OT:RR:NC:N2:206
Michael Roll
Roll & Harris LLP
2121 Avenue of the Stars, Suite 800 Los Angeles, CA 90067
RE: The country of origin of a wheel hub unit
Dear Mr. Roll:
In your letter dated November 15, 2024, you requested a country of origin ruling on a wheel hub unit for marking purposes, on behalf of your client, R&S Automotive, Inc.
The article under consideration is a wheel hub unit, which you refer to as a “G3 ball hub bearing unit.” It is a component of automotive wheels, which is connected to the axle through bearings, carrying the weight of the entire vehicle. When the vehicle is in motion, the weight is transmitted to the ground through the wheel hub to support and stabilize the vehicle's movement. The wheel hub unit is connected to the engine through a transmission system (such as traditional drive shafts or modern electric drive systems), allowing the driving force generated by the engine to be converted into the rotational force of the wheels, thereby driving the vehicle forward or backward. The wheel hub unit absorbs impacts and vibrations from uneven roads through its internal shock absorption system (such as suspension devices), protecting the vehicle and passengers from the impact of bumps and vibrations, and providing a comfortable driving experience.
The wheel hub unit is composed of internal and external bearings, sealing rings, and other components. According to your submission, the inner ring, outer ring (outer flange) and mandrel (inner flange) are made in Thailand, while the balls, cage, sealing ring, bolts, magnetic component, and grease are imported from China to Thailand for the final assembly. In Thailand, the Thai and Chinese components are cleaned, demagnetized, and laser marked. The bolts and pins are pressed into the flange. The inner groove is graded; steel balls are installed; and the oil is injected into the raceway. Then, the components are pressed in together and riveted, which completes the assembly process.
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States 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 United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940).
Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 CFR 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” 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 the marking laws and regulations.
A substantial transformation occurs when, as a result of manufacturing process, a new and different article emerges, having a distinct name, character or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process. See United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940). 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 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 Thailand does not appear complex enough to render a substantial transformation of the components. None of the components undergo a physical change in Thailand as a result of the assembly, except for becoming a part of a complete wheel hub unit. As a result, we need to determine the character of the entire article. CBP has previously stated the inner and outer rings and flanges provide the character of a wheel hub unit. See, for example, N336938, dated December 27, 2023, N339092, dated April 15, 2024, N339258, dated April 25, 2024, N340514, dated July 3, 2024, and N341993, dated August 13, 2024. In this case too, the Thai inner and outer rings and mandrel are the character of the entire wheel hub unit. Therefore, the country of origin of the “G3 ball hub bearing unit” will be Thailand 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