The country of origin of centrifugal compressor systems

N306878 November 20, 2019 MAR-2 OT:RR:NC:N1:102 CATEGORY: Country of Origin Mr. David Porter Ingersoll Rand 800-E Beaty Street Davidson, NC 28036 RE: The country of origin of centrifugal compressor systems Dear Mr. Porter: In your letter dated October 15, 2019, you requested a ruling on the country of origin on centrifugal compressor systems. A detailed description of the manufacturing and assembly processes was submitted for our review. The products under consideration are referred to as MSG Turbo-Air centrifugal compressor systems. The systems pull in atmospheric air or previously compressed air and compress the air in multiple stages to achieve a specific pressure, flow rate and temperature using a centrifugal compression process. The systems are electrically powered, but may be powered using a steam or gas turbine. The flow of the compressor systems range from 14 to 430 m3/min and the horsepower capacity of the compressors exceeds 3355 kilowatts. The applications of the compressor systems are air applications, such as power industry and air from plants. The compressor systems are also used in gas compressor applications, such as with fuel gas boosting, carbon monoxide, hydrocarbon refrigeration gas and landfill gas. Due to the size of the systems, the individual components will be imported unassembled in a single shipment, and after being imported into the United States, the components are assembled to each other to form a complete multi-stage centrifugal compressor system. The production of each compressor system begins by manufacturing a structural steel base and certain piping in Italy. The process continues in Italy by bolting the main drive motor, which is of either of Italian or U.S. origin, to the structural base. The motor is then mechanically coupled to a bull gear that is coupled to pinion gears, which have been fitted onto the impellers of the compressor air end assembly that is also mounted to the steel base. The air end assembly, which is of Chinese origin, primarily consists of impellers, diffusers, inlets, bearings, castings and gearing. The production process in Italy goes on by positioning the gas coolers, which are of either of Italian or U.S. origin, to the structural base and the air ends. The gas coolers complete a heat exchange process that removes heat energy from the gas stream, allowing the gas stream to be further compressed. The air end assembly and gas coolers are connected to each other using pipes. The production process in Italy continues by manufacturing the coolant manifold, which manages the coolant flow to the gas coolers, the oil cooler of the lubricating oil system and in some instances, the main drive motor. Depending on the compressor package design, the coolant manifold is connected to the gas cooler using pipes. The lubricating oil system, which is also manufactured in Italy, is connected to the air end assembly. It is noted that the lubricating oil system may be mounted to the structural base or due to the size of the compressor system may stand on a separate structure that is placed alongside the gas coolers. Afterwards, the electrical terminal box or control panel, the wiring and wiring support are mounted and connected to the system. The components of each compressor system are then unassembled, painted and packaged ready for shipment. 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. With regard to your request for the appropriate country of origin of the unassembled multi-stage centrifugal compressor systems, 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, and use”. In addition, CBP 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 the scenario described above, various structural components of the multi-stage centrifugal compressor systems, to include the structural base, certain piping, the cooling manifold and the lubricating oil system are manufactured in Italy. The assembly process consists of foreign components being joined to each other and to the Italian manufactured components. Based on the description of the manufacturing and assembly operations, the nature of the processing performed in Italy is complex and results in individual components losing their separate identities to become a new article, e.g. multi-stage centrifugal compressor systems. Thus, the country of origin of the unassembled MSG Turbo-Air centrifugal compressor systems will be Italy. 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 Sandra Martinez at Sandra.Martinez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division