The country of origin of vacuum cleaners

N313471 August 18, 2020 MAR-2 OT: RR: NC: N4:410 CATEGORY: Country of Origin Ms. Lauren Wyszomierski White & Case LLP 701 13th Street NW, Suite 600 Washington, DC 20005 RE: The country of origin of vacuum cleaners Dear Ms. Wyszomiersk: In your letter dated July 24, 2020, you requested a country of origin ruling on behalf of your client, Midea American Corporation. The merchandise under consideration is identified as the “vacuum cleaner the NEU10 Series, BDLCE10 Series and HDUE1 Series”, which includes 7 related models. The series models are bagless, electric-powered, “stick” vacuum cleaners designed for household use. The main differences between the three series are the appearance of the foot cover, exhaust grill, big wheels and dust cup cover. The vacuum’s power is 720W and its dust cup capacity is 1.7L. The vacuum cleaners are packaged for sale to individual consumers to be used as upright vacuums. Each unit is sold in a single package together with its corresponding accessories. The models within the series vary slightly because they are sold into different markets with different color schemes, different accessories, or slightly different features. However, all of the models use the same platform, with only one or two parts that might vary between models in the series. You present a processing scenario for the three series models for the country of origin determination. Under the scenario, the products’ materials and components are sourced from China and Vietnam and the final processing occurs in Vietnam. The NEU10 Series, BDLCE10 Series and HDUE1 Series models are made from roughly over 60 components and sub-assemblies. Approximately 49% (by unit cost) of the listed components and sub-assemblies, such as handle and body assemblies, foot hose and base assemblies, foot covers, nozzle assembly, cyclone, dust cup assembly and cover, etc., including the instructional manual and packaging materials, are made in Vietnam. The balance of parts and assemblies, such as the switches, power lines, motor seal cover, foot wheels and foot belt, brush roll assembly, hose assembly, filter, screws, etc., are imported from China. The laborers involved in the production of the vacuum cleaners in Vietnam include electricians, product engineers, test engineers and workers who are specially trained to ensure the product’s quality and specifications. Three key sub-assemblies, i.e., the dust cup sub-assembly, body sub-assembly and foot sub-assembly are made in the Vietnamese factory. The final assembly is conducted in a main assembly line, in which the major sub-assemblies are combined with other components for the production of the finished vacuums. This process consists of approximately 23 distinct and complex steps, generally including (A) assembly/manufacture; (B) testing; and (C) packing. Each step is carried out by a different worker. Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines "country of origin" as 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”. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative. Based on the information submitted, the materials/components (e.g. switches, power lines, motor seal cover, foot wheels and foot belt, brush roll assembly, hose assembly, filter, screws) are imported into Vietnam where they are manufactured into different subassemblies, which are ultimately assembled into the subject NEU10 Series, BDLCE10 Series, and HDUE1 Series vacuum cleaners. We find that the processing performed in Vietnam with respect to the three Series vacuum cleaners in the scenario does constitute a substantial transformation of the imported materials/components into "products of" Vietnam. There are significant components in the vacuum cleaners produced in Vietnam. The manufacturing process in Vietnam transforms the Chinese originating components/materials to produce the finished vacuum cleaners. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into Vietnam. Therefore, the "product of" requirement has been satisfied. It is of the opinion of this office that the country of origin for the vacuum cleaners will be Vietnam. 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 Michael Chen at michael.w.chen@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division