The country of origin of vacuum cleaners

N313699 August 21, 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: This is in response to your letter dated August 3, 2020, on behalf of your client Midea American Corporation, requesting a country of origin determination for vacuum cleaners. The merchandise under consideration is identified as the “vacuum cleaner the NEC38 Series”. The NEC38 Series models are cordless, bagless, battery-powered, “stick” vacuum cleaners designed for household use. The vacuum’s power is 350W and its dust cup capacity is 0.5L. The vacuum cleaners are packaged for sale to individual consumers to be used as an upright vacuum. 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 NEC38 Series vacuum cleaners for the country of origin determination. Under the scenario, the products’ materials and components are sourced from China and Malaysia and the final processing occurs in Malaysia. The NEC38 Series models are made from roughly over 80 components and sub-assemblies. Approximately 36% (by unit cost) of the listed components and sub-assemblies, such as the main body, motor board, dust cup and dust cup assembly, inlet grill, handle assembly, body inlet tube, battery pack, pumps, etc., including the packaging materials, are made in Malaysia. The balance of parts and assemblies, such as the crevice tool, motor and assembly, HEPA filter, wires, foot assembly, dust cup lock and switches, cyclone, handle PCBA board, motor control PCBA board, charger, etc., are imported from China. The laborers involved in the production of the vacuum cleaners in Malaysia include electricians, product engineers, test engineers and workers who are specially trained to ensure the product’s quality and specifications. The manufacture process starts with the initial construction of the dust cup sub-assembly in Malaysia which requires 10 workers going through 5 distinct assembly steps. The final assembly is conducted in the main assembly line, in which the major sub-assemblies are combined with other sub-assemblies and components from both China and Malaysia to make the finished product. This process consists of approximately 25 distinct and complex steps, generally including (A) assembly/manufacture, (B) testing and (C) packing. The main assembly line requires 28 workers and 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. motor and assembly, HEPA filter, wires, foot assembly, dust cup lock and switches, cyclone, handle PCBA board and motor control PCBA board, charger, etc.) are imported into Malaysia where they are manufactured into different sub-assemblies, which are ultimately assembled into the subject NEC38 Series vacuum cleaners. We find that the processing performed in Malaysia with respect to the vacuum cleaners in the scenario does constitute a substantial transformation of the imported materials/components into "products of" Malaysia. The manufacturing process in Malaysia 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 Malaysia. 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 Malaysia. 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