OT:RR:NC:N4:463
David Glynn
Holland & Hart LLP
555 17th Street
Denver, CO 80202
RE: Country of origin of a hybrid innerspring and foam mattress
Dear Mr. Glynn:
This letter is being issued in reply to your letter dated September 27, 2023, requesting a country of origin determination on behalf of your client, Sleeping Duck Pty Ltd. In lieu of samples, illustrative literature, pictures, and a product description were provided.
The SD Mach II Mattress will be imported in six sizes (Twin, Twin XL, Full, Queen, King, and California King) but their design, manufacturing operations, and manufacturing costs are sufficiently similar for us to treat them as one mattress in this ruling.
Per the requester’s submission, the subject mattress is a hybrid innerspring and foam mattress that can be customized by the user with the replacement of internal foam cushions of various densities in various zones. It is comprised of coil springs and polyurethane foam layers enclosed in a zippered textile cover. The foam pads are produced using a highly specialized Variable Pressure Foaming (VPF) technology that purportedly produces foam with a durable yet porous structure that overcomes the heat-trapping propensity of memory foam and standard foam mattresses. See images below:
MATTRESS IMAGE
EXPLODED VIEW OF MATTRESS
MATTRESS COMPONENTS
BreatheTech (outer) Cover – a 100% polyester zippered textile cover
AntiGravity (comfort layer) Foam – a high density, porous, breathable AirGrown (VPF technology produced) polyurethane foam comfort layer with a 100% polyester textile cover
ComponentAdapt Customization System – a high density AirGrown polyurethane foam layer, composed of a series of Precision Pads enclosed in a 100% polyester zippered textile cover
Precision Pads – high density AirGrown foam pads in a variety of densities (soft, medium, firm, extra firm) and sizes (half, segment, spacer), enclosed in 100% polyester zippered textile covers
Motherboard Spring Set System – a covered innerspring unit with a non-woven polyester fabric border and bottom
CHINESE INPUTS
BreatheTech Cover
AntiGravity (comfort layer) Foam Cover
ComponentAdapt Customization System Foam Covers
Motherboard Spring Set System
Packaging Materials
AUSTRALIAN INPUTS
AntiGravity (comfort layer) Foam
ComponentAdapt Customization System Foam
Labor (Assembly + Packaging)
CHINESE MANUFACTURING OPERATIONS AND COSTS
The BreatheTech (outer) Cover, AntiGravity (comfort layer) Foam Cover, ComponentAdapt Customization System Covers, Motherboard Spring Set System, and all packaging materials are made in China. These materials account for approximately 2/3 of the total mattress cost.
AUSTRALIAN MANUFACTURING OPERATIONS AND COSTS
The chemical precursors are metered, mixed and manufactured into AntiGravity (comfort layer) Foam blanks and ComponentAdapt Customization System Foam blanks using the highly specialized AirGrown (VPF Technology) System in Australia. The blanks are cut and inserted into their respective covers prior to being combined with a Motherboard Spring Set and encased in a BreatheTech (outer) Cover in Australia. The complete mattress is then compressed, vacuum sealed, and inserted into a wheeled box for shipping also in Australia. These operations account for approximately 1/3 of the mattress’s costs.
COUNTRY OF ORIGIN
Section 134.1(b), Customs Regulations (19 CFR 134.1(b)) defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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.” A substantial transformation occurs when articles lose their identity and become articles having a new name, character, or use.
Generally, the U.S. Court of International Trade has determined whether a substantial transformation has occurred by asking whether the manufacturing or processing substantially transformed the foreign materials in question into an article having a name, character or use different from the name, character, or use of those materials before such processing.
Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1317 (C.I.T. 2016) (quoting
Precision Specialty Metals, Inc. v. United States, 116 F. Supp. 2d 1350, 1364 (C.I.T. 2000)).
The primary focus of the substantial transformation test is whether the work or material added to an article in another country changed the character or use of the article. See Energizer, 190 F.
Supp. 3d at 1318. A party can show a change in the character of materials added during processing with evidence that the processing substantially altered the form of those materials.
Id. at 1318.
Under the CBP laws, if the article consists of materials produced, derived from, or processed in more than one country, it is considered a product of the country where it last underwent a “substantial transformation.” According to U.S. courts, a substantial transformation occurs when articles lose their identity as such and become new articles having a new “name, character or use.” In order to determine whether a substantial transformation has occurred, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article.
ANALYSIS
The requester asserts that the principal and final manufacturing operations used to produce the mattresses are performed in Australia and, in addition to providing a detailed explanation of both the Chinese and Australian manufacturing processes in their submission, the requester provides the following supporting rulings: HQRL H317645, NYRL N307432, and NYRL N319563. This office agrees.
The requester asserts that the essence and essential character of the subject mattress is imparted by the Australian-produced foam components and provides NYRLs N276753 and N321429 in support of their position. This office agrees with this characterization, that the Chinese materials (outer textile cover, inner textile cover, and spring set) taken either individually or together do not have the essential character of a mattress and that the mattress’s essential character is imparted by the Australian-produced foam pieces.
The requester asserts that the individual Chinese components lose their individual identity upon further processing/assembly in Australia and become a single article with a new name, character and use, that of a finished mattress. This office agrees with the requester that the Australian manufacturing satisfies all three prongs of this substantial transformation test. There is a change in name – from individual component parts to a finished mattress. There is a change in character – from parts not individually capable of providing the desired attributes of a foam hybrid mattress (body support while sleeping, pain relief, spine alignment) to a product offering these features. Finally, there is a change in use – from individual parts without separate utilitarian functions/uses to a single product geared toward a specifically identified purpose – sleep comfort.
The requester acknowledges that, while the final steps in the production of the subject mattress (inserting foam layers in textile covers, hydraulic pressing) in Australia are not complex, the operations prior to the final assembly (producing the AntiGravity (comfort layer) Foam and ComponentAdapt Customization System Foam) and packing are highly complex operations, requiring advanced skill and significant equipment investment.
HOLDING
In view of the facts set forth above, the country of origin for the SD Mach II Mattress is conferred in Australia.
This holding applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is 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. If the facts are modified in any way, or if the goods do not conform to these facts at the 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. Additionally, we note 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 CFR 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 Seth Mazze at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division