CLA-2-73:OT:RR:NC:N1:121
George R. Tuttle, III
Tuttle Law Offices
1100 Larkspur Landing Circle, Suite 385
Larkspur, CA 94939
RE: The country of origin of threaded steel eye bolts
Dear Mr. Tuttle:
In your letter dated September 4, 2019 you requested a country of origin ruling on behalf of Hampton Products International. This office has examined the samples you submitted and will retain them in this office for future reference.
The article under consideration is described as an eye bolt with threaded nut. It is 5/16ths of an inch or approximately 7.94 mm in diameter and 3 ¼ inches long. You note the threaded steel eye bolt is classified under HTS code 7318.15.2046, which provides for Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel: Threaded articles: Other screws and bolts, whether or not with their nuts or washers: Bolts and bolts and their nuts or washers entered or exported in the same shipment: having shanks or threads with a diameter of 6 mm or more: Bent bolts: Other.
Your proposed production process involves using coiled steel wire rod produced in Taiwan. The wire rod would be straightened, drawn to a diameter slightly less than 5/16ths of an inch, and cut to lengths of approximately 149.225 mm in Taiwan. The wire rods would them be shipped to China where one machine will bend the rod to form the eye, and another machine, using a high-pressure roller, will press and form the desired thread pattern to complete the finished eye bolt. The finished eye bolt will be heated in an oven to give the eye bolt strength, followed by a rapid cooling, and then reheated again, after which it will be assembled with a nut of either Chinese or Taiwanese origin. The finished eye bolt will then be labeled, packaged and exported to the United States.
With regard to your request for the appropriate country of origin of the eye bolt, 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. 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. 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); Superior Wire v. United States, 669 F. Supp. 472 (CIT), aff’d, 867 F. 2d 1409 (Fed. Cir. 1989); Ferrostaal Metals Corp. v. United States, 664 F. Supp. 535 (CIT 1987).
In National Hand Tool Corp. v. United States, the court considered sockets and flex handles which were either cold formed or hot forged into their final shape prior to importation, speeder handles which were reshaped by a power press after importation, and the grip of flex handles which were knurled in the U.S. The imported articles were then heat treated which strengthened the surface of the steel, and cleaned by sandblasting, tumbling, and/or chemical vibration before being electroplated. In certain instances, various components were assembled together which the court stated required some skill and dexterity. The court determined that the imported articles were not substantially transformed and that they remained products of Taiwan. In making its determination, the court focused on the fact that the components had been cold-formed or hot-forged "into their final shape before importation," and that "the form of the components remained the same" after the assembly and heat-treatment processes performed in the U.S. Although the court stated that a predetermined use would not necessarily preclude a finding of a substantial transformation, it noted that such determination must be based on the totality of the evidence. The court then concluded that no substantial change in name, character or use occurred as a result of the processing performed in the U.S.
Regarding the country of origin of the subject eye bolts, based on the information provided in your request, it appears that these nonalloy cut-to-length rods made in Taiwan are classified in subheading 7214.99. In our opinion, as exported to China, there is nothing unique or outstanding that would dedicate these for use in the manufacture of eye bolts unlike the components in National Hand Tool. These are merely cut pieces of rod. It is the further opinion of this office that the processing operations performed in China, which consist of bending the wire rod to shape to form the eye, applying threads, and the heating and strengthening processes, are significant processes that effect a change to the steel wire rods from Taiwan. In our view, the Chinese processes described transform the individual nonalloy cut-to-length rods into a new and different product having a new function and purpose. Therefore, based upon the facts presented, it is the opinion of this office that the processing performed in China results in a substantial transformation of the individual components into a new and different article of commerce with a name, character, and use distinct from the imported nonalloy cut-to-length rods. As such, the subject eye bolts would be considered a product of China for origin purposes at the time of importation into the United States.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 7318.15.2046, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 7318.15.2046, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current.
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 Jennifer Jameson at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division