OT:RR:NC:N1:104
Cody Keser
Universal Logistics USA Inc.
2205 Kenmore Ave., Suite 106 Buffalo, NY 14207
RE: The country of origin of ratchet tie-downs and the applicability of certain trade remedies under Section 301
Dear Mr. Keser:
In your letter dated October 23, 2024, you requested a country of origin ruling on behalf of your client, Erickson Mfg. Ltd.
The goods under consideration are various styles of ratchet tie-downs, SKU nos. 78527, 78627, 34412, 34410, 55501, and 52300, whose function is to secure cargo or equipment during transport. Each ratchet tie-down consists of a gear and pawl ratchet assembly (comprised of a round gear with several teeth, two spring-loaded pawls that interact with the gear teeth, a center shaft, and a handle for leverage), a short length of woven polyester tie down strap, a long length of woven polyester tie down strap, and two metal hooks of various types, i.e., “S” hooks, flat hooks, and double-J-hooks. The short strap is stitched at one end to a metal hook and attached at the other end to the ratchet. The long strap is stitched at one end to a metal hook, and the other end left free to be fed into the slot of the ratchet during use.
In your submission, you describe two scenarios in which the ratchet ties-downs will be produced from components sourced from both Vietnam and China.
In scenario one, yarn spools are sourced from Vietnam-sourced and spun yarn. In Vietnam, the yarn spools are made into tie-down webbing through the use of looms and cut into short and long lengths for each end of the tie-down. The hooks and ratchet assembly, both produced and assembled in China entirely from Chinese origin components, are then exported to Vietnam for final assembly operations. In Vietnam, the webbing short ends are sewn to a hook and one end of the ratchet assembly, and the tie-down long ends are sewn into a hook and inserted into the ratcheting portion of the ratchet assembly.
The second scenario is similar to the first except that in scenario two, final assembly operations, i.e., the sewing of the tie-down short ends to a hook and one end of the ratcheting assembly, and the sewing of the tie-down long ends into a hook and their insertion into the ratcheting portion of the ratchet assembly, are performed in China rather than Vietnam.
When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
Based on the information provided, the character of the ratchet tie-down product is imparted by the woven straps, which are produced in Vietnam in both production scenarios. The straps maintain their name, character, and use as tie-down straps after being sewn to and assembled together with the Chinese-origin ratchet assembly and hooks in either Vietnam or China. Therefore, the country of origin of the complete ratchet tie-downs, SKU nos. 78527, 78627, 34412, 34410, 55501, and 52300, for both production scenarios, will be Vietnam; the relevant Section 301 provision does not apply. See HQ H305503, dated February 20, 2020.
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 and Border Protection 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, please contact National Import Specialist Arthur Purcell at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division