MAR-2 OT:RR:NC:N1:102

Ms. Allison Kepkay
White & Case LLP
701 13th Street, NW
Washington, DC 20005

RE: The country of origin of unassembled table fans and the applicability of certain trade remedies under Section 301

Dear Ms. Kepkay:

In your letter dated September 13 2019, on behalf of Midea America Corporation of Parsippany, New Jersey, you requested a ruling on the country of origin. A detailed description of the manufacturing and assembly processes was submitted for our review.

The products under consideration are referred to as table fans, model numbers FT30-8MB and FT30-16J. The 12-inch table fans are for household use and the base of each table fan allows each fan to be placed on a flat surface, such as a table. The production of each table fan consists of manufacturing structural components in Vietnam followed by the assembly of a motor/fan base column unit in Vietnam. The motor/base column unit consists of a motor from China being assembled to components from Vietnam.

The production of each table fan begins by manufacturing the structural components of the table fan using an injection molding process in Vietnam. The components of each table fan that are manufactured using an injection molding process are the fan blade, the motor front housing assembly, the motor back shell, the base column, the base, the decorative ring and for model number FT30-8MB, the body plate.

The assembly process for each motor/fan base column unit begins by installing a rotary axle pin to the shaft of the motor, which is of Chinese origin. The connecting rod is then installed into the crankshaft and afterwards, the connecting rod is affixed to the Chinese connector assembly and the crankshaft screw of the motor tooth box. The key switch is then fastened and an angle positioning plate from China is installed on the connector. The power cable, which is of Chinese origin, is fastened to the base of the motor and the motor cord is inserted thought the base column. The process continues with the connector being screwed to the base column. The gear cables are then positioned and the piano-key switch is fastened to the base column. Afterwards, the front and rear shells of the motor are installed and affixed to the motor and the oscillating control button is placed in the rear hole. Upon completion, each unit undergoes various inspections and testing. Once the unit is removed from the assembly line, it is packaged together with the decorative ring, the fan blade, the base and the front and rear guards, in a single box.

General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), states in part that for legal purposes, classification shall be determined according to the terms of the headings, any relative section or chapter notes. However, in the event that merchandise cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may be applied, taken in order. GRI 2(a), HTSUS, states, “Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled”.

Here, the merchandise, which is packaged together, is imported disassembled and after being imported into the United States, the parts are assembled to each other to form complete table fans. Therefore, in accordance with GRI 2(a), the unassembled components of the table fans, packaged together to form model numbers FT30-8MB and FT30-16J, will be classified under subheading 8414.51.9090, HTSUS, which provides for Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof: Fans: Table, floor, wall, window, ceiling or roof fans, with a self-contained electric motor of an output not exceeding 125W: Other: Other. The general rate of duty will be 4.7 percent ad valorem.

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.

With regard to your request for the appropriate country of origin of the unassembled table fans, 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, and 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”. 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.

Based on the scenario described above, various structural components of the table fans, to include the motor front housing assembly, the motor back shell and fan base column are manufactured in Vietnam. These structural components are combined with Chinese components and the nature of the processing performed in Vietnam is one in which the foreign components lose their separate identities to become a new article, e.g. a motor/fan base column unit for a table fan. Other structural components made in Vietnam, such as the fan blade and the base are packaged with the motor/fan base column unit. Subsequent to importation, the components will be assembled to each other to form complete table fans. Thus, the country of origin of the unassembled table fans will be Vietnam. Accordingly, the unassembled table fans are not subject to the Section 301 trade remedy.

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 Sandra Martinez at [email protected].

Sincerely,

Steven A. Mack
Director
National Commodity Specialist Division