MAR-2 OT:RR:NC:N1:104
Philip S. Gallas, Partner
FisherBroyles, LLP
242 Strummer Lane
Gaithersburg, MD 20878
RE: The country of origin of a ratchet tie down from India.
Dear Mr. Gallas:
In your letter, dated January 12, 2021, you requested a country of origin ruling on behalf of your client, Winston Products LLC.
The Winston Products LLC model number 262, Ratchet Tie Down, is used to secure cargo or equipment during transport. This item consists of a ratchet subassembly, a short length of woven tie down strap, a long length of woven tie down strap, and two metal J-hooks. The short strap is stitched at one end to a metal J-hook, and attached at the other end to the ratchet; while the long strap is stitched at one end to a metal J-hook, and the other end left free to be fed into the slot of the ratchet during use.
In your submission, you provide a description of the manufacturing process for the ratchet tie down. The production process begins in India where the yarn used to weave the webbing is spun in India from Indian-sourced thread. The spun yarn is sent to a weaving mill where it is woven into the polyester webbing. The webbing is then dyed for the desired color. After dying, it will go through a heat-sealing process and the finished webbing is then cut to the desired lengths (long and short ends) and shipped to the factory in Thailand. Next, the ratchet subassembly and J-hooks are manufactured in China and are shipped fully assembled to Thailand. In Thailand, the finished woven straps will be sewn and affixed to the fully assembled ratchet subassembly and J-hooks. The finished ratchet tie down is then packed and shipped to the United States from Thailand.
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.”
It is noted that substantial transformation test is also used to determine the country of origin for purposes of the Section 301 measures. See, e.g., Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. 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. See 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. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (“Uniroyal”). 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 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".
Based on the information provided, the woven straps are the essence of the finished article, which are manufactured in India. The straps maintain their name, character, and use as tie down straps after assembly in Thailand with the Chinese origin ratchet subassembly and J-hooks. Therefore, the country of origin of the complete ratchet tie down, model 262, will be India; the relevant Section 301 provision does not apply.
This ruling is being issued under the provisions of Part 177 of the Customs 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, contact National Import Specialist Denise Hopkins at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division