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 control arms
Dear Mr. Kenkel:
In your letter dated August 5, 2024, you requested a tariff classification and country of origin determination ruling on behalf of your client, GAA Automotive Technology Sdn Bhd.
The merchandise under consideration consists of various Control Arms (Model Numbers XG-9064, BB-8024, XG-9067, XG-9195L and BB-8009) used in passenger vehicles. The sub-assemblies include a boot, bushing, ball pin, ball socket, backing plate and other accessories. Models XG-9064 and BB-8024 are straight control arms and Models XG-9067, XG-9195L and BB-8009 are v-shaped control arms. The control arms have a very similar production process, structure and components. They are used in suspension systems and serve to connect the wheel hub and the frame, controlling the tire movement within a reasonable range. The control arms elastically connect the wheels and the body through ball joints or bushings, ensuring that the wheels move along a certain trajectory, while also providing a certain anti-seismic and decompression effect.
According to the information provided, the housing, ball pin (which is a ball joint), boot, and bushings are made in Malaysia. The rest of the components, such as the backing plate, ball socket, clips, nuts, spacer, injector, and the cap for the housing, where applicable, are sourced from China and imported into Malaysia to be assembled together with the Malaysian components. In Malaysia, the components are press fit into each other using the pressing machine, and then laser marked, greased, inspected, and packaged.
You suggested classifying the control arms in subheading 8708.80.1600, Harmonized Tariff Schedule of the United States (HTSUS,) which provides for suspension systems (including shock absorbers). However, control arms are not a complete suspension system, but rather a component of a suspension system.
The applicable subheading for the Control Arms (Model Numbers XG-9064, BB-8024, XG-9067, XG-9195L and BB-8009) will be 8708.80.6590, HTSUS, which provides for "Parts and accessories of the motor vehicles of heading 8701 to 8705: Suspension systems and parts thereof (including shock absorbers): Parts: Other: Other: Other. The general 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, date 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."
In the present case, the assembly of the components in Malaysia does not appear to be complex. As a result, no substantial transformation occurs in Malaysia and the character of the entire assembly needs to be determined. In N309252, dated 02/15/2020, and N339304, dated 05/03/2024, CBP ruled that the ball joint imparts the character of a control arm. Since the ball joint in the current control arms are sourced in Malaysia, the country of origin of Models XG-9064, BB-8024, XG-9067, XG-9195L and BB-8009 will also be Malaysia.
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