OT:RR:CTF:VS H329582 RB
Nigel F. Spork
Centor North America Inc.
966-130 Corporate Blvd
Aurora, Illinois 60502
RE: Hinges; Country of Origin; Section 301 Measures
Dear Mr. Spork:
This is in response to your correspondence, dated September 23, 2022, in which you request a ruling concerning the country of origin of the “Centor E3CICS Concealed Intermediate Set” (“E3CICS”). Your request, submitted as an electronic ruling request on September 23, 2022, was forwarded to this office from the National Commodity Specialist Division for review. Our ruling is set forth below.
FACTS:
Centor North America Inc. (“Centor”) is headquartered in Aurora, Illinois. Centor imports the E3CICS into the United States from Poland. The key components in the E3CICS are stainless steel pins, hinges, machined investment castings and ball bearings. These components are used in the manufacture of weatherproof folding doors for residential homes.
The steel pins are the carrier pin, middle hinge pin and bottom guide pin, all of which are machined on a lathe in Centor’s Polish factory from 10 foot in length stainless steel bar stock of Italian or Indian origin. Some of the operations include rough turning, finish turning, external thread rolling, internal thread cutting, side slotting, and drilling. Centor holds a patent for the top adjusting carrier pin, and they are manufactured to withstand hurricane wind loads, forced entry, etc. The hinge roller bearings and thrust bearings are manufactured in another European country using specialized bearing manufacturing equipment. The hinge flaps and stainless steel castings are manufactured in China.
All the components undergo a series of manufacturing and assembly steps to complete the E3CICS and ready it for export to the United States. For example, the carrier pin assembly consists of assembling the carrier pin together with a spring, locking mechanism slotted receiver and pin. The top carrier is then assembled by pressing the bearings to the investment cast carriers. The hinge flaps are assembled and the thrust bearings are assembled to the semi-assembled top carrier with the top carrier pin. Next, the machined pins, hinge flaps and thrust bearings are hydraulic pressed together with knurled stainless steel caps to form the middle hinge assembly. Similar operations are performed to form the bottom guide assembly.
You submitted a detailed list of the steps and photographs of the assembly process of the E3CICS.
ISSUE:
What is the country of origin of the E3CICS for the purposes of applying Section 301 trade remedies?
LAW AND ANALYSIS:
The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(f), Harmonized Tariff Schedule of the United States (“HTSUS”). Among the subheadings listed in U.S. Note 20(f) of Subchapter III, Chapter 99, HTSUS, is 8302.10.6090, HTSUS, where these goods are classified.
When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occurred, and the essence of the article is considered. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982), aff’d 702 F.2d 1022 (Fed. Cir. 1983).
In National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993), the Court of International Trade (“CIT”) determined that certain hand tool components used to make flex sockets, speeder handles, and flex handles were not substantially transformed in the United States. The components were cold-formed or hot-forged into their final shape in Taiwan 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.
In Headquarters Ruling Letter (HRL) 734923, dated May 14, 1993, CBP determined that imported components of a door lockset, the rosettes and parts of the latch, were substantially transformed when they were assembled together with significant U.S. components in the United States to make the finished door lockset. CBP noted that the manufacture of the rosettes in China was relatively simple and did not require a great deal of precision as compared to the manufacture of the other components in the United States, which required significant precision and substantial machinery and tooling. Similarly, in HRL 735198, dated March 1, 1995, CBP held that imported lock cases and cylinder retainer blocks were substantially transformed into industrial padlocks in the United States as a result of their assembly with a substantial number of U.S.-origin components. CBP found that the character of the lock case and cylinder retainer block was changed as a result of their incorporation into the finished padlock.
In the instant case, Centor states that the product is assembled from components machined by Centor in Poland, together with other components sourced in another European country and China. The top carrier pin, middle hinge pin and bottom guide pin are made in Centor’s Poland factory. The hinge roller bearings and thrust bearings are manufactured in another European country. The hinge flaps and stainless-steel castings are manufactured in China. While some of the components are imported in a form ready for assembly, the pins are made in Poland and transformed from the stainless steel bar stock, that could be made into a number of different materials. Therefore, we find that considering the manufacture of the pins in Poland and the assembly with the other components, that the imported materials will undergo a substantial transformation in Poland and the country of origin of the E3CICS will be Poland.
HOLDING:
Based on the information provided, the country of origin of the E3CICS is Poland.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by [CBP] field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch