MAR-2 OT: RR: NC: N4:424
Ms. Brennan O’Gorman
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
599 Lexington Avenue
New York, NY 10022
RE: The Country of Origin of a Golf Club Set assembled in Vietnam and the Applicability of Section 301 Trade Remedies
Dear Ms. O’Gorman:
This is in response to your letter dated August 16, 2023, submitted on behalf of your client Dick’s Merchandising and Supply Chain Inc., requesting a ruling regarding the country of origin, and the application of Section 301 additional duties for a golf club set. Photographs, product descriptions, manufacturing processes, and a value and weight breakdown for the subject golf set was provided for our review.
The merchandise under consideration is identified as item number TF23XLMRHVT, the Top Flite Adult XL Men’s golf set. You state that the set will be packaged together and imported as a single unit for retail sale with the following components: a driver club; a #3 fairway wood club; a #5 hybrid club; five iron clubs; a putter club; a polyester golf bag; three polyester headcovers, one for each of the following clubs: driver; #3 fairway; and #5 hybrid; thermoplastic resin grips (assembled onto the clubs); and other packaging materials, including a cardboard box and cardboard outer carton.
According to the information provided in the submission, the golf bag and headcovers are constructed of polyester textile materials and are wholly produced in China. As such, the country of origin of the golf bag and headcovers is China. We also note that the thermoplastic resin grips, which are molded onto the golf clubs in Vietnam, are wholly produced in China as well.
With regard to the golf clubs, you present two production scenarios for the various foreign components of the golf clubs discussed hereafter. You assert that in each production scenario the golf set will not be subject to the Section 301 Trade Remedy for products of China as the country of origin of the golf clubs will be Vietnam, the country wherein either the head or the shaft, is produced and assembly operations will occur.
Country of Origin of Golf Clubs:
In the first scenario, you state that the golf heads for the drivers and irons will be produced in China and that the golf heads for the #3 wood, #5 hybrid club, and putter will be produced in Vietnam. You also indicate that for this scenario, the shafts for all of the golf heads will be manufactured in Vietnam, which is also the country where final assembly takes place.
In the second scenario, you state that all of the golf heads for the Top Flite Adult XL Men’s golf set will be produced in Vietnam and that the shafts will be produced in either China or Taiwan. You further state that all assembly operations for each golf club will take place in Vietnam.
Based on the information provided, all of the golf heads will be produced through a metal casting process characterized by the forcing of molten metal under high pressure into a mold cavity, known as die casting. The aluminum or zinc material is melted and poured into a ceramic mold cavity. Once cooled, the head is removed from the cast and subjected to finishing operations, such as polishing and painting, prior to assembly into the shaft. The manufacturing processes for the golf heads will be performed in either China or Vietnam as described in the aforementioned scenarios.
You further state that the shafts for the driver and #3 fairway wood clubs will be produced with rolls of graphite which are cut to length and formed into tubes. The tubes are then wrapped with polypropylene to strengthen the shaft structure and oven dried. After removal of the polypropylene wrapping, the tubes are cut to their final shaft length, polished, painted with their base color, and oven dried. The base-painted shafts are then polished, painted with their primary color, and oven dried again. The shafts are finished with logo decals and a clear polyurethane coating before final drying and inspection. This production process will take place in either Vietnam or China as detailed in the above scenarios.
With regard to the shafts for the #5 hybrid club, the putter and the five irons, the production process begins with rolls of steel which are formed into tubes and subjected to numerous pre-assembly operations which include normalizing, pickling, lubricating, and tube edge preparation. The steel tubes are then cut to length and undergo other finishing processes, such as polishing and straightening, before being cut to their final shaft length. Once cut to final length, the tube edges are polished, and finished with straightening, annealing, polishing, and plating operations. The finished shafts are then subject to final inspection. The production processes of the shafts for the #5 hybrid club, the putter and the five irons will take place in either Vietnam, China, or Taiwan.
You state that for both scenarios, the assembly process will take place in Vietnam. The assembly of the golf club components into functional golf clubs are performed through operations such as bonding the golf club head body to the shaft, molding the rubber grip to the upper portion of the shaft, and cleaning and polishing to give the clubs a finished appearance. In Vietnam, the heads of the finished golf clubs are shrink-wrapped and combined with the headcovers, the shafts are wrapped in polybags, and the finished clubs are inserted into the golf bag and packaged together in the master carton for shipment.
Under both production scenarios described above, the assembly operations occur in Vietnam, where one or both of each clubs’ major components (i.e., the head or the shaft) will be produced. For the first scenario, the heads for the driver and iron clubs are sourced from and produced in China. The heads for the 3-wood, hybrid, and putter clubs and the shafts for all of the clubs are produced in Vietnam, where final assembly takes place.
For the second scenario, the heads for all clubs are produced in Vietnam, which is also the country of assembly. The shafts for the driver and 3-wood clubs are sourced from China, and the shafts for the hybrid, iron, and putter clubs are sourced from China and Taiwan.
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."
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.
Consistent with HQ 560693 and HQ 563286, where the driver head or shaft is of the same origin as the country where the assembly of the golf club occurs, the country of origin of the club is the country of its assembly. Here, in all production scenarios, the Top Flite Adult XL Men’s golf clubs head or shaft will be manufactured in Vietnam, where the assembly of the golf clubs occur, which substantially transforms the foreign components into a product of Vietnam. Therefore, the country of origin of the Top Flite Adult XL Men’s golf clubs with molded thermoplastic grips is Vietnam.
Classification / Country of Origin of the Set:
We note that the Top Flite Adult XL Men’s golf set consists of two or more different articles that are, prima facie, classifiable in different headings. The set also consists of articles put up together to carry out a specific activity (i.e., playing a round of golf). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the Top Flite Adult XL Men’s golf set is described within the meaning of "goods put up in sets for retail sale".
In accordance with GRI 3 (b), sets are classified according to the component or components taken together, which can be regarded as conferring on the set, as a whole, its essential character. The essential character of the set is imparted by the golf clubs of Vietnamese origin.
The applicable subheading for the subject Top Flite Adult XL Men’s golf set will be 9506.31.0000, Harmonized Tariff Schedule of the United States HTSUS, which provides for "Articles and equipment for general physical exercise…athletics, other sports…parts and accessories thereof: Golf clubs, complete" The rate of duty will be 4.4% ad valorem.
When imported together as a set, the country of origin of the Top Flite Adult XL Men’s golf set is Vietnam. Therefore, the Section 301 Trade Remedy is not applicable.
Country of Origin Marking:
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain. With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable. As the individual Chinese components, specifically the golf bag and headcovers, of the golf set do not lose their identity as a result of being packaged together with the Vietnamese golf clubs in Vietnam, the external packaging of the Top Flite Adult XL Men’s golf set should be marked in a conspicuous manner to indicate that the complete set contains components that are made in China and Vietnam. In other words, the Top Flite Adult XL Men’s golf set has multiple countries of origin, China, and Vietnam for marking purposes.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. If the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of CBP and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Roseanne Murphy at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division