MAR-2 OT:RR:NC:1:120
Mr. M. Jason Cunningham
Sonnenberg & Anderson
125 South Wacker Drive
Suite 1825
Chicago, Il 60606
RE: Country of Origin of Underfloor Converter Assembly, Converter Takedown Pipe Assembly, and a Front Assembly
Dear Mr. Cunningham:
This is in response to your letter dated March 22, 2011, on behalf of your client Tenneco Incorporated, requesting a ruling regarding whether imported and domestic components undergo a substantial transformation once assembled and processed in the U.S. by a U.S. manufacturer.
The four imported articles under consideration include an underfloor converter assembly, converter takedown pipe assembly, strapped muffler, and a front assembly.
The underfloor converter assembly, item number OF129P, is processed in the U.S. using U.S. and foreign components. The foreign ceramic honeycomb substrate is imported from South Africa coated with a platinum and rhodium catalyst, which together forms a catalytic converter. After importation, it is wrapped with a U.S. ceramic mat to insulate the substrate and prevent the exhaust gases from escaping. The catalytic converter is assembled in a shell that is formed by U.S. origin steel components and welded with U.S. steel cones. The catalytic converter imparts the essential character of the processed underfloor converter U.S. assembly.
The converter takedown pipe assembly, item number OP3865, is assembled in the U.S. using either one U.S. and one foreign (South Africa) catalytic converter, or two foreign (South Africa) catalytic converters. The catalytic converters are assembled with three U.S. exhaust manifold pipes to complete the converter takedown pipe assembly. They are combined to the exhaust manifold pipes by welding one converter between the inlet pipe and the intermediate pipe, the other converter between the intermediate pipe and the outlet pipe forming one chain.
The front assembly, item number OP124S, is assembled in the U.S. using one foreign (South Africa) catalytic converter, and two U.S. exhaust manifold pipes to complete the front assembly. The converter is welded between an inlet pipe and the outlet pipe.
While the catalytic converters reduce potentially polluting exhaust gases into harmless or less harmful products, the exhaust manifold pipes direct the flow of the exhaust gas, and retain its heat to ensure emissions targets. The pipes are highly engineered with twists and turns to provide positive and negative acoustic functions such as creating desirable sounds and avoiding whistles and rattle nuisances.
The catalytic converter, classified in the Harmonized Tariff Schedule of the United States (HTSUS) in heading 8421and the exhaust manifold pipes classified in heading 8409 merit equal consideration. Therefore, following GRI 3C, classification of the front assembly and the takedown pipe assembly will each be classified as a catalytic converter under subheading 8421.39.4000. There is no change in subheadings after U.S. processing.
The assembled underfloor converter assembly, converter takedown pipe assembly and front assembly are classified as a catalytic converter at the time of importation and after U.S. processing. They do not have a distinctive name, character or use different from the unassembled, and therefore are not a good of U.S. origin. The country of origin remains South Africa because they are not substantially transformed as a result of the U.S. processing. In the U.S., a new product is not made with the U.S. components; rather, the catalytic converter is just one component of the complete larger U.S. assembly consisting of the exhaust pipes and converters or the front assembly and converter.
The Importer remains the ultimate purchaser of only the imported catalytic converter. However, when further processed in the U.S. with specific U.S. components, e.g., ceramic mat, steel components including shell, and exhaust manifold pipes, etc., the ultimate purchaser is no longer the importer of the further processed converters sold downstream.
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. For tariff purposes, the courts have held that a substantial transformation occurs if a new and different article emerges having a distinctive name, character or use. Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
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 (or its container) imported into the U.S. 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 U.S. the English name of the country of origin of the article.
Your inquiry does not provide enough information for us to give a classification ruling on the Strapped Muffler. Your request for a classification ruling should include the following information:
Please provide a photo of the articles as they are imported (ex: clam shells, pipes, hangers, etc.)
Please explain what the “level” of a part signifies and why there are several parts that do not have a listed Country of Origin.
Fiberglass roving is mentioned on the schematic for the muffler, but there is no roving mentioned on the Bill of Material (BOM).
The BOM shows that the catalytic converter is foreign; is this the same Cat that is assembled in the United States and used in Item’s 1,2, and 4? If not, what is the condition of the Cat when it comes into the country?
When this information is available, you may wish to consider resubmission of your request. If you decide to resubmit your request, please include all of the material that we have returned to you.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Faingar at (646) 733-3010.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division