OT:RR:CTF:VS: H308206 JMV
Michael K. Tomenga
1400 16th Street, NW, Suite 350
Washington, DC 20036
RE: Country of Origin; Steel/Aluminum Tubes; Caulking Guns
Dear Mr. Tomenga,
This is in reference to Headquarters Ruling Letter (“HQ”) H303868, issued to you on behalf of your client Newborn Bros. Co. (“Newborn”), on June 27, 2019, concerning the country of origin marking for steel metal and aluminum tubes. In that ruling, U.S. Customs and Border Protection (“CBP”) found the steel and aluminum tubes were not substantially transformed by U.S. operations and therefore, must be marked with their country or origin, Taiwan, at the time of entry. CBP based this decision, in part, on HQ 561744, dated July 20, 2000, which was rescinded on September 19, 2000. See 34 Cust. Bull. & Dec., No. 39, 40-41, September 27, 2000. Therefore, we hereby modify HQ H303868 to remove reference to HQ 561744. The finding of HQ H303868 that the steel and aluminum tubes are not substantially transformed by U.S. operations is unaffected.
On November 11, 2020, CBP published its proposed modification of HQ H303868 in the Customs Bulletin, Volume 54, Number 44, pursuant to section 625(c), Tariff Act of 1930, (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub.L. 103-182, 107 Stat. 2057, 2186 (1993). No comments were received in response to the proposed modification of HQ H303868.
FACTS:
Newborn is an importer and distributor at wholesale of caulking guns, parts and accessories in the United States. The imported products that are the subject of HQ H303868 are Carbon steel or aluminum metal tube with an inside diameter of two inches and an outside diameter of 2 1/8 inches, which may be sourced from suppliers in one or more foreign countries. The steel/aluminum tubes will be imported in lengths of approximately 7.5 feet. For the purposes of this ruling, you ask us to assume that the country of origin of these steel/aluminum tubes is Taiwan. The steel tube would meet Standard STKM 11A (JIS). The aluminum metal tube would meet Standard 6063 (JIS). As imported, the metal tube has plain ends.
After importation, the tube will be cut to lengths of 14 inches or 18 inches, and threaded at each end for use as barrels for caulking dispensing guns. Steel metal barrels will be polished and zinc-plated after threading for corrosion resistance. Aluminum barrels will be polished and anodized after threading for corrosion resistance.
ISSUE:
What is the country of origin marking of the steel metal and aluminum tubes?
LAW AND ANALYSIS:
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 imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or 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.” United States v. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).
Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. § 1304. Section 134.1(b), Customs Regulations (19 C.F.R. § 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.
In National Hand Tool v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993), the court determined that certain hand tool components used to make flex sockets, speeder handles, and flex handles were not substantially transformed within the United States. The components were cold-formed or hot-forged into their final shape prior to importation, with the exception of speeder handle bars, which were reshaped by a power press after importation, and the grips of the flex handles which were knurled in the United States. The imported items were heat treated to strengthen the components, sand-blasted to clean the components, and electroplated to better enable the components to resist rust and corrosion. In making this determination, the court noted that the processing which occurred within the United States did not alter the name of the imported components, the character of the parts remained substantially unchanged upon the completion of such processing, and the intended use of the articles was predetermined at the time of importation. Although the court recognized that a predetermined use for imported articles does not preclude a finding of substantial transformation, the court noted that each component was intended to be incorporated in a particular finished mechanic’s hand tool. Moreover, National Hand Tool dismissed as a basis for a substantial transformation the value of the processing, stating that the substantial transformation test utilizing name, character and use criteria should generally be conclusive in country of origin marking determinations, and that such a finding must be based on the totality of the evidence.
In determining whether a substantial transformation has occurred in the processing of metals, CBP has generally held that the mere cutting to length or width which does not render the article suitable for a particular use does not constitute a substantial transformation. For example, in New York Ruling Letter (“NY”) N284041, dated March 31, 2017, CBP found that black steel and galvanized steel pipes were not substantially transformed in China, where the pipes were cut into shorter lengths, chamfered, threaded, cleaned and subject to anti-rusting treatments. CBP noted that the imported product manufactured in Korea was pipe and the product imported from China remained pipe. Therefore, CBP found that the pipes did not lose their identity and were not substantially transformed when cut and processed in China. See also HQ 734186, dated October 24, 1991 (finding that the threading and cutting of steel pipe did not result in a substantial transformation).
In HQ W968318, dated October 2, 2006, CBP similarly found that subjecting Bulgaria-origin brass strip to one cold-rolling pass in Germany which reduced its thickness by slightly less than three one-thousandths of an inch and smoothed the product’s surface did not constitute a substantial transformation of the Bulgarian-origin strip. See also HQ 734716, dated November 27, 1992 (finding that polishing grade 304 stainless steel sheet to achieve a No. 8 mirror finish to promote corrosion resistance was a change in a characteristic of the steel but not its character and therefore not a substantial transformation).
Accordingly, we find that the processing of the steel metal and aluminum tubes described above in the United States, which includes cutting, threading, polishing and zinc-plating or anodizing for corrosion resistance, does not constitute a substantial transformation. Since Newborn, as the importer, will not be the ultimate purchaser, we find that the steel metal and aluminum tubes are subject to the requirements of 19 C.F.R. § 134.26(a). When Newborn files the entry summary, Newborn must also file a certificate for the country of origin marking of articles to be repacked pursuant to 19 C.F.R. § 134.26. The country of origin marking of the steel metal and aluminum tubes must be visible to the ultimate purchaser.
HOLDING:
Based on the information provided, the imported steel metal and aluminum tubes will not undergo a substantial transformation in the United States and the country of origin is Taiwan for marking purposes. The steel metal and aluminum tubes are subject to the requirements of 19 C.F.R. § 134.26(a). HQ H303868 is hereby MODIFIED in accordance with the above analysis.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division