The country of origin of axial fan motor units and the applicability of certain trade remedies under Section 301

N311232 May 4, 2020 MAR-2 OT:RR:NC:N1:102 CATEGORY: Country of Origin Amanda Noel NMB Technologies Corporation 155 Lexington Drive Laconia, New Hampshire 03246 RE: The country of origin of axial fan motor units and the applicability of certain trade remedies under Section 301 Dear Ms. Noel: In your letter dated April 14, 2020, you requested a ruling on certain country of origin scenarios of axial fan motors. A description of each production process was submitted for our review. The products under consideration are referred to as axial fan motors, item numbers 4715MS and 5915PC. The axial fan motors primarily consist of an axial impeller, which circulates air, and a motor that powers the fan. Axial fan motor, item 4715MS, has a fan size that measures 119 millimeters (mm) in length and a fan width of 38 mm, and the motor has an output of 16 watts. Axial Fan motor, item number 5915PC, has a fan size that measures 150 mm in length, a fan width of 38 mm, and a motor output of 44 watts. Item numbers 4715MS and 5915PC are designed to be used in various indoor-use applications. In your letter, the country of origin scenarios are described and in each scenario, item numbers 4715MS and 5915PC are assembled in Cambodia from subassemblies that are formed in Cambodia. The subassemblies are made from components that originate in China, Thailand, Japan, Cambodia or Vietnam. For item number 4715MS, the production process begins with a stator stack from China and insulator from China being bonded to each other to form a stator stack. The stator stack is then subjected to a coil winding process with magnetic wire from China. A metal wedge from China and lead wire from China are then connected to complete the stator stack. Afterwards, a rotor die-casted in either Vietnam or China, which has been subjected to a machining process in China, is welded to a Chinese impeller in Cambodia. This process forms the impeller-rotor assembly. The final assembly of item number 4715MS occurs when a stator casing from Vietnam or China is assembled and welded to the stator stack to form the stator case assembly, which is then welded to the impeller-rotor assembly, which also includes the installation of retaining rings from Thailand, a Chinese terminal block, a Chinese terminal cover, a Chinese shaft, a ball bearing from Cambodia, Thailand or China, and a Chinese coil spring to produce the final product. Grease from Japan is applied throughout the process as required. Each axial fan motor unit undergoes an inspection and is then packaged. For item number 5915PC, the production process in Cambodia begins with magnetic wire from China being subjected to a coil winding process. Afterwards, the coil is inserted to a Chinese insulator and is tied to the insulator using tie band from Thailand or Japan. Lead wire from either China, Thailand or Vietnam is then attached and the coiled stator is then affixed to a stator case from Cambodia to form the stator assembly. Afterwards, a rotor die-casted from either Vietnam or China undergoes a machining process in China, which is then soldered to a Chinese impeller in Cambodia. This process forms the impeller-rotor assembly During the final assembly of item number 5915PC, the impeller-rotor assembly is affixed and welded to the coiled stator case assembly, which also includes the installation of an impeller cap from China, a Chinese shim, a Chinse coil spring, a ball bearing from either Thailand or China, retaining rings from Thailand or China, and a capacitor cover from China. Grease from Japan is applied throughout the process as required. Each axial fan motor unit undergoes an inspection and is then packaged. With regard to your request for the appropriate country of origin of item numbers 4715MS and 5915PC, 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”. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character and 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. In the country of origin scenarios for both item numbers, components from China, Thailand, Japan or Vietnam are combined to form subassemblies, to include the stator assembly and impeller-rotor assembly, in Cambodia. The subassemblies made in Cambodia are then combined during the final assembly in Cambodia. Based on the processes completed in the aforementioned scenarios, the foreign components from China, Thailand, Japan, and Vietnam are substantially transformed in Cambodia because the assembly operations to make the subject units in Cambodia are complex and meaningful.  It is our view that the nature of the processing performed in Cambodia is one in which the foreign components lose their separate identities to become new articles, i.e., axial fan motors that consist of a fan and a motor. As such, the country of origin of item numbers 4715MS and 5915PC resulting from the aforementioned scenarios will be Cambodia. Accordingly, these units are not subject to the Section 301 trade remedy. 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