MAR-2 OT: RR: NC: N4:410

Paul Chyterbok
Morrison Express Corp. USA
2000 Hughes Way
El Segundo, CA 90245

RE: The country of origin determination of a robotic vacuum cleaner from China

Dear Mr. Chyterbok:

In your letter dated November 18, 2022, you requested a country of origin ruling on behalf of Neato Robotics, Inc. Pictures and product specifications were submitted with your request.

The product is identified as the Neato Intelligent Robot Vacuum ("vacuum cleaner"), which is a Wi-Fi connected mapping and navigating vacuum robot cleaner used to clean floors. The vacuum's power is 30 W, and its dust cup capacity is 0.7 L designed for domestic use. Each unit is sold in a single package together with its corresponding accessories for retail sale. The models within the series may vary slightly because they are sold into different markets with different color schemes, different accessories, or slightly different features. However, the models all use the same platform, with only one or two parts that may vary between models in the series. The vacuum cleaner's accessories include a rechargeable battery, a bin filter, an auto evacuation dock and line cord, and a docking station for recharging. All these accessories are of Chinese origin and specifically intended solely for use with the Neato vacuum cleaner. The vacuum cleaner may also include an optional accessory known as a cleaning base which is of German origin.

You present a manufacturing processing scenario for the country of origin determination of the vacuum cleaner. Under the scenario, only the Printed Circuit Board Assembly (PCBA) is manufactured in Vietnam, and all other components except for a plastic pulley form Poland and a laser module from Taiwan, are made in China. The final assembly process consists of incorporating all the Chinese origin components or parts with the imported components (Vietnam originated PCBAs, Poland originated pulley and Taiwan originated laser module) to manufacture the finished vacuum cleaners.

In Vietnam, the PCBA is assembled using Surface Mount Technology (SMT) and the software to operate the vacuum cleaner is installed. The PCBA comprises approximately 738 components that are sourced in different countries imported into Vietnam, wherein all these components are subjected to the SMT procedure including various testing and quality control procedure.

All other components, modules, assemblies, and parts (except for a plastic pulley from Poland and a laser module from Taiwan) are manufactured in China. They include the motors, wheel modules, main brush assembly, battery subassembly, top cover subassembly, bumper subassembly, chassis subassembly, debris bin, plastics housing and rubber, light touch assembly, ground sensor, wiring and screws, plastic shells and faceplates (housings for the various modules), packing and packaging materials, etc. The manufacturing process in China has numerous distinct steps of producing approximately 328 components, assembling these components/materials with the imported components into subassemblies, and then combining the subassemblies into the finished vacuum cleaners. This manufacturing process includes soldering, plastic injection molding, etc., which require sophisticated tooling and equipment. The manufacturing process along with a series of inspection and the testing requires the employment of skilled workers, technicians, and engineers.

You state that, even though the final assembly occurs in China, the manufacturing process and final assembly would be considered a simple assembly which should not be defined as a substantial transformation. The extent of the simple assembly merely consists of affixing the brushes, filter, and battery onto the casing. You further state that, the Vietnamese origin PCBA's make up 82% of the total cost, and they should also be considered the single material that imparts the essential character of the good. Given the complex manufacturing and assembly process of the PBCA's, the cost of the goods and labor and the quality control testing procedures occurred in Vietnam, the country of origin for vacuum cleaner should be Vietnam.

We disagree.

Section 134.1(b), Customs Regulations (19 C.F.R. 134.1(b)), defines "country of origin" 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".

In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item's components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative.

Based on the information submitted, all the components/materials and parts (except for the PCBA's, a plastic pulley and laser module), are made in China, where the PCBA's combined with other components and manufactured into different subassemblies, which are ultimately assembled into the subject vacuum cleaners. We find that the processing performed in China with respect to the vacuum cleaners under the scenario does constitute a substantial transformation of the imported PCBA's and other imported components into "products of" China. In this case, the manufacturing process in China transforms the non-originating materials (PCBA's, plastic pulleys and laser modules) in the manufacturing of the vacuum cleaners. The PCBA by itself does not determine the country of origin of the vacuum cleaner. Instead, the manufacturing performed in China involves complex and skilled operations and is more than a simple assembly. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into China. 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). Therefore, it is of the opinion of this office that the country of origin for the vacuum cleaner is China.

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).

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 Michael Chen at [email protected].


Steven A. Mack
National Commodity Specialist Division