OT:RR:NC:N1:103
Mandy Zhou
Prulde Electric Appliance (Thailand) Co., Ltd.
7/528 Moo 6, Mabyangporn, Pluakdaeng, Rayong
Pluakdaeng, 21140
Thailand
RE: The country of origin of a heat gun.
Dear Ms. Zhou:
In your letter dated October 25, 2022, you requested a country of origin ruling determination on a heat gun.
The item under consideration is the Kobalt 12.5-amp heat gun, model number 5208257, which features two fan speeds, a variable temperature control dial, and is rated at 1500 watts. The main components of the heat gun include a plastic molded housing that encompasses a heating element, motor-fan assembly, power switch, and power cord. The heat gun is designed to deliver hot air and can be used for various heating applications including heat shrinking, stripping paint, bending plastic, as well as general drying and thawing.
Each heat gun is assembled in Thailand using 24 components sourced from China and Thailand. The main housing, front cover, and heating element are produced in Thailand. The remaining components are sourced from China, and include the PCBA, motor, fan, switch, power cord, wiring, knob, back cover, motor support, support ring, heat insulator, and fasteners.
The final assembly of the heat gun begins with press fitting the fan to the motor spindle and attaching the fan cover using screws. Next, the wiring is prepared, which includes crimping plugs to the wires on the heating element, adding heat shrink tubing, soldering wires to the switch, and plugging wires from the heating element into the switch and the PCBA. A worker fastens the PCBA to the main housing, assembles the temperature knob, connects the PCBA to the motor, and adds the back cover and motor support. To complete the assembly, the power cord is secured using a cord clamp, the switch slider is added, and the main housing is closed using screws. Each heat gun is tested before it is labeled and packaged.
With regard to your request for the appropriate country of origin of the heat gun, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means 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.
As stated in HQ 735009, dated July 30, 1993, “The country of origin is the country where the article last underwent a ‘substantial transformation’, that is, processing which results in a change in the article's name, character, or use.” In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer, the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article.
In examining assembly operations, Customs and Border Protection has looked to the nature of the assembly, as well as the origin of the component that imparts the “essence” to the end product. The final assembly of the heat gun involves steps that are described as assembling, fitting, crimping, plugging, and fastening various components to form a finished unit. We find that the final assembly operations in Thailand are not sufficiently complex as to constitute a substantial transformation. In your submission, you suggest the heating element provides the essence of the heat gun. While the heating element is an important component, it alone does not provide the essence of the finished heat gun. Rather, the heating element together with the motor and fan assembly impart the essence as those components allow a heat gun to deliver hot air and fulfill its intended function. Since most of the other important components are made in China and the final assembly performed in Thailand is not complex, the country of origin of the finished heat gun is China.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
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 a Customs Service 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 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 Paul Huang at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division