CLA-2-73:OT:RR:NC:N5:113
Mr. Rob Decker
Mitsubishi Logistics America Corporation
19310 Pacific Gateway Drive Torrance, CA 90502
RE: The tariff classification and country of origin of loose spacers from Japan
Dear Mr. Decker:
In your letter dated July 12, 2024, you requested a tariff classification and country of origin determination ruling on behalf of your client American Furukawa Inc. Product descriptions, pictures, and the Installation Manual were submitted for our review.
The products are identified as Furukawa Electric Power Systems (FEPS) Loose Spacers (LS) that are used to separate power lines to prevent galloping. You stated in your letter that “The LS are bundle spacers having a function to effectively suppress conductor galloping of overhead transmission lines and have been used widely in Japan as a standard countermeasure to bundle conductor galloping…FEPS has developed four types of the LS for two-, three-, four- and eight-bundle conductors, respectively called LS2, LS3, LS4 and LS8.” Each loose spacer is fully assembled and ready to install at the time of import into the United States.
Each loose spacer features two types of clamps, half are loose clamps (LC) that are the rotating type and the other half are rigid clamps (RC). Loose clamps allow sub-conductors to rotate freely, up to ±80 degrees at the clamping points. The loose clamps and rigid clamps change the shape of the snow and ice accretion as well as the torsional motion between sub-conductors, resulting in suppressing galloping.
You have provided the name, material, and country of manufacture for each component that comprises the loose spacer in the chart below.
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You suggested the FEPS Loose Spacers are classified in subheading 7308.90.9590, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, balustrades, pillars and columns) of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel: Other: Other: Other: Other: Other. We disagree. The loose spacers aerodynamically suppress the galloping of power lines and are not considered parts of a structure. As such, the loose spacers are precluded from classification in heading 7308, HTSUS.
The loose spacers are comprised of aluminum and steel components that are classified in different headings. Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Since no one heading in the tariff schedules covers the components that comprise the loose spacers in combination, GRI 1 cannot be used as a basis for classification. GRI 3(b) provides that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. We note that the loose spacers are composite articles comprised of more than one base metal (aluminum and steel). Regarding the classification of composite articles, Section XV, Note 7 of the HTSUS states that “articles of base metal containing two or more base metals are to be treated as articles of the base metal predominating by weight over each of the other metals.” Based on the information provided to our office, the metal in the loose spacers that predominates by weight is steel. Therefore, the loose spacers will be classified under heading 7326, HTSUS, which provides for other articles of iron or steel.
The applicable subheading for Furukawa Electric Power Systems Loose Spacers will be 7326.90.8688, HTSUS, which provides for other articles of iron or steel, other…other. The rate of duty will be 2.9 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/.
In addition to classification, you requested a country of origin determination for the loose spacers. In your submission, you described the manufacturing processes performed in China and Japan to arrive at the loose spacers in condition as imported into the United States. Furukawa Electric Power Systems has stated that the manufacturing processes performed in China and Japan for all four types of the loose spacers, LS2, LS3, LS4 and LS8, are basically the same. The assembly process for the LS3 is provided below.
LS3 frame (chamber and joint rod) is cast and welded in China for import to Japan.
SP Lock Nut and the components are produced and assembled in Japan.
Various components used for the assembly of the LS3 are produced in Japan, imported from China and received into the manufacturing facility located in Japan.
LS3 frame and other components are shot blasted and galvanized in the Japanese manufacturing plant.
LS3 assembly in Japan is broken down into the three procedures:
Loose Clamp Machining and Assembly
Fixed Clamp Machining and Assembly
Attachment of the clamps to the frame of the LS3
Fixed Clamp Machining and Assembly
Step 1 - Clamp and cap which makes the main body of the fixed clamp are machined to produce the
following:
Drill Φ5 (M6 pilot hole)
Drill Φ14.3 (M16 pilot hole)
Drill Φ22.4 (stepped washer hole)
Drill Φ8.3 (hinge hole)
Drill Φ5.0 (bolt detent)
Tap M6 (screw hole)
Tap M16 (hexagonal bolt hole)
Step 2 - Aluminum collar installation
Screw holes of the main body and holder are filled with a bonding agent and the aluminum collar is attached with countersunk screws.
Step 3 - SP lock nut installation
SP lock nut with eyebolt is mounted on the clamp.
A pin is inserted into the hinge hole and hammered in using a mechanical caulking tool to produce a
fluid type rivet joint.
Step 4 - Caulking of hinge holes and eyebolt holes
Pins are inserted into hinge holes and eyeholes and hammered in using a mechanical caulking tool to
produce a fluid rivet joint.
Caulking part on hinges and eyebolts are filed to make them smooth.
Step 5 - Spring pin driving work
Sili-silver is inserted in the spring pin hole and the spring pin is hammered to insert. Spring pin hole is
caulked using a caulking punch.
The caulking condition is inspected, and a silicone rubber is injected to seal the spring pin hole.
Loose Clamp Machining and Assembly
Step 1 - Loose clamp and Loose clamp cap which makes the main body of the loose clamp are
machined to produce the following:
Drill Φ5 (M6 pilot hole)
Drill Φ8.3 (hinge hole)
Tap M6 (screw hole)
Center drill - Clamp is attached to the terminal using a bolt.
Step 2 - Aluminum collar installation
Screw holes of the main body and holder are filled with a bonding agent and the aluminum collar
is attached with countersunk screws.
Step 3 - SP lock nut installation
SP lock nut with eyebolt is mounted on the clamp.
A pin is inserted into the hinge hole and hammered in using a mechanical caulking tool to produce a
fluid tight rivet joint.
Step 4 - Caulking of hinge holes and eyebolt holes
Pins are inserted into hinge holes and eyeholes and hammered in using a mechanical caulking tool to
produce a fluid tight rivet joint.
Caulking part on hinges and eyebolts are filed to make them smooth.
Step 5 - Loose clevis assembly work
A bonding agent is applied to the threaded portion of the hexagon nut and the loose clevis and
terminal are attached with hexagonal nut and bolt.
Hexagonal bolt is caulked with a riveting machine.
Attachment of Spacer Clamps to the Frame (This process is used for all three clamps, two fixed and 1 loose.)
Step 1 - Clamping
Place the clamp terminal bolt through the chamber of the LS3 frame.
The coil spring and flat washer are fed onto the terminal bolt into the chamber and secured with a grooved nut.
Cotter pin is inserted to secure the terminal bolt and torqued using an impact wrench and jig to form a “Z” shape.
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.”
When considering a product that may be subject to antidumping, countervailing, or other safeguard measures, the substantial transformation analysis is applied to determine the country of origin. See 19 C.F.R. § 102.0; HQ 563205, dated June 28, 2006; see also HQ 563205, dated September 16, 1996 (finding that "the term 'product of' at the least includes manufactured articles of such country or area" and that substantial transformation "is essentially the test used... in determining whether an article is a manufacture of a given country").
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, dated January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
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.
Regarding the country of origin for the FEPS Loose Spacers, it is the opinion of this office that the manufacturing and assembly operations performed in Japan substantially transform the clamps, caps, pins, eye bolts, lock nut, bolts, washers, springs, clevis, nuts, chambers, terminals, screws, joint rods, case, etc. into a new and different article of commerce with a changed name, character, and use. Thus, it is the belief of this office that the manufacturing and assembly processes performed in Japan result in a substantial transformation of the components, and the loose spacers shipped from Japan are products of Japan.
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 Ann Taub at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division