CBP Ruling H256798

HQ H256798 January 22, 2015 CLA-2 OT:RR:CTF:TCM H256798 PTM CATEGORY: Marking Edward O. Patton, Esq. Mansour Gavin LPA North Point Tower 1001 Lakeside Ave, Suite 1400 Cleveland, OH 44144 Dear Mr. Patton, We are writing in response to your request dated July 28, 2014, that you filed on behalf of your client, Swagelok Company (“Swagelok”), for a binding ruling on the country of origin marking requirements for imported manifold valve bodies. Our response follows. FACTS: You state that Swagelok is a manufacturer of fluid system components that manufactures specialty valves, fittings and the hand tools required for their installation. Swagelok intends to import manifold valve bodies from China. The manifold valve body would undergo processing and assembly in the United States to become a V-Series Manifold Valve. Swagelok constructs 2, 3 and 5 valve manifolds. You state that the 2-valve manifolds are designed for block and bleed of static pressure gauges or transmitters and liquid level applications. The 3 and 5 valve manifolds are designed for differential pressure applications. The fluid flow through a Swagelok manifold is controlled by a series of stainless steel needle valves. The valves each have specific functions, such as blocking pressure, depending on its location in the manifold. You state that assembly of the 2-valve model requires 21 components, the 3-valve manifold requires 28 components and the 5 valve requires 49 components. The component parts are assembled into V-Series manifold valves by Swagelok associates in the United States, who also perform flow, shell leakage and seat leakage testing on each completed V-Series manifold valves. You state that the manifold valve bodies do not have any independent function prior to their assembly into completed V-Series manifold valves. It is your position that the manifold valve bodies will be substantially transformed in the United States by Swagelok, and therefore exempt from individual country of origin marking requirements. ISSUE: Whether the imported manifold valve bodies are substantially transformed by a manufacture in the United States, excepting them from the requirement of individual country of origin marking. LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304(a)), 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 an ultimate purchaser in the United States, the English name of the country of origin of the article. Part 134 of the CBP Regulations (19 CFR Part 134), implements the requirements and exceptions of 19 U.S.C. 1304. Pursuant to 19 C.F.R. § 134.35(a), there is an exception to the country of origin marking requirements for imported articles used for a manufacture by the ultimate purchaser in the United States. That regulation states, in pertinent part: § 134.35 Articles substantially changed by manufacture. (a) Articles other than goods of a NAFTA country. An article used in the United States in manufacture which results in an article having a name, character, or use differing from that of the imported article, will be within the principle of the decision in the case of United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98). Under this principle, the manufacturer or processor in the United States who converts or combines the imported article into the different article will be considered the "ultimate purchaser" of the imported article within the contemplation of section 304(a), Tariff Act of 1930, as amended (19 U.S.C. 1304(a)), and the article shall be excepted from marking. The outermost containers of the imported articles shall be marked in accord with this part. Consequently, provided that the imported manifold valve bodies are manufactured by Swagelok into an article having a different name, character or use than the imported articles, the exception to the marking requirement will apply. Here, the imported manifold valve bodies are integrated with various component parts, and assembled into several different types of V-Series manifold valves. The name of the article changes from “manifold valve body” to “V-Series Manifold Valve” after assembly. Furthermore, the individual manifold valve bodies have no independent function outside of their application in the completed manifold valves. Once the valves are assembled into completed V-Series manifold valves, they are suitable for use in fluid applications. Thus, the use of the articles have changed during the manufacture. Because the imported manifold valve bodies undergo a change in name and use, we find that a substantial transformation has occurred during their manufacture into V-series manifold valves. This finding is consistent with prior CBP rulings that have found the assembly of valve components into finished valves resulted in a substantial transformation, and therefore exempted the components from marking requirements. In Headquarters Ruling Letter (“HQ”) 731828 (Jan. 30, 1990), we found that imported valve bodies, valve adapters and fasteners that were assembled into ball valves and automatic atmospheric vacuum breaker valves were substantially transformed by the manufacture process in the United States. Therefore, the importer of the valve components was found to be the ultimate purchaser of those components, and the components were excepted from individual country of origin marking. See also, HQ H562038 (Feb. 22, 2002) and HQ 558008 (Nov. 16, 1994). Furthermore, in New York Ruling Letter (“NY”) NY N187775 (Oct. 28, 2011), CBP found that imported valve parts for use in the manufacture of trunnion ball valves were substantially transformed when incorporated with other components to produce finished valves. See also, NY G87260 (Mar. 13, 2001), and NY J81294 (Mar. 21, 2003). Accordingly, only the outermost containers of the imported valve parts required country of origin marking. HOLDING: The imported manifold valve bodies are substantially transformed during their manufacture into V-Series manifold valves. Pursuant to 19 C.F.R. §134.35(a), Swagelok is the ultimate purchaser of the imported articles within the contemplation of 19 U.S.C. §1304(a), and the individual valves are excepted from marking. The outermost containers of the imported articles must be marked appropriately. Sincerely, Ieva K. O’Rourke, Chief Tariff Classification and Marking Branch