The country of origin of submersible pumps

N314774 October 23, 2020 MAR-2-84:OT:RR:NC:N1:102 CATEGORY: Marking, Country of Origin Larry Ordet Sandler, Travis & Rosenberg, P.A. 1000 NW 57th Court, Suite 600 Miami, Florida 33126 RE: The country of origin of submersible pumps Dear Mr. Ordet: In your letter dated September 24, 2020, on behalf of your client, Beckett Corporation, you requested a ruling on the country of origin of submersible pumps. A description of the assembly processes was submitted for our review. The merchandise at issue is referred to as the G325A submersible pumps. The submersible pumps are used in water gardens, ponds, and similar applications to circulate water, materials, etc. The G325A pumps primarily consist of an impeller and an electric motor that drives the impeller. The pumps are said to measure 3/4” in height, 4” in width, and 5” in length. In regards to country of origin, you explain that the G325A submersible pumps will be assembled in China from various components, including a motor, which is said to represent more than 50% of the value of the finished pump assembly. The final assembly of each pump assembly begins with a shaft seal from the U.S. being pressed onto the Vietnamese motor using a pneumatic press. Afterwards, gel epoxy is applied into the large voids of the motor and wires from an electrical cord from China are then attached to the motor. Next, the motor is installed into a Chinese plastic housing and a Chinse plastic cover. Wet epoxy is then applied into the plastic housing. Subsequently, the Chinese impeller is pressed onto the shaft of the motor and the volute, which is of Chinese origin, is screwed onto the housing. A screen is then screwed onto the top of the volute. Each completed pump assembly undergoes testing. The “country of origin” is defined in 19 CFR 134.1(b), in pertinent part, 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' within the meaning of this part.” For tariff purposes, the courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).  The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character and 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 National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Further, in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer, the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted, “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. In reaching its decision in Energizer, the court expressed the question as one of whether the imported components retained their names after they were assembled into the finished Generation II flashlights. The court found “the constitutive components of the Generation II flashlight do not lose their individual names as a result [of] the post-importation assembly.” Also, the court did not find the assembly process to be sufficiently complex as to constitute a substantial transformation. Thus, the court found that Energizer’s imported components did not undergo a change in name, character, or use as a result of the post-importation assembly of the components into a finished Generation II flashlight. The court determined that China, the source of all but two components, was the correct country of origin of the finished Generation II flashlights. In the instant case, the electric motor, which is of Vietnamese origin, is shipped to China for assembly with the impeller, the seal, the plastic housing, the volute, and the cover to form the finished pump assembly. The assembly process that occurs in China involves press fitting the components to each other. Headquarters ruling H303864, December 26, 2019, discusses the assembly of a pump assembly and explains that press fitting components to each other is simply assembly. Therefore, it is our view that the electric motor is not subjected to any further operations other than simple assembly and therefore, is not transformed in China into a new and different article of commerce with a name, character, and use distinct from the article exported. Furthermore, we find that the electric motor imparts the very essence of the pump assembly, as it turns the impeller that moves the fluid through the pump. As such, the country of origin of the G325A submersible pumps for origin and marking purposes is Vietnam at the time of importation into the United States. 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 Sandra Martinez at Sandra.Martinez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division