Country of origin of fireplace mantel with built-in electric fireplace; Substantial Transformation

U.S. Customs and Border Protection HQ H305599 October 21, 2020 CLA-2 OT:RR:CTF:EMAIN: H305599 PF CATEGORY: Origin Kevin Williams Clark Hill PLC 130 E. Randolph Street, Suite 3900 Chicago, IL 60601 RE: Country of origin of fireplace mantel with built-in electric fireplace; Substantial Transformation Dear Mr. Williams: This is in response to your letter requesting a prospective ruling on behalf of Twin Star Home regarding the country of origin of free-standing fireplace mantels with a built-in electric fireplace. Your request was forwarded to this office by the National Commodity Specialist Division for review. In reaching our decision, we have taken into consideration supplemental information received on February 1, 2019 and on July 8, 2020. FACTS: According to your submission, Twin Star Home manufactures free-standing fireplace mantels with built-in electric fireplaces (“fireplace mantel”) that are used as television stands and to heat the interior of a home. There are five models of the fireplace mantels under consideration and they are comprised of two main components: wooden mantel and the fireplace insert. The fireplace insert is produced in China and the wooden mantel is produced in Vietnam. In Vietnam, the manufacture of the wooden mantel includes combining pieces of wood veneer or paper laminate for lamination on medium density fiber or particle boards, cutting and shaping the boards to the appropriate size of the panels, machining, sanding, painting and drilling screw holes and adding of hardware. The mantel is also sanded and painted. When the mantel is completed, the panels of the mantel are screwed onto the sides of the fireplace insert, which creates the finished product. The fireplace insert is designed for incorporation into the wooden mantel to form the finished product. The final assembly of the components occurs in Vietnam and the final product, a wooden mantel with fireplace insert, is imported into the United States. Item 1, 181RM9984-C325, is a wooden mantel with an electric fireplace insert that measures approximately 25” wide, 10” deep, and 24” high. The mantel has a caramel birch veneer finish, arched panel design over the fireplace with fluted pilaster columns. This item has an 18” electric fireplace insert, electricity produces 5,200 British Terminal Unit (“BTU”) of zone heating for 1000 square feet, a subassembly for brightness control, an adjustable heat thermostat assembly, a tempered glass front-display, which includes a traditional log set and ember bed, and a wireless remote control. The mantel also produces a flame effect, which can be operated with or without heat. Item 2, 23MM90141-PC78, is wooden mantel with an electric fireplace insert that measures approximately 47.5” wide, 17.5” deep, and 35” high. The mantel has a brown finish with antique nickel hardware, has side cabinets, including one adjustable shelf and a framed glass door. The mantel also has a full-length portioned shelf, which is marked as ideal for sounds bars and AV components. This item has a 23” electric fireplace insert, electricity produces 5,200 BTU of zone heating for 1000 square feet, fire prevention technology subassembly to monitor and minimize electrical fires and circuit damage, a subassembly for brightness control, an adjustable heat thermostat subassembly, a tempered glass-front display, which includes a traditional log set and ember bed, and a wireless remote control. The mantel also produces a flame effect, which can be operated with or without heat. Item 3, 42MM7330-M354, is a wooden mantel with an electric fireplace insert that measures approximately 78” wide, 19” deep, and 32” high. The mantel has a mahogany finish with dark pewter hardware, decorative plank top, crown molding, and a plinth base. In addition, the mantel has two drawers and two glass-front side cabinets and one adjustable shelf. The item has a 42” 3D infrared quartz electric fireplace, electricity produces 5,200 BTU of zone heating for 1000 square feet, fire prevention technology subassembly to monitor and minimize electrical fires and circuit damage, an adjustable heat thermostat subassembly, a tempered glass front-display, which includes a contemporary tray with large glass rocks and a traditional log set and ember bed, and a wireless remote control. The mantel also produces a flame effect, which can be operated with or without heat. Item 4, 25MM3537-M350, is a wooden mantel with an electric fireplace insert that measures approximately 62” wide, 16.25” deep, and 43” high. The mantel has a harbor gray veneer finish with antique black hardware, crown molding, a plinth base, and tempered glass cabinet doors with decorative mullions. The mantel also has an oopen center media shelf and two side cabinets with an adjustable shelf. The item has a 23” 3D electric fireplace insert, electricity produces 5,200 BTU of zone heating for 1000 square heat, a Safer Plug-fire prevention technology subassembly to monitor and minimize electrical fires and circuit damage, a subassembly for brightness control, an adjustable heat thermostat subassembly, curved tempered glass-front display with a traditional log set and ember bed, and a wireless remote control. The mantel also produces a flame effect, which can be operated with or without heat. Item 5, 26MM6444-F984, is a wooden mantel with an electric fireplace insert that measures approximately 75.5” wide, 19.5” deep, and 35” high. The mantel has a silver glam finish, mirror panels, and faux jewel knobs, crown molding, and spade feet. The mantel also has two side cabinets with adjustable shelves and quarter paneled cabinet doors. The mantel also has a tempered glass display which includes a contemporary tray with large glass rocks. The item also has a 42” 3D infrared quartz electric fireplace, electricity produces 5,200 BTU of zone heating for 1000 square feet, a Safer Plug-fire prevention technology subassembly to monitor and minimize electrical fires and circuit damage, a subassembly for brightness control, an adjustable heat thermostat subassembly, and a wireless remote control. The mantel also produces a flame effect, which can be operated with or without heat. An image of the fireplace mantel at issue is reproduced below:
ISSUE: What is the country of origin for the fireplace mantels? LAW AND ANALYSIS: The marking statute, section 304, 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 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. By enacting 19 U.S.C. § 1304, Congress intended to ensure “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.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302, C.A.D. 104 (1940). The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134). Section 134.1(b), Customs Regulations (19 C.F.R. § 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 is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. United States v. GibsonThomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments, Inc. v. United States, 681 F.2d 778, 782 (1982). In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 C.I.T. 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or combining process is a minor one that leaves the identity of the imported article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, or use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process may be considered when determining whether a substantial transformation has occurred. No one factor is determinative. Assembly operations that are minimal will generally not result in a substantial transformation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. In the present case, the fireplace inserts are imported into Vietnam where they will be assembled into a fireplace mantel. However, the fireplace inserts which constitute the essence of the fireplace mantels, are manufactured in China. The fireplace inserts do not lose their identity and become an integral part of the fireplace mantels when they are combined with other components during assembly in Vietnam. The end use of the fireplace inserts was pre-determined before the components were imported into Vietnam and the fireplace inserts remained fireplace inserts during processing in Vietnam. Based on the information provided, the manufacturing process performed in Vietnam is mere simple assembly. Therefore, we find that the fireplace inserts are not substantially transformed by the manufacturing processing in Vietnam, and thus, the county of origin of the fireplace mantels is China. Additionally, pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9403.60.80, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 9403.60.80, HTSUS. HOLDING: The imported fireplace inserts are not substantially transformed as a result of the processing and assembly operations performed in Vietnam. As a result, we find that the country of origin for the fireplace mantels at issue is China. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, Gregory Connor, Branch Chief Electronics, Machinery, Automotive, and International Nomenclature Branch