The country of origin, marking and application of Section 301 trade remedy of a bolt cutter

N312564 June 26, 2020 CLA-2-82:OT:RR:NC:N1:118 CATEGORY: Country of Origin Mr. Adams Lee Harris Bricken McVay Sliwoski, LLP 600 Stewart Street Suite 1200 Seattle, Washington 98101 RE: The country of origin, marking and application of Section 301 trade remedy of a bolt cutter Dear Mr. Lee: In your letter dated June 16, 2020, on behalf of your client, Weihai Maxpower Tools Co., Ltd., you requested a ruling on the country of origin, marking and application of Section 301 additional duties for a bolt cutter. The imported article is a bolt cutter that is comprised of several components produced in two countries, South Korea and China. These components include two cutter blades, two blade joints, two tubular steel handles, and two steel handle joint units. A description of the production-processing follows. In South Korea, raw steel rods (sourced primarily from South Korea) are drop-forged to produce the bolt cutter’s two blades and two blade joints. Burrs are then trimmed away. Also in Korea, each of the bolt cutter’s handles are made from steel tubes of Korean origin and then cut to the desired handle length. Steel handle joints also are formed in Korea that are then inserted into each bolt cutter handle tube. The steel tube, with inserted steel handle joint, is then bent to the specified angle designed to provide maximum ergonomic functionality. Next, the forged bolt cutter blades and joints and unassembled bolt cutter handles are shipped to China. In China, the bolt cutter blades and joints undergo machining and grinding to ensure that the blades and joints meet the precise measurements and shape specifications. Holes are punched into the blades so that they can be attached to the joints and to the handles. The blades and joints are heat-treated and the handle units are powder-coated. Each bolt cutter handle tube/ joint unit is then paired up and has a joint unit inserted and riveted together to form an assembled handle unit. The final assembly process first involves the two bolt cutter blades being attached together with the joints (front and back) by two bolts. Subsequently, the blade unit is attached to the handles by bolts that connect through the handles and lower hole in the blades. Handle grips made of PVC are then mounted on to the handle. The finished bolt cutters is then packed and ready for shipment to the United States. With regard to your request for the appropriate country of origin of the bolt cutter, 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 Nat’l 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 regards to the finished bolt cutters, we find that the machining and assembly processes performed in China do not constitute a substantial transformation of the bolt cutter blades, handle joints and handles that were manufactured in South Korean. These articles provide the essential characteristics of the finished bolt cutter, are dedicated for use as such and cannot be used for any other purpose. Additionally, in South Korea, the handle joints are inserted into the handles and each handle is bent to a specified angle in order to provide maximum ergonomic functionality for the finished bolt cutter to operate. Therefore, it is the opinion of this office that the finished bolt cutter described in your proposed production-processing scenario is country of origin South Korea. Additionally, the subject products will not be subject to additional duties under the Section 301 Trade Remedy. You also inquired as to the correct country of origin marking for the imported bolt cutters. As products of South Korea, in accordance 19 U.S.C. 1304, the bolt must be marked to indicate that their country of origin is South Korea. This marking must be conspicuously, legibly and permanently marked in satisfaction of the marking requirements of 19 U.S.C. § 1304 and 19 C.F.R. Part 134. 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