MAR-2:OT:RR:NC:N2:206
Jon R. Weiner
Global Customs Governance Leader
GE Aviation
1 Neumann Way
Cincinnati, Ohio 45215
RE: The country of origin of aircraft engine components.
Dear Mr. Weiner:
This is in response to your letter dated May 26, 2020, requesting a ruling on the country of origin for aircraft engine components. Pictures, diagrams, and descriptive literature were provided with your request.
The items under consideration have been identified as Aircraft Engine Seals, Combustion (Combustor) Cases, Compressor Rotor Disks, Blisks (Bladed Compressor Rotor Disks), and Stage 1 Bolt Covers. You state that aircraft engine forgings and castings, which approximate the outline of the finished aircraft engine parts they will form are made of steel, nickel, or titanium. The forgings and castings are produced in the United States by various metal works companies to GE specifications on material and shape, and then exported from the United States to various machine shops in China for milling, drilling, and finishing processes.
The "country of origin" is defined in 19 C.F.R 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. For country of origin marking purposes, a substantial transformation of an article occurs when it is used in manufacture, which results in an article having a name, character, or use differing from that of the article before 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. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
Under Section 134.32(m), CBP Regulations, products of the United States that are exported and returned are excepted from the country of origin marking requirements of 19 U.S.C. Part 1304.
In National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993), the court considered sockets and flex handles which were either cold formed or hot forged into their final shape prior to importation, speeder handles which were reshaped by a power press after importation, and the grip of flex handles which were knurled in the U.S. The imported articles were then heat treated which strengthened the surface of the steel, and cleaned by sandblasting, tumbling, and/or chemical vibration before being electroplated. In certain instances, various components were assembled together which the court stated required some skill and dexterity. The court determined that the imported articles were not substantially transformed and that they remained products of Taiwan. In making its determination, the court focused on the fact that the components had been cold-formed or hot-forged “into their final shape before importation,” and that “the form of the components remained the same” after the assembly and heat-treatment processes performed in the U.S. Although the court stated that a predetermined use would not necessarily preclude a finding of a substantial transformation, it noted that such determination must be based on the totality of the evidence. The court then concluded that no substantial change in name, character or use occurred as a result of the processing performed in the U.S.
In Superior Wire v. United States, 867 F.2d 1409 (Fed Cir. 1989), the court held that wire rod made into wire in Canada was not substantially transformed because there was no significant change in use or character. The court noted that the strength characteristic of the wire was “metallurgically predetermined” and the changes were primarily cosmetic. The court viewed the wire rod and wire as “different stages of the same product.”
In HQ W968396, dated December 21, 2006, CBP considered a very similar to your case scenario. It stated that drill bit blanks made in the United States were exported to China, where they were further processed into the finished drill bits. The processing performed included adding grooves by fluting, straightening, polishing, heat treating and cleaning the drill bit blanks. CBP found that the drill bit blanks and the finished drill bits represent “different stages of the same product.” Like the wire rod in Superior Wire and the hand tool components in National Hand Tool, the drill bit blanks underwent no significant change in character or use when they were processed into the finished drill bits in China. In other words, the drill bit blanks had the very essence of the finished drill bits and the processing that were performed in China did not change the shape, character or predetermined use of the drill bits.
Similarly, in this case, GE Aviation is exporting forgings and castings made in the United States to China, where they will be further processed into the finished aircraft engine components. The processing that will be done in China includes milling, drilling, and finishing processes. We believe that the processing operations that will be conducted in China are basically finishing operations that will not change the basic nature of the aircraft engine components. The aircraft engine forgings and castings made in the United States will have the same size and shape as the finished components. Significantly, the forgings and castings shipped to China are clearly dedicated for use in an aircraft engine, and they cannot be used for any other purpose. It is our opinion that the aircraft engine forgings and castings and the finished Aircraft Engine Seals, Combustion (Combustor) Cases, Compressor Disks, Blisks (Bladed Compressor Rotor Disk), and Stage 1 Bolt Covers represent “different stages of the same product.” Like the wire rod in Superior Wire and the hand tool components in National Hand Tool, we find that the aircraft engine forgings and castings undergo no significant change in character or use when they are processed into the finished aircraft engine components in China.
Based on the information and the pictures submitted and in accordance with the above analysis, we find that the forgings and castings are not substantially transformed by the proposed processing to make them into finished Aircraft Engine Seals, Combustion (Combustor) Cases, Compressor Disks, Blisks (Bladed Compressor Rotor Disks), and Stage 1 Bolt Covers in China. Therefore, we find that the country of origin of the finished aircraft engine components is the United States, and thus in accordance with19 C.F.R. 134.32(m) they are not required to be marked to indicate their country of origin.
Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the USA.
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, please contact National Import Specialist Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division