The country of origin of a multi-bit driver, 6-in-1 driver and an 11-in-1 driver

N311023 April 24, 2020 CLA-2-82:OT:RR:NC:N1:118 CATEGORY: Country of Origin Mr. M. Jason Cunningham Sonnenberg & Cunningham PA 780 Fifth Ave. South Suite 200 Naples FL 34102 RE: The country of origin of a multi-bit driver, 6-in-1 driver and an 11-in-1 driver Dear Mr. Cunningham: In your letter dated April 1, 2020, on behalf of your client, Great Star Tools, you requested a ruling on the country of origin of certain tools produced in Vietnam and China. The three subject hand tools are identify as a multi-bit driver, 6-in-1 driver, and an 11-in-1 driver. All three tools share similar purpose and function to allow a user to apply torqueing force to a screw in order to tighten or loosen the screw. The multi-bit driver consists of a plastic, rubber, or similar handle that is permanently connected to a bit driver shaft. The shaft is permanently embedded into the handle on one end. The other end has a small hexagonally shaped hole into which various driver bits may be inserted and changed. The subject multi-bit driver will be imported in a single retail package together with multiple bits – usually Phillips head, slot head, and Torx head. In some instances, the driver handle will be hollow with a plastic cap that the user can unscrew to retrieve and store the bits. In other instances, the bits will be stored in a separate bit holder. The 6-in-1 driver consists of four primary parts: the handle, a removable and reversible shaft, and two differently sized, removable and reversible bits. It will be imported fully assembled. The 11-in-1 driver consists of eight primary parts: the handle, a removable and reversible long shaft, two reversible short shafts, and four removable, reversible bits. It will be imported fully assembled. The production scenario you propose for the multi-bit driver begins in Vietnam. Raw steel coil (currently from Vietnam but subject to global procurement) with a round diameter is cut to length, machined chamfered and grooved into a hexagonal bit blank. Then, one end of each bit blank is further machined into a particular type of driver tip, e.g. Phillips, slot, or Torx. Finally, each fully formed bit is heat-treated, stamped, and sand blasted into its final form before they are shipped to China. In China, a Chinese origin handle is joined to a Chinese origin steel shaft. The shaft’s end has a hexagonally shaped end, which fits the Vietnamese bits. They are combined in retail packaging for export to the United States. The production scenario for the 6-in-1 driver begins in Vietnam, where raw steel coil (currently from Vietnam but subject to global procurement) is die cut to length of two different double-tipped bits. The first is machined to final size and shape with a 3/16” slot tip on one end and a #1 Phillips head on the other end. In the middle between the tips, it is machined into a hexagonal shape that is the same size as a ¼” nut. The second is machined to final shape and size with a 9/32” slot at one end, a #2 Phillips tip at the other end, and a hexagonal shaped middle that is the same size as a 5/16” nut. A hole is drilled into the center of each bit, and then they are head-treated and sandblasted. A steel ball is inserted into the hole of each. They are stamped, and then sent in their final form to China. In China, the handle is injection molded and a steel shaft holder and shaft are made from raw steel. The shaft holder is permanently attached to the handle. The shaft is machined so that one end can receive the ¼” Vietnamese bit and the other end can receive the 5/16” Vietnamese bit. The parts are assembled and retail packaged for export to the United States. The production process for the 11-in-1 driver starts in Vietnam, where globally sourced raw steel is cold forged and cut to the length of the long driver shaft. A hole is drilled and wings are punched in the center of it. It is machined on both ends. One end of the shaft is machined to the size of a 5/16” nut; the other is machined to the size of a 3/8” nut. It is polished and finished to final form, and a steel ball is inserted into the hole. Separately in Vietnam, raw steel is cut to length and cold forged to the size and shape of the two shorter shafts. Holes are drilled in the middle of each, and steel balls are inserted into each. All four ends are machined to the size of a 1/4” nut before final polishing into final form. Also in Vietnam, a different stock of globally sourced raw steel coil is used to create four double sided bits in the same manner and process as described above in the 6-in-1 bit production scenario above. The long shaft, two short shafts, and four double tipped bits are then sent to China where they are assembled with a Chinese-made handle. The handle has a steel reinforcement collar at the base that can be made of injection-molded plastic, acetate, or similar material. The reinforcement collar is sized and shaped to receive the Vietnamese shaft. The components are then assembled, retail packaged, then exported to the United States. Regarding your request for the appropriate country of origin for the finished multi-bit driver, 6-in-1 driver and 11-in-1 driver, 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; The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). 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, and assembly operations that are minimal will generally not result in a substantial transformation. With regard to the multi-bit driver and 6-in-1 driver, it is the opinion of this office that the country of origin of these products, described in your proposed production-processing scenarios, is China. The bits produced in Vietnam may be recognizable as individual components of the finished multi-bit driver and 6-in-1 driver. However, when imported into China, they lack the character or use of finished, complete articles. They also do not include other important components of the tool (such as the shaft), and are not ready for assembly. While the operations performed in China involve simple assembly of the finished article’s components, such operations include the manufacturing and assembly of other important components (the shafts and handles), which, taken together, transform the bits into an article with a new character and use. Unlike the hand tool components at issue in Nat’l Hand Tool, which were all drop forged into their final shape in Taiwan before importation into the U.S., here only the bits are manufactured in Vietnam, and the manufacturing of all other components and their assembly occurs in China. Therefore, the country of origin of the multi-bit driver and 6-in-1 driver is China. In regards to the 11-in-1 driver, it is our opinion that the manufacturing and assembly operations that occur in Vietnam transform the raw steel materials into integral components that impart the essence to the finished article, and that the subsequent production operations and assembly in China do not constitute a substantial transformation of goods. Only the 11-in-1 driver’s handle is made in China. The assembly operations in China are neither complex nor do they result in a change in the character or use of the three shafts and four double-tipped bits produced in Vietnam. Belcrest Linens v. United States, 741 F.2d 1368, 1373 (Fed. Cir. 1984). The totality of the evidence, including the fact that the incorporated bits, long shaft, two short shafts, and four double-tipped bits are of Vietnamese origin, supports the conclusion that Vietnam is the country where a substantial transformation occurred. Therefore, it is the opinion of this office that the county of origin of the 11-in-1 driver is Vietnam. 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 Anthony E. Grossi at anthony.e.grossi@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division