The country of origin of submersible pumps

N315994 December 18, 2020 CLA-2-84:OT:RR:NC:N1:102 CATEGORY: Country of Origin Larry T. Ordet Sandler, Travis & Rosenberg, P.A. 5835 Blue Lagoon Drive, Suite 200 Miami, Florida 33126 RE: The country of origin of submersible pumps Dear Mr. Ordet: In your letter dated November 19, 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 M130 submersible pumps. The submersible M130 pumps are pump assemblies that primarily consist of a motor, impeller, housing, back cover, and volute. The M130 pumps are used in water gardens, ponds, and similar areas to circulate water, materials, etc. It is stated that each pump is imported packaged with a flow control valve that is detached from the pump for the convenience of packaging and transporting. In regards to country of origin, you explain that the M130 submersible pumps will be produced under two different scenarios. In the first scenario, it is stated that the motor will be produced in Vietnam, and in the second scenario, a subassembly, which in your letter is referred to as a motor subassembly, will be produced in Vietnam before shipment to China for assembly with other Chinese components. In scenario one, the production process in China will be as follows: the impeller shaft will be pressed into the housing, three wires from an electrical cord will be attached to the motor, the motor will be placed into the plastic housing, after which wet epoxy will be poured into the plastic housing, the plastic back cover will be placed on the housing, the magnet impeller will be placed into the housing, the volute cover will be placed on the housing, and the screen will be placed on the housing. The finished pump will be tested, labels applied, and then packaged with a Chinese flow control valve. In scenario two, in Vietnam, the production process will be as follows: the impeller shaft will be pressed into the housing, the Vietnamese motor will be placed into the plastic housing, the magnet impeller will be placed into the housing, and this subassembly is packaged and shipped to China. In China, three wires from an electrical cord will be attached to the motor, wet epoxy will be poured into the plastic housing, the plastic back cover will be placed on the housing, the volute cover will be placed on the housing, and the screen will be placed on the housing. The finished pump will be tested, labels applied, and then packaged with a Chinese flow control valve. 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 considering the facts presented, we believe that neither the Vietnamese motor in the first scenario, nor the motor subassembly of the second scenario, are “substantially transformed” by the Chinese assembly operations. The assembly processes that occur in China involve processes, such as connecting and press fitting components to each other. Headquarters ruling H303864, December 26, 2019, discusses the assembly of a pump assembly and explains that processes, such as press fitting components to each other is simple assembly. Therefore, it is our view that the motor in scenario one, which imparts the very essence of the finished pump, and the motor subassembly in scenario two are not subject to any further operations other than simple assembly. The motor in scenario one and the motor subassembly in scenario two are not transformed in China into a new and different article of commerce with a name, character, and use distinct from the article exported. As such, the country of origin of the subject M130 submersible pumps for origin purposes in both scenarios is Vietnam at the time of importation into the United States provided that the motor is, indeed, a product of Vietnam. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177). The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request.  This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1).  This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect.  In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2.  You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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