CLA-2-87:OT:RR:NC:N2:206
John Kenkel
International Trade Law Counselors, PLLC
8647 Richmond Highway, Suite 623 Alexandria, VA 22309
RE: The tariff classification and country of origin of 3rd generation wheel hub assemblies
Dear Mr. Kenkel:
In your letter dated July 29, 2024, which you filed on behalf of your client, GSP Automotive Malaysia Sdn Bhd., you requested a tariff classification and country of origin determination ruling.
The articles under consideration are 3rd Generation Wheel Hub Assemblies (Model 106036HD, 116065, 116096HD and 106054) with rollers, which are used in passenger vehicles, especiallyinsports utility vehicles (SUVs) and pick-up trucks. The sub-assemblies include inner and outer flanges, inner rings, rollers, cages, anti-lock breaking system (ABS) sensor, and other accessories.The flange end face is provided with a hole and a bolt, which can be directly connected to the wheel rim. The flange inner hole is provided with the spline slot, which can be used with the constant velocity (CV) axel half shaft.
According to the information submitted with your request, the rollers and other accessories, such as the cage, cap, seal, and anti-lock braking system (ABS) ring are made in China and imported into Malaysia to be assembled with the Malaysian made inner and outer flanges and inner ring. In Malaysia, the outer flange and inner ring are grinded and ultra-fine grinded. The rest of the components are then assembled using the roller loading machine, hydraulic press machine, and grease pump machine. The bolts are inserted into the inner flange and the rest of the assembly is pressed together. Finally, the product is tested, laser marked, and packaged for shipment.
The applicable subheading for the 3rd Generation Wheel Hub Assemblies (Model 106036HD, 116065, 116096HD and 106054) will be 8708.99.8115, HTSUS, which provides for Parts and accessories of the motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: Other: Other: Other: Other: Double flanged wheel hub units not incorporating ball bearings. The rate of duty will be 2.5% 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 "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 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).
In New York Ruling N340233, dated June 18, 2024, which was modified by N341993, dated August 13, 2024, this office issued your client a decision on an identical manufacturing scenario as described in the current request. In those rulings, with respect to the single flanged and double flanged wheel hub units with ball bearings, we stated that [t]he 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 essence.
Similarly in this case, the Malaysian flanges and inner ring are the character of the entire assembly. Therefore, the country of origin of the 3rd Generation Wheel Hub Assemblies (Model 106036HD, 116065, 116096HD and 106054), will be Malaysia 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. 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