenance, etc. The yard hydrant consists of a water control valve attached to a handle by means of a connecting rod, and a pipe. It is stated that the valve itself is either a brass or stainless-steel valve, while the head portion of the assembly consists of various metal materials. The rod and pipe that connect the handle at the top of the hydrant to the valve are corrosive resistant and consist of steel material. The pressure rating of the valve is 861.85 kPa.
You suggest the item is classified within heading 8481.80.3040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts: Other appliances: Hand-operated: Of iron or steel: Of iron: Other.
We agree the yard hydrant is classified as a water control valve within heading 8481, as CBP has previously classified a yard hydrant as a valve within heading 8481. See NY R01026 (December 2, 2004). However, we disagree at the subheading level, as the valve is not an iron valve, but instead a brass valve. As such, the applicable subheading for the yard hydrant assembly that incorporates a brass valve, will be 8481.80.1095, HTSUS, which provides for Taps, cocks, valves and similar appliances, …Other appliances: Hand-operated: Of copper: Having a pressure rating of 850 kPa or over: Other. The general rate of duty is 4 percent ad valorem.
For the yard hydrant assembly that incorporates a stainless-steel valve, the applicable subheading will be 8481.80.3090, HTSUS, which provides for Taps, cocks, valves and similar appliances, …Other appliances: Hand-operated: Of iron and steel: Steel: Other. The general rate of duty is 5.6 percent ad valorem.
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.
In regard to country of origin for the purpose of 301 Trade Remedies, it is explained that components from Canada, Taiwan, Malaysia, such as the R-Cut Pipe TBE-GALV (part number 13YH-SS10T-48) and China, such as the Chinese Steel Rod TBE (part number 13-YH-RSS-048), are assembled to each other in Canada to form a complete yard hydrant.
For the Yard Hydrant Assembly – Corrosion Resistant, item number YHP-04NL, the final assembly occurs in Canada and consists of the same processes discussed in N329837. Based on the information provided, the final assembly of the Yard Hydrant Assembly begins with the insertion of a Malaysian pipe from Malaysia into the head assembly, and screwed in place. Next, a connecting rod from China is placed over the pipe. The pipe is then inserted through the Taiwanese valve body (part number 13YH-VBA07-875SS) with the Taiwanese rubber plunger. Afterwards, the connecting rod is screwed in place. As needed, lubricant and compound are applied throughout the various processes, and the completed Yard Hydrant Assembly undergoes inspections and testing. Prior to being packaged, the appropriate plastic thread protectors from Canada are installed.
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).
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 valves for the purpose of Section 301 remedies, CBP has previously relied on the origin of the valve body, which is the essence of a valve, when determining the origin of the yard hydrant assembly. The assembly processes of the yard hydrant assembly primarily consist of inserting, and screwing components to each other. These processes are rather simple and do not constitute a substantial transformation. Like in ruling N329837, we rely on the origin of the valve body, which is the essence of the yard hydrant to determine the origin of the yard hydrant assembly. The valve body provides the essential characteristic of the finished yard hydrant assembly. The valve body is dedicated for use as such and cannot be used for any other purpose.
As the origin of the valve body, part number 13YH-VBA07-875SS, is Taiwan, the country of origin of the Yard Hydrant Assembly - Corrosion Resistant, item number YHP-04NL, for the purpose of 301 Trade Remedies is Taiwan. Accordingly, the yard hydrant assembly is not subject to the additional duties applicable to products of China under Section 301 of the Trade Act of 1974, as amended, upon importation into the United States.
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 at https://hts.usitc.gov/current.
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 Sandra Martinez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division