The country of origin of a steel pipe wrench

N313172 August 3, 2020 CLA-2-82:OT:RR:NC:N1:118 CATEGORY: Country of Origin Mr. Andrew Bisbas Lowenstein Sandler LLP 2200 Pennsylvania Ave. NW Washington, DC 20037 RE: The country of origin of a steel pipe wrench Dear Mr. Bisbas: In your letter dated July 13, 2020, you requested a country of origin ruling on behalf of your client, Tractor Supply Company. The imported article is a steel pipe wrench that is produced in two countries, South Korea and China. The production process begins in South Korea, where the wrench’s handle is cast from Korean-origin raw steel into its approximate size and shape. Also in Korea, the adjustable jaw is forged from Korean-origin steel bar into its approximate size and shape. The handle and adjustable jaw are then shipped to China for further processing. Threads and teeth are milled into the adjustable jaw, and it is heat-treated. A connection joint is milled into the handle and a hole is drilled into the bottom edge. The handle is also powder-coated. The wrench’s fixed jaw is produced wholly in China from cold-rolled steel bar. Teeth are milled onto one side of the jaw, and it is heat-treated. An adjusting nut is also manufactured in China. The handle, adjustable jaw, fixed jaw and adjusting nut are then assembled together with a Chinese-origin pin and spring. Finally, the finished steel pipe wrench is packaged and shipped to the United States. With regard to your request for the appropriate country of origin of the steel pipe wrench, 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 steel pipe wrench, there is no dispute that the handle and adjustable jaw, which are produced in South Korea, are dedicated for a use in the specifically designed pipe wrench. In other words, they have a pre-determined use at the time they are exported from South Korea to China. However, while this is a consideration, as noted by the court in National Hand Tool, this does not preclude a finding of substantial transformation. Unlike the tools in National Hand Tool that were in the final form at the time they left Taiwan and were clearly recognizable by name, although not finished; the handle and adjustable jaw that leave South Korea are not clearly recognizable as parts of a pipe wrench. As the court stated in National Hand Tool, we must look at the totality of the evidence. We also must consider the product at issue, how it functions, and the purpose of the components within it carrying out its function. A pipe wrench has two serrated jaws that are tightened by an adjusting nut, and dig into the pipe for grip. The top serrated jaw adjusts up and down to fit different size pipes. Therefore, the fixed jaw and adjusting nut are equally important for the pipe wrench to operate. When we consider that the roughly formed handle and adjustable jaw are shipped to China, prepared for assembly, and assembled with the fixed jaw and adjusting nut, the totality of the evidence leads us to conclude that the country of origin of the steel pipe wrench is China. 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