MAR-2-44:OT:RR:NC:1:130
Mr. Kelley Edwards
Lumber Liquidators Services, LLC
4901 Bakers Mill Lane
Richmond, Virginia 23230
RE: The country of origin of multilayer wood flooring panels
Dear Mr. Edwards:
In your letter, dated August 19, 2020, you requested a binding country of origin ruling. The request was returned for additional information, which was received by this office on September 18, 2020. Manufacturing scenarios were provided for our review.
In your letter, you set forth three scenarios in which multilayer wood flooring panels will be manufactured. They are as follows:
In scenario 1, multilayer wood flooring with a plywood construction and a face ply of oak wood (Quercus spp.) will be manufactured in multiple countries. Oak logs harvested in France will be shipped to China, where they will be sliced into face veneers. The flooring panel core consists of eucalyptus wood (Eucalyptus spp.) that has been harvested and sliced into veneers in Indonesia. The back layer is also eucalyptus that has been harvested and sliced into veneers in Malaysia. All of the veneers measure less than 2mm in thickness. You explain that the multilayer plywood core will be manufactured in Indonesia. These cores and the face veneers will be shipped to Malaysia, where they will be combined with back plies and manufactured into flooring panels. The panels will incorporate Malaysian glue and Chinese coatings. All finishing operations – profiling, coating, and packaging – will take place in Malaysia.
In scenario 2, a three-ply flooring panel with a face ply of oak wood and a medium density fiberboard (MDF) core will be manufactured in multiple countries. Oak logs harvested in France will be shipped to China, where they will be sliced into face veneers measuring less than 2mm in thickness. The 8.5mm-thick MDF core layer will be manufactured in China. The back layer is a eucalyptus veneer that has been sliced in Malaysia from Malaysia-origin logs. The face veneer, MDF core, and back veneer will be combined and manufactured into flooring panels in Malaysia. The panels will incorporate Malaysian glue and Chinese coatings. All pressing, cutting, profiling, coating, and packaging operations will take place in Malaysia.
In scenario 3, a two-ply flooring panel with a face ply of oak and a pine lumber substrate will be manufactured in multiple countries. Oak logs harvested in France will be shipped to China, where they will be sliced into face veneers measuring less than 2mm in thickness. The 11.2mm-thick substrate layer is manufactured in China from assembled pine lumber blocks. The components will be shipped to Malaysia, where they will be combined and manufactured into flooring panels. The panels will incorporate Malaysian glue and Chinese coatings. All pressing, cutting, profiling, coating, and packaging operations will take place in Malaysia.
Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)) provides that the "[c]ountry 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 Part 134, Customs Regulations (19 CFR Part 134). Substantial transformation requires that "[t]here must be a transformation; a new and different article must emerge, ‘having distinctive name, character, or use.’" Anheuser-Busch Brewing Association v. United States, 207 U.S. 556, 28 S. Ct 204 (1908). We must therefore determine if and/or where a substantial transformation of materials occurs in order to determine country of origin.
In scenario 1, the lamination of a face veneer to a plywood core does not effect a substantial transformation. Wood logs from France, classified in heading 4408, Harmonized Tariff Schedule of the United States (HTSUS)) are sliced into veneers in China, which are classifiable in heading 4408, HTSUS. This is a substantial transformation, as the manufacturing results in a new and different article. The country of origin of the veneer is China. In Indonesia, veneers (heading 4408) are manufactured into a plywood panel (heading 4412) that will form the floor panel core. “Plywood” is defined in the Explanatory Notes to the Harmonized System (ENs) as a panel “consisting of three or more sheets of wood glued and pressed one on the other and generally disposed so that the grains of successive layers are at an angle.” This manufacturing constitutes a substantial transformation and the country of origin of the plywood core is Indonesia. The back veneer is Malaysian in origin. In Malaysia, the face veneer, plywood core, and back veneer are combined, manufactured, and finished to form a multilayer flooring panel. The completed panel also meets the above definition of “plywood”, and is classified in heading 4412, HTSUS. As the core manufactured in Indonesia is plywood of heading 4412, and the final flooring product manufactured in Malaysia is plywood of heading 4412, the manufacturing in Malaysia does not result in a new and different article. Therefore, the country of origin of this panel remains Indonesia.
In scenario 2, the manufacturing of a veneered panel does effect a substantial transformation. China-origin face veneers (heading 4408) and China-origin MDF sheet cores (heading 4411) are shipped to Malaysia, where they are joined with Malaysia-origin back veneers and manufactured into multilayer flooring panels (heading 4412). In this scenario, the undedicated, multiuse veneers and MDF are combined and manufactured into a new and different product in Malaysia - a veneered panel used for flooring (heading 4412). A “veneered panel” is defined in the ENs as “panels consisting of a thin veneer of wood affixed to a base, usually of inferior wood, by glueing under pressure.” Therefore, the country of origin of this panel is Malaysia.
In scenario 3, the manufacturing of a veneered panel does effect a substantial transformation. China-origin face veneers (heading 4408) and China-origin lumber substrates (heading 4421) are shipped to Malaysia, where they are combined and manufactured into multilayer flooring panels (heading 4412). In this scenario, the substrates that are manufactured from positioned lumber blocks are combined with the face veneers, and are manufactured into a veneered panel used for flooring. This manufacturing constitutes a substantial transformation as multiuse materials – veneers and a lumber sheet – are manufactured into in a new and different article, a veneered panel. Therefore, the country of origin of this panel is Malaysia.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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 Laurel Duvall at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division