MAR-2 OT: RR: NC: N4:410
White & Case LLP
701 13th Street
Washington, DC 20005
RE: The country of origin of a gas grill
Dear Ms. Kepkay:
This is in response to your letter dated December 1, 2022, on behalf of your client Midea America Corporation, requesting a country of origin determination of a gas grill for purposes of Section 301 duties.
The merchandise under consideration is a gas grill, Model GSP51N-1A. Model GSP51N-1A is a four-burner or a five-burner gas grill designed for outdoor use.
You present a manufacturing process scenario, in which the factory in Vietnam assembles the components of both Chinese origin and Vietnamese origin to manufacture the gas grills, including the production of several key sub-assemblies (i.e., the top lid and grill cart) and the final assembly process occurred in Vietnam. The entire production process requires approximately 150 professionally-trained workers involving numeral processing steps, each step may consist of multiple sub-steps. The plant floor is divided into the sub-assemblies workshop (stamping, welding) and the main assembly workshop.
Specifically, the key sub-assemblies are produced in Vietnam with the components of both Chinese origin and Vietnamese origin through a series of stamping, welding and punching operations:
1) Top lid outer plate: This component is a frame for the top lid sub-assembly. Its production process includes six steps.
2) Top lid left and right side plates: These components are located on the left and right sides of the top lid sub-assembly. Their production process includes four steps.
3) Top lid inner plate: This component is located on the inside of the outer plate of the top lid. Its production process includes four steps.
4) Grill cart upper and lower front plates: These components are located on the front of the grill cart sub-assembly, and are screwed to the cart legs. Their production process includes four steps.
5) Top lid weldment: This component is produced by spot-welding the top lid left and right side plates respectively to the top lid outer plate. Its production process includes two steps.
The pre-assembly of sub-assemblies process is performed before the final assembly, which includes the operations of top lid sub-assembly and the grill cart sub-assembly. Each of these operations needs multiple processing steps.
The final assembly (performed in Vietnam) is followed to make the finished products, which includes the top lid sub-assembly installation, burn testing and airtightness testing, inspection, and packaging and packing. It involves nine major steps.
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, the components and parts are imported from China into Vietnam where they are manufactured into different subassemblies, which are ultimately assembled into the subject grills. We find that the processing performed in Vietnam with respect to the grills in the scenario does constitute a substantial transformation of the imported components and parts into "products of" Vietnam. The manufacturing process in Vietnam involves complex and skilled operations, which is more than a simple assembly, and transforms the non-originating components and parts to produce the finished grills. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into Vietnam. 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). It is of the opinion of this office that the country of origin for the grills will be Vietnam. Thus, Section 301 duties do not apply.
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 Michael Chen at [email protected].
Steven A. Mack
National Commodity Specialist Division