CLA-2-74:OT:RR:NC:N1:116
Mr. Reid Whitten
Sheppard, Mullin, Richter & Hampton LLP
2099 Pennsylvania Avenue NW, Suite 100
Washington, DC 20006
RE: The country of origin of SharkBite Max couplings, connectors, and end caps
Dear Mr. Whitten:
In your letter dated June 24, 2022, you requested a country of origin ruling determination on behalf of your client, Reliance Worldwide Corporation (“RWC”).
The products under consideration are identified as RWC’s SharkBite Max Couplings, Connectors, and End Caps. The SharkBite Max Coupling is described as a short, open tube fitted at each end with a patented SharkBite push-to-connect mechanism. The function of the coupling is to connect two bare pipes with the push-to-connect mechanism at each end. The SharkBite Max Connector is described as a short, open tube fitted at one end with a patented SharkBite push-to-connect mechanism. Unlike the SharkBite Max Coupling, the SharkBite Max Connector is threaded to accommodate a male threaded pipe into one end of the Connector while the other end can be affixed to a bare pipe by the push-to-connect mechanism. The SharkBite Max End Cap is described as a short, open tube fitted at one end with a patented SharkBite push-to-connect mechanism. The other end is sealed to stop the flow of liquid or gas without the use of special tools, glue, crimping, soldering, or unions.
The SharkBite Max Connector and the SharkBite Max End are both comprised of seven components, with six of those components being identical. The SharkBite Max Coupling has a set of the same six components on each end of the coupling for a total of 13 components. The six identical parts are F970 (AU SharkBite O-Ring), UR930-4 (US SharkBite Max Protection Ring), F910 (Grab Ring SharkBite), UR930-3 (US SharkBite Max Demount Ring), UR930-2 (US SharkBite Max Cartridge Ring), and UR930-5 (SB Gen 5 SS Retainer). The difference between the three products is the end that either connects to a second tube with a push-to-connect end (part number UR008-1) or the end that connects to a second tube with a threaded end (part number UR072-1) or the end that seals off a single tube (part number 07.UR514-1). Part numbers UR008-1, UR072-1, 07.UR514-1, UR930-2, UR930-3, and UR930-4 are manufactured in China. Part number F970 is manufactured in the European Union (E.U.). Part number UR930-5 is manufactured in either the E.U., the United States (U.S.), or China. Part number F910 is manufactured in either the E.U. or China.
After manufacture in their respective countries, the individual parts are shipped to Vietnam to be assembled into the finished product. You have described the assembly as a 14 step process that includes seating an O-ring, a subassembly of the protection ring, grab ring, demount ring, and cartridge ring, with the final assembly step of securing the subassembly to the brass body with the stainless steel retainer. After assembly, the products undergo quality control inspection and testing procedures.
Pursuant to Part 134, Customs Regulations (19 CFR §134) implements the country of origin marking requirements and exceptions of 19 USC 1304. Section 134.1(b), Customs Regulations (19 CFR § 134.1(b)), defines “country of origin” as: “[t]he 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.” A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
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, or 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 may be considered when determining whether a substantial transformation has occurred. No one factor is determinative. Assembly operations that are minimal will generally not result in a substantial transformation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97.
You have stated that the assembly of the parts into the final product is a more complicated process than mere assembly, constituting a substantial transformation in Vietnam and cite many prior rulings to substantiate your claim.
You cite HQ 735048, dated October 27, 1993, as taking the position that a substantial transformation is affected by processing a coupling body that lacks features that would characterize the article as a coupling into a coupling by changing its dimensions, finishing its ends, and threading it.
You state that HQ 731926, dated June 3, 1991, determined that a change in the actual dimensions of imported forgings to resemble the size and shape of the finished article constituted a substantial transformation.
You also cite N087858, dated January 8, 2010, stating that it determines that additional work and materials added to kitchen and bath cabinetry kits constitutes more than mere assembly.
You state that HQ H118435, dated October 13, 2010, determined that the assembly of imported parts together with U.S. made components which were “functionally necessary” to the operation of an electric vehicle constituted more than mere assembly.
You also cite HQ 562842, dated November 20, 2003, which determined that operations that give the final shape and essential characteristics to cutter and lug forgings was a substantial transformation.
Also, you refer to NY N309562, dated March 4, 2020, which stated that a number of factors, including the number of components assembled, the number of different operations, the time, skill level, and attention to detail required, the extent and nature of post-assembly inspection and testing procedures, the value added to the article, and the overall employment generated by the manufacturing process will affect the determination of whether a substantial transformation has occurred.
In rulings HQ 735048, HQ 731926, H562842, and N087858 additional processing such as machining to achieve final dimensions, cutting parts from material lengths to final dimensions, as well as machining to achieve the final shape of an article was done in the country of assembly prior to the assembly. In the scenario before this office, no further processing, minor or major, is done in Vietnam prior to assembly.
In ruling H118435, it was determined that the individual Chinese-origin components were substantially transformed by the assembly operations because the imported parts lost their individual identities and became an integral part of a new article possessing a new name, character, and use. In the case before this office, while the components do become an integral part of the article, it is not a new article nor do the components lose their individual identity.
In ruling N309562, it was determined that the operations performed in China were not complex or meaningful enough to constitute a substantial transformation. In the scenario at hand, the coupling body, the connector body, and the end cap are finished goods that are manufactured and finished in China. They have a pre-determined use, and no further processing of these individual components is needed before assembly in Vietnam.
It is the opinion of this office that the assembly, inspection, and testing operations performed in Vietnam are not complex or meaningful enough to constitute a substantial transformation. As such, we find that the country of origin of the SharkBite Max Coupling, the SharkBite Max Connector, and the SharkBite Max End Cap to be China. As the essence of each of the SharkBite Max fittings is the brass body, Trade Remedy Section 232 additional duties do not apply.
To determine whether Trade Remedy Section 301 additional duties apply, a classification to the eight-digit level is necessary. The appropriate subheading for all three SharkBite Max fittings is 7412.20.00, Harmonized Tariff Schedule of the United States, which provides for copper tube or pipe fittings (for example couplings, elbows, sleeves): of copper alloys: other: of copper-zinc base alloys (brass).
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). Products of China that are provided for in subheading 9903.88.01, 9903.88.02,
9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings.
Products of China classified under subheading 7412.20.00, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 7412.20.00, HTSUS.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
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 Angelia Amerson at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division