The country of origin of vacuum cleaners

N314159 September 14, 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 August 24, 2020, you requested a country of origin ruling on behalf of your client, Midea American Corporation. The merchandise under consideration is two vacuum cleaner series identified as the “NES51 Series and HDSV19 Series”, which includes two related models. The NES51 Series and HDSV19 Series models are bagless, electric-powered, “stick” vacuum cleaners designed for household use. The only difference between the NES51 Series and HDSV19 Series is color. The vacuum’s power is 480W 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 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 two series 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 NES51 Series and HDSV19 Series models are made from roughly over 40 components and sub-assemblies. Approximately 19% (by unit cost) of the listed components and sub-assemblies, such as the exhaust cover assembly, hand vacuum assembly, handle assembly, rear cover assembly, motor covers, hand vacuum body assembly, body assembly, paper holder, standing base lower, etc., including the instructional manual and packaging materials, are made in Vietnam. The balance of parts and assemblies, such as the furniture tool, crevice tool, foot assembly, dust cup assembly, MI power switch PCBA board, motor assembly, motor base and seal ring, metal tube, power cord and electrical wires, etc., are imported from China. Processes in the proposed production scenario occur at either Midea’s facilities in Vietnam or an outsourced factory location in Vietnam. 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. For each NES51 Series and HDSV19 Series model, the components and sub-assemblies sourced from both China and Vietnam are sent to the main assembly line for production of the vacuums, in which the sub-assemblies are combined with other components for the production of the finished vacuums. This process consists of approximately 20 distinct and complex steps, generally including (A) assembly/manufacture, (B) testing and (C) packing. Each step, which consists of various processing sub-steps, 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., dust cup assembly, MI power switch PCBA board, motor assembly, motor base and seal ring, metal tube, power cord and electrical wires) are imported into Vietnam where they are manufactured into different sub-assemblies, which are ultimately assembled into the subject Vacuums cleaners. We find that the processing performed in Vietnam with respect to the vacuum cleaners in the scenario does constitute a substantial transformation of the imported materials/components into "products of" 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