OT:RR:NC:N2:206
Ryan Raynak
HG Enterprises LLC
102 Broadway Street, Suite 205 Carnegie, PA 15106
RE: The country of origin of a bent axis hydraulic motor
Dear Mr. Raynak:
In your letter dated March 28, 2024, you requested a country of origin ruling on a bent axis motor, which you filed on behalf of your client, Linde Hydraulics Corp.
The article under consideration is a Bent Axis Hydraulic Motor. The hydraulic motor converts hydrostatic energy into mechanical energy. The hydraulic fluid is directed via the port plate housing and the port plate to the cylinder bores from the cylinder block. The pistons in the cylinder bores execute a stroke which is converted into rotation by the pistons at the drive shaft flange. During this process, the pistons move the cylinder block and generate an output torque at the drive shaft. The output torque increases with the pressure difference between the high-and-low-pressure sides and increasing displacement. The output speed is proportional to the inward flow and inversely proportional to the displacement of the hydraulic motor.
The swivel angle of the bent axis rotatory group of the base unit can be varied by the controller. Control of the swivel angle of the bent axis rotatory group changes the piston stroke and therefore the displacement.The swivel angle is controlled hydraulically by the control piston. The cylinder block, including piston and port plate is swiveled thereby. Increasing the swivel angle results in an increase in the displacement and specific torque; decreasing the swivel angle results in a corresponding decrease of these values.
You state that the base unit is made in China and imported into Germany for further processing. You further state that the controller is designed, sourced, and assembled in Germany, and then assembled to the base unit. The complete motor is then parameterized, tested, painted, and undergoes quality control in Germany before importation into the United States.
You provided this office with subheading 8412.29.81, which corresponds to the Common European Tariff. Please note that upon importation to the United States, the applicable subheading for the Bent Axis Hydraulic Motor will be 8412.29.8045, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other engines and motors, and parts thereof: Hydraulic power engines and motors: Other: Other: Unlimited rotary acting: Axial piston type. The rate of duty will be Free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8412.29.8045, 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., 9903.88.01, in addition to subheading 8412.29.8045, 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, including information on exclusions and their effective dates, 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.
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.
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."
The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982).
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).
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. 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 the information supplied to this office, no substantial transformation occurs in Germany. The Chinese base unit remains intact after the installation of the controller in Germany. As a result, we need to determine the character of the hydraulic motor. Typically, hydraulic motors convert fluid pressure into rotary motion. The base unit appears to have all the necessary components, such as the rotary group, to achieve this without the controller. The controller only controls the swivel angle and changes the displacement and torque. Therefore, the character of the bent axis hydraulic motor is the base unit from China and the country of origin for the complete product will be China, and thus, it is subject to trade remedies under Section 301 of the Trade Act of 1974, as amended, from China.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division