CLA-2-85:OT:RR:NC:N4:415
John M. Peterson
Neville Peterson, LLP
One Exchange Plaza
55 Broadway, Suite 2602
New York, NY 10006
RE: The country of origin of an electric bread maker.
Dear Mr. Peterson:
In your letter dated March 13, 2024, you requested a country of origin ruling on behalf of your client, Zojirushi America Corporation.
The product under consideration is the Zojirushi bread maker, model number BB-CEC20. It is a thermoelectric appliance which makes a rectangular two-pound loaf of bread, and has settings which also let it produce cake, dough, sourdough starter, jams, and meat loaf. It operates at 120 volts/7000 watts. The interior of the unit features twin kneading blades, for thorough kneading of doughs. It has a 13-hour delay timer and an auto shut-off function for safety. It has a large viewing window to allow the owner to observe bread baking and is operated by an LCD control panel.
In your request, you state that this bread maker is currently manufactured in China. Though, you indicate Zojirushi intends to move assembly to Thailand and this request follows that scenario.
Initially, a significant majority of the components will still be sourced from China, but over time, many of the plastic parts of the bread maker will ultimately be injection-molded in Thailand resins. These components would include: the lid, control panel, printed circuit board (PCB) holder, water cup, water spoon, vent cover, oven spacer, switch plate, LCD holder, switch spacer, double pulley, and single pulley.
Also, several of the steel components will ultimately be fabricated in Thailand from steel bar or steel sheet. These include: the metal lid, oven fuse holder, body, chassis, hinge pin, the upper fixed plate, the upper bowl shaft, the upper coupler, the latch, the drive shaft, and heater guide.
Additionally, the aluminum parts will eventually be made in Thailand from aluminum sheet and bar and die-cast aluminum. They would include: the bowl, motor pulley, mixing paddles, bowl base, and bowl adapter.
Per your submission, the PCB assemblies and heater units will be produced in Thailand from the inception of the change in operation.
The assembly process will occur in dozens of steps performed at multiple assembly workstations. The bowl base assembly will be prepared. The motor assembly and belt will be assembled into the base. Then, the bowl assembly is put together and inserted into the motorized base, along with the heating unit, fuse unit and mixing panels. The PCB is assembled by mounting the PCB, various LED lights, switches, and switch spacers. This unit is then joined with a cover.
The lid case is then positioned atop the bowl. The PCB unit is inserted into a cover and mounted on top of the unit. A glass window is installed into the lid, and the lid is mounted atop the device. Warning and safety labels are applied. Finally, the cord assembly is attached, and the bread maker is ready to be packaged.
These assembly operations will include internal wiring of the bread maker, followed by firmware loading and electrical testing. Specialized equipment will be used to produce the bread makers, including hand tools, electronic assembly equipment, and specialized testing equipment, together with automatic data processing devices to program the unit with firmware. Once fully assembled and tested, the finished bread maker will be packed and readied for shipment. You state all of these operations will occur in Thailand.
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 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
In order to determine whether a substantial transformation occurs when components are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character, and use has been produced. No one factor is decisive, and assembly/manufacturing operations that are minimal will generally not result in a substantial transformation.
This office reviewed the provided documentation for this planned scenario and is of the opinion that once the production of these bread makers moves to Thailand as indicated, with many of the parts being manufactured in Thailand, that the remaining Chinese sourced components would undergo enough of a change to afterwards emerge with a new name, character, and use that is different from what they possessed prior to processing, thus completing a substantial transformation. Therefore, from the details submitted, we agree that when the subject bread maker is being assembled in Thailand, the country of origin for it will be Thailand. Though, as you note it is currently manufactured in China, the country of origin will remain China until the details expressed above are met.
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. 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 Kristopher Burton at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division