MAR-2 OT: RR: NC: N4:410
Ms. Lauren Wyszomierski
White & Case LLP
701 13th Street NW, Suite 600
Washington, DC 20005
RE: The country of origin of vacuum cleaners
Dear Ms. Wyszomiersk:
In your letter dated August 3, 2020, you requested a country of origin ruling on behalf of your client, Midea American Corporation.
The merchandise under consideration is identified as the “vacuum cleaner the NEU20 Series, BDLCR20 Series and HDUE2CR Series”, which includes four related models. These series models are bagless, electric-powered “stick” vacuum cleaners designed for household use. The only difference between the NEU20 Series and the HDUE2CR Series is color. The difference between the NEU20/HDUE2CR Series and the BDLCR20 Series is the appearance of the exhaust grill, as well as color. The vacuum’s power is 960W and its dust cup capacity is 2.1L. The vacuum cleaners are packaged for sale to individual consumers to be used as an upright vacuum. Each unit is sold in a single package together with its corresponding accessories. The models within the series vary slightly because they are sold into different markets with different color schemes, different accessories, or slightly different features. However, all of the models use the same platform, with only one or two parts that might vary between models in the series.
You present a processing scenario for the three Series for the country of origin determination. Under the scenario, the products’ materials and components are sourced from China and Vietnam and the final processing occurs in Vietnam. The NEU20 Series, BDLCR20 Series and HDUE2CR models are made from roughly over 40 components and sub-assemblies. Approximately 54% (by unit cost) of the listed components and sub-assemblies, such as the dust brush, switch pressure plate, crevice tool, body assembly and cover, foot assembly, pet tool, motor house assembly, dust cup assembly and cover, etc., including the instructional manual and packaging materials, are made in Vietnam. The balance of parts and assemblies, such as the motor pressure seat switches, handle hose assembly, cord rewinder, handle assembly, motor seal ring, power cord covers and cap, motor, self-locking switch, wiring harness, etc., are imported from China.
The laborers involved in the production of the vacuum cleaners in Vietnam include electricians, product engineers, test engineers and workers who are specially trained to ensure the product’s quality and specifications. Key sub-assemblies made in the Vietnamese factory include the dust cup sub-assembly and body sub-assembly, which go through 12 distinct assembly steps. The final assembly is conducted in a main assembly line, in which the major sub-assemblies are combined with other components for the production of the finished vacuums. This process consists of approximately 24 distinct and complex steps, generally including (A) assembly/manufacture, (B) testing and (C) packing. Each step is carried out by a different worker.
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 materials/components (e.g. motor pressure seat switches, handle hose assembly, cord rewinder, handle assembly, motor seal ring, power cord covers and cap, motor, self-locking switch, wiring harness) are imported into Vietnam where they are manufactured into different sub-assemblies, which are ultimately assembled into the subject NEU20 Series, BDLCR20 Series and HDUE2CR vacuum cleaners. We find that the processing performed in Vietnam with respect to the vacuum cleaners in the scenario does constitute a substantial transformation of the imported materials/components into "products of" Vietnam. There are significant components in the vacuum cleaners produced in Vietnam. The majority of the value of the making of the vacuum will be incurred Vietnam. The manufacturing process in Vietnam transforms the Chinese originating components/materials to produce the finished vacuum cleaners. 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. Therefore, the "product of" requirement has been satisfied. It is of the opinion of this office that the country of origin for the vacuum cleaners will be Vietnam.
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].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division