Hottinger Baldwin Measurements, Inc.
19 Bartlett Street
Marlborough, Massachusetts 01581
RE: The country of origin of strain gauges from China
Dear Ms. Libiszewski:
In your letter dated May 22, 2020, you requested a country of origin ruling.
The first item in question is a full bridge strain gauge (item # 2-9272.1472-1). This strain gauge is an electrical fixed resistor used to measure applied force.
The second item in question is a strain gauge assembly (item TGCA). This item is essentially an electrical fixed resistor with lead wires soldered to it. It is also used to measure applied force.
Both items undergo manufacturing processes in Germany and China.
The manufacturing steps preformed in Germany are as follows:
1. Strain gauge is designed, and foto-mask is produced
2. Preparation of measurement foil
3. Lamination of measurement foil and carrier to lamination-package
4. Pretreatment of lamination (cleaning and degreasing)
5. Foto-lithographic process to apply mask on lamination package
6. Etching process and quality check
7. Packaging up product to send to China
The finished product leaving the German facility for China is a strain gauge sheet consisting of 465 single functional strain gauges (picture submitted).
The manufacturing steps performed in China are as follows:
1. Items are unpackaged and optically inspected
2. Trimming of strain gauge resistance and zero balancing
4. Encapsulation grid, Charging, and Curing
5. Measurement of strain gauge resistance and zero balancing
6. Strain Gauges are cut from a sheet of 465 into single strain gauges
7. Final quality check is performed
8. Item is packaged
The TGCA device has one additional step after step 6, which is to manually solder lead wires to the strain gauge followed by the final quality check and packaging.
Additional email correspondence has been submitted which details the manufacturing steps enumerated above.
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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin."
For tariff purposes, 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
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). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
Based upon the facts presented, it is the opinion of this office that the manufacturing process that takes place in Germany is substantial and complex. The various manufacturing steps taken result in the actual formation of a functioning resistor element (465 single resistor elements per sheet). The various materials/components used are transformed in Germany into a different article with a new name, character, and use. The processing that takes place in China, does not result in a substantial transformation of the electrical fixed resistors. The process does not result in a new and different article of commerce with a name, character, and use. Therefore, the full bridge strain gauge (item # 2-9272.1472-1) and the strain gauge assembly (item TGCA) are considered products of Germany for origin and marking purposes at the time of importation into the United States.
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 Steven Pollichino at firstname.lastname@example.org.
Steven A. Mack
National Commodity Specialist Division