The Country of Origin and Section 301 Trade Remedy Application of the Vacuum Cleaners

N305911 September 13, 2019 CLA-2 OT: RR: NC: N4:410 CATEGORY: Country of Origin Ms. Allison Kepkay White & Case LLP 701 13th Street NW Washington, DC 20005 RE: The Country of Origin and Section 301 Trade Remedy Application of the Vacuum Cleaners Dear Ms. Kepkay: In your letter dated August 21, 2019, on behalf of your client Midea U.S.A., Inc., you requested a country of origin determination for purposes of Section 301 duties for the BDAS* Series vacuum cleaners. The subject merchandise is vacuum cleaners, which includes eight related models subject to this ruling request: the BDAS*Series. This model series includes upright, electric-powered vacuum cleaners designed for household use. The vacuums are rated 840W with the dust cup capacity of 2L. The vacuum cleaners are packaged for sale to individual consumers. Each unit is sold in a single package together with its corresponding accessories. Some minor assembly is required by the consumer. The models within the series vary slightly because they are sold into different markets with different color schemes, accessories, or features. However, the models all use the same platform, with only one or two parts that might vary between models. The applicable subheading for the BDAS* Series vacuum cleaners will be 8508.11.0000, which provides for “Vacuum cleaners; parts thereof: With self-contained electric motor: Of a power not exceeding 1,500 W and having a dust bag or other receptacle capacity not exceeding 20 l.” The rate of duty will be Free. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov/tata/hts/. Two processing scenarios for the entire BDAS* Series are presented for the country of origin determination. Under each scenario, roughly 42 components and sub-assemblies used in the BDAS* Series unit's materials and components are sourced from China and Vietnam, and the final processing occurs in Vietnam. The scenarios differ only with respect to the location of the production of one sub-assembly and most of its components. Production of key components includes the body (back pipe) sub-assembly, the dust cup sub-assembly and the foot sub-assembly (production scenario 1 only). Each production process requires 7 to 12 different steps. Three other sub-assemblies, the motor front cover sub-assembly, the handle sub-assembly and the air outlet grid sub-assembly are also assembled in the factory(ies) in Vietnam. The assemblies and subassemblies along with other components and parts are then sent to the main assembly line for the final assembly. The vacuum cleaner's final assembly includes13 distinct steps to assemble the subassemblies and components and a series of successive quality control tests in addition to the packaging and packing. The steps are thread wires and install power switch; affix power switch; make motor pre-assembly and cap; position motor; lock front and rear motor covers; test pressure; assemble exhaust grill assembly; make clip fixation operation and bracket; conduct hose vacuum test and nozzle vacuum test; perform dust cup inspection and whole unit inspection. 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.” Based on the information submitted, the materials/components and subassemblies (motor, power cord, switch, wire connector, foot assembly or brushrollers, hose assembly, etc.,) are imported into Vietnam from China where they are manufactured into different subassemblies, which are ultimately assembled into the subject BDAS* Series vacuums. It is of the opinion of this office that the processing performed in Vietnam constitutes a substantial transformation of the imported materials/components into "products of" Vietnam. The manufacturing process in Vietnam transforms the Chinese-originating components/materials to produce the finished product. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into Vietnam. Therefore, the "product of" requirement has been satisfied. For tariff purposes, we conclude that the country of origin for the BDAS* Series vacuums will be Vietnam. As the country of origin for the BDAS* Series vacuum cleaners will be Vietnam, not China, the Section 301 measures will not apply. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Michael Chen at michael.w.chen@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division