The tariff classification, country of origin, and marking of a 230 Piece Tool Set

N306370 October 15, 2019 CLA-2-84:OT:RR:NC:N1:104 CATEGORY: Classification TARIFF NO.: 8466.10.0175 M. Jason Cunningham Sonnenberg & Cunningham PA 780 Fifth Avenue South Suite 200 Naples, FL 34102 RE: The tariff classification, country of origin, and marking of a 230 Piece Tool Set Dear Mr. Cunningham: In your letter dated September 23, 2019, you requested a classification, country of origin, and marking ruling on behalf of your client, Great Star Industrial USA, LLC. The 230-Piece Mechanics Tool Set is imported packaged for retail sale in a plastic, blow-molded case specially shaped and fitted on the interior to hold the various tools.  Nothing will be added to the set subsequent to importation.  The contents of the set include: 3 Ratchet Handles 2 Ratchet Extenders 116 Sockets 6 Combination Wrenches 40 Hex Keys 1 Magnetic Drive Handle 12 Nut Driver Bits 50 Driver Bits Total 230 in a plastic blow mold case The applicable subheading for the 230-Piece Mechanics Tool Set will be 8466.10.0175, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories suitable for use solely or principally with the machines of headings 8456 to 8465, including work or tool holders, self-opening dieheads, dividing heads and other special attachments for the machines; tool holders for any type of tool for working in the hand: Tool holders and self-opening dieheads: Other”. The rate of duty will be 3.9 percent ad valorem. Country of Origin You indicate that the magnetic drive handle, 50 driver bits, 12 nut drivers, and 40 hex keys are fully produced in Taiwan. Each of the 116 sockets is molded to final size and shape from raw steel in Taiwan, and then sent to China for final machining, grinding, stamping, heat-treatment, polishing, and plating. The 6 combination wrenches are molded from steel coil in Taiwan, and then sent to China where they are heat-treated, ground, polished, plated, and assembled. The 3 ratchet handles are molded from steel coil into the ratchet handle blank, which is also drilled in Taiwan before being sent to China where it is machined, ground stamped, heat-treated, polished, plated, and assembled with the small Chinese ratchet parts. In summary, the sockets, combination wrenches, and ratchet handles are all molded into forgings with the final size, shape, and form from raw steel in Taiwan then finished and packaged for retail sale in China. With regard to your request for the appropriate country of origin of the 230-Piece Mechanics Tool Set, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means 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 this part; As stated in HQ 735009 dated July 30, 1993, “The country of origin is the country where the article last underwent a “substantial transformation”, that is, processing which results in a change in the article's name, character, or use”. In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.”  However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character and use has been produced. No one factor is decisive. Assembly operations that are minimal will generally not result in a substantial transformation. In this instance, it is this office’s opinion that the sockets, combination wrenches, and ratchet handles manufacturing operations in Taiwan provide the essence of these tools. They are not substantially changed by the addition of the Chinese fabrications or the minor assembly operations performed in China. In view of these facts, the country of origin is Taiwan for the entire 230-Piece Mechanics Tool Set. 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 (or its container) imported into the U.S. 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 U.S. the English name of the country of origin of the article.As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable. The 230-Piece Mechanics Tool Set does not lose its identity as a result of being packaged together in the blow-molded plastic case, the external packaging of the set should be marked in a conspicuous manner to indicate the country of origin. Accordingly, the set should be marked “Made in Taiwan”. 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 https://hts.usitc.gov/current. This ruling is being issued under the provisions of Part 177 of the Customs 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, contact National Import Specialist Denise Hopkins at denise.hopkins@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division