OT:RR:NC:N1:103
Kensie Sugama
Trade Pacific PLLC
700 Pennsylvania Ave. SE, Suite 500
Washington, DC 20003
RE: The country of origin of crawler hydraulic excavators
Dear Ms. Sugama:
In your letter dated March 26, 2025, you requested a country of origin ruling on behalf of your client, PT
SANY Indonesia Machinery.
The merchandise under consideration is identified as the SY50 crawler hydraulic excavator and the SY60
crawler hydraulic excavator. The SY50 and SY60 series of excavators are described as self-propelled
earthmoving machinery with a tracked undercarriage, a revolving superstructure, and a mechanical boom and
arm. Compared to the SY50, the SY60 is larger in size, and has a greater digging depth and gross power.
Both models will be imported into the United States without a primary attachment but will be equipped with
a bulldozer blade attached to the undercarriage.
You state that the subject hydraulic excavators will be manufactured in Indonesia by the same workers, on
the same production line, and follow the same assembly steps as described in New York ruling N337356,
dated January 24, 2024, which concerned the SY35 hydraulic excavator.
The process begins with manufacturing the key structural assemblies, identified as the boom, arm, lower
frame, and upper frame. All the key structural assemblies and their metal forms will be created in Indonesia.
The upper frame is described as the structural foundation used to support the boom, arm, engine, cab,
hydraulic system, and control system. The upper frame will sit atop the lower frame, which will contain the
crawler tracks and drive motor.
The upper frame is created from various metal forms, shapes, beams, supports, and plates. These are referred
to in your submission as mounting plates, cross beams, cover plates, etc. The process involves incrementally
joining the metal forms across multiple operational steps described as fitting, drilling, welding, polishing, and
sanding. After an intermediate weldment is created, it undergoes further machining, which involves boring
rough and fine motor holes, milling support rings, drilling the slewing support, chamfering portions of a
rotary support ring, and tapping threaded holes. The assembly is then shot blasted, painted, and protected
with a rustproofing treatment.
The construction of the lower frame assembly follows a similar process. The operational production steps are
described as orienting, aligning, combining, and welding various supporting pieces to U-beams to create a
pair of left and right beam assemblies. The beam assemblies are then combined with motor mounts, motor
blocks, brackets, reinforcing plates, and supports to create a track beam subassembly. Next, an X-frame,
walking frames, travel frames, structural member frames, and other components are mounted on top of the
track beam subassembly to form a single unified lower frame assembly.
The boom and arm are components of the mechanism that will control the end-attachment of the excavator.
To create the boom assembly, robotic welding stations join various metal shapes and forms, identified in your
submission as ear plates, bow plates, spacer plates, side panels, base plates, supports, etc. Using a similar
process, robotic welding stations are used to create the arm assembly. The arm assembly requires metal forms
referred to as bucket bar ear plates, bucket bars, base plates, wear plates, and more. After the boom and arm
weldments are created, they undergo roughing and finishing operations that involve grinding, machining, and
painting operations. Besides the main structural parts, the deflection head assembly, counterweight, and
bulldozer blade are also manufactured in Indonesia.
The SY50 and SY60 will also incorporate foreign components, parts, and subassemblies that are sourced
from Japan, Korea, and China. For instance, the SY50 will use a Korean swing reducer while the SY60 will
use a Japanese swing reducer. Except for the swing reducer, the sourcing of the remaining foreign
components for both models will be identical.
The final assembly process starts with installing the swing reducer assembly and multiple valve assemblies
into the upper frame. This process is described as positioning the assemblies, securing them in place, and
making the necessary connections. The boom and arm components are also installed across multiple steps
that involve hoisting the components, joining them using fasteners, then installing the deflection head
assembly and its hydraulic cylinder. At the next station, workers install the engine assembly along with its
supporting components, such as the radiator assembly, oil return system, and battery. Once completed, the
counterweight assembly, fuel tank assembly, and cab assembly are incorporated into the upper frame
assembly. Within all of these steps, workers also complete numerous electrical connections, route various
hoses, and install piping as required.
Separately, the lower frame serves as the base where workers install the support wheel assembly, slewing
bearing assembly, travel reducer assembly, rubber tracks, and a bulldozer blade assembly along with its
hydraulic cylinder. When the main components are in place, the upper frame assembly is lifted and combined
with the lower frame assembly. Each excavator is then inspected and tested before various covers, panels,
and decals are affixed to the body.
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every
article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly,
indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to
indicate to the ultimate purchaser in the United States, the English name of the country of origin of the
article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to
know by an inspection of the marking on the imported goods the country of which the goods is the product.
The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by
knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should
influence his will.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940).
Part 134 of the U.S. Customs and Border Protection (CBP) Regulations (19 CFR 134) implements the
country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP
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 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 the marking laws and regulations.
A substantial transformation occurs when, as a result of the manufacturing process, a new and different
article emerges, having a distinct name, character or use, which is different from that originally possessed by
the article or material before being subjected to the manufacturing process. See United States v.
Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940).
Although the final assembly process that occurs in Indonesia requires numerous foreign inputs, significant
manufacturing operations also occur in Indonesia. CBP has held that whether an assembly process is
sufficiently complex to rise to the level of substantial transformation is determined upon consideration of all
the operations that occur within that country, including any subassembly processes that take place in that
country. Based upon your description of the manufacturing operations, the sum of the operational assembly
steps and processing performed in Indonesia results in a substantial transformation. All the major structural
components, including the boom, arm, upper frame, lower frame, and deflector head, are completely
manufactured in Indonesia. These components serve as critical components of the propelling base, the
structural frame, and the mechanical arm of the finished machine. Thus, based on the totality of the
circumstances, the country of origin of the SY50 and SY60 series of crawler hydraulic excavators will be
Indonesia.
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 Paul Huang at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division