CLA-2-87:OT:RR:NC:N2:206
Matthew Fields
Autolin Inc
16650 NE 79th St, Ste 103 Redmond, WA 98052
RE: The tariff classification and country of origin of a double flanged wheel hub assembly
Dear Mr. Fields:
In your letter dated June 3, 2024, you requested a country of origin ruling on a double flanged wheel hub assembly, which you filed on behalf of your client, New Torch Technology Thailand Company Limited. Although you did not request a tariff classification of the wheel hub assembly, we will address it in this ruling nonetheless.
The article under consideration is a Double Flanged Wheel Hub Assembly With Ball Bearings and ABS Components Without Splining (G3-350A). The wheel hub bearing unit includes the inner and outer flanges, the inner ring, the gear ring rotating body, the anti-lock braking system (ABS) components, and the sealing assembly. The magnetic steel suit of the ABS sensor is mounted on the gear ring rotary body and matched with it. The rotating body of the gear ring is fixed to the flange. The flange end face is given a hole with bolt, which can be directly connected to the suspension, brake device and hub. The structure replaces the original car steering knuckles, hub and bearing combination.
You state that the outer and inner flanges are sourced in Thailand. The rest of the components, such as the inner ring, steel balls, seal ring, cage, gear ring, ABS sensor, bolt, grease, and packaging are made in China and imported into Thailand for processing and final assembly.
Prior to the final assembly, the inner ring, and the inner and outer flanges undergo various processes. In Thailand, the raceway, inner and outer diameter of the inner ring, and the sidewall of the inner ring, which are of Chinese origin, are finely grinded. Afterwards, the raceway undergoes super fine grinding. The outer and inner flanges, which are of Thai origin, are subject to fine turning, followed by the drilling, chamfering and tapping of drill holes. The flanges then undergo heat treatment processes (quenching and tempering) and the raceway, end face, inner diameter, and outer diameter are fine turned. The outer diameter, the inner diameter, and the raceway undergo fine grinding, and the raceway undergoes super fine grinding.
The final assembly begins by demagnetizing and cleaning the components using an ultrasonic cleaner. The inner flange bolts are press fit into the flange. Grease is applied. The steel balls are manually placed into the cage and the seal ring is pressed onto the inner diameter of the outer flange using a gas-liquid booster. The inner flange, outer flange, and the rolling element are combined and the inner ring is pressed on for locking, before checking the clearance for riveting. The dust cover and the gear ring are pressed into the appropriate position using the booster. The ABS sensor is installed and high temperature adhesive is applied to the corresponding position and secured with screws. Effective voltage value is detected by a signal detection machine. Finally, the wheel hub assembly is laser marked and anti-rust oil is manually applied.
In your letter, you suggest that the double flanged wheel hub assembly is classified within subheading 8482.10.5016, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Ball or roller bearings, and parts thereof, Ball bearings: Other: Angular contact bearings: Wheel hub bearings units: Flanged. We disagree. The wheel hub assembly is not merely an anti-friction mechanism of heading 8482, the assembly incorporates ABS components. The ABS components complete a function that does not fall within the scope of heading 8482. Based on its construction, the wheel hub assembly is viewed as an automotive component with a bearing. As such, the subject wheel hub assembly is excluded from heading 8482, HTSUS.
The applicable subheading for the Double Flanged Wheel Hub Assembly With Ball Bearings and ABS Components Without Splining (G3-350A) will be 8708.99.5800, HTSUS, which provides for Parts and accessories of the motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: Other: Other: Double flanged wheel hub units incorporating ball bearings. The rate of duty will be 2.5 percent, ad valorem.
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/.
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.
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). 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) (Uniroyal). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, dated January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In the Uniroyal case, the court held that an upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe."
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 the subject case, the assembly of the components in the flanges is a simple assembly and would not be considered as a substantial transformation. Accordingly, in this case instead of looking at the assembly process to determine the country of origin of the wheel hub unit incorporating ball bearings, we must consider the component or components of the inner ring and the outer flange containing the races with precision raceways, that provides its character.
This rationale is noted in Headquarters (HQ) ruling 562528, dated December 10, 2002, which discusses the country of origin of a ball bearing. This ruling states that the fundamental character and use of the bearings are determined after the steel rings are ground and finished into races with precision raceways and they are no longer considered steel rings. This rational is also discussed in HQ rulings 731968, March 19, 1990, and 731969, dated March 19, 1990, where rings are heat treated and polished in one country and the races are created, and superfinishing occurs in the second country. In these rulings, the country of origin of the bearings was determined to be the country in which the rings become races with precision raceways.
Here, the inner ring, which is the inner race of the bearing, and the inner and outer flanges, which are the outer race of the bearing, are formed in Thailand. Accordingly, the country of origin of the Double Flanged Wheel Hub Assembly With Ball Bearings and ABS Components Without Splining (G3-350A), for marking purposes is Thailand. As the country of origin of the subject merchandise is Thailand, the Section 301 Trade Remedy duties are not applicable to the wheel hub assembly under consideration.
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. In the event that 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 U.S. Customs and Border Protection (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 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 Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division