CLA-2-90:OT:RR:NC:N1:105
Martha J. Kauffman
Trimble Inc.
935 Stewart Drive
Sunnyvale, CA 94085
RE: The country of origin and application of Section 301 trade remedy of the LL300N transmitter
Dear Ms. Kauffman:
In your letter dated September 6, 2019, you requested a ruling on the country of origin and application of Section 301 additional duties for the LL300N transmitter.
The product under consideration is the self-leveling Spectra Precision LL300N transmitter (laser level). The device is a rugged laser level designed to handle a wide variety of general and concrete construction applications.
In your request, you provided a description of the manufacturing process for the LL300N transmitter. The device has four main components that, once assembled, make up the finished LL300N transmitter. The four main components are the compensator, the leveling platform, the bottom housing assembly and the battery door assembly.
The compensator provides the self-leveling portion of the LL300N transmitter. There are various components that go into the compensator including motors (Germany), calculator board (Malaysia), leveling vials (United Kingdom), laser diodes (Japan), IR-LED (Malaysia), prism (China), gearwheels (Germany) and the IR Receiver TSOP32230 (Philippines). The components are imported separately into China where final assembly is completed.
The leveling platform houses the battery and contains the motor that levels the LL300N. The leveling platform contains the step motor (China) for the LL300N transmitter, which, when connected to the compensator, allows for the LL300N transmitter to function.
The bottom housing assembly and battery door assembly serves to contain the compensator and leveling platform and protect it from severe drops and damage. Their purpose is to connect the leveling platform to the compensator. Both items are country of origin China.
All research and development (R&D) for the LL300N transmitter is conducted in Germany.
With regard to your request for the appropriate country of origin of the LL300N transmitter, 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. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive. Assembly operations that are minimal will generally not result in a substantial transformation.
In this instance, motors and gearwheels- from Germany, calculator boards and IR-LEDs from Malaysia, leveling vials from the United Kingdom, laser diodes from Japan, and the IR Receiver TSOP32230 from the Philippines are shipped to China where they are assembled with Chinese-origin components into the final product, the LL300N transmitter. It is this office’s opinion that the assembly operations performed in China, which consist of assembling the individual components (such as the vials and the laser diode) into the compensator, and then final assembly of the compensator, together with the leveling platform, the bottom housing assembly and the battery door assembly into a functional LL300N transmitter, are significant and effect a change in the components as well as the transmitter. In our view, the assembly process described transforms the individual components into a new and different product having a new function and purpose. In view of these facts, the country of origin is China.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9031.49.9000, 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 9031.49.9000, 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, 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.
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 Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division