The country of origin of submersible pumps

N316992 February 12, 2021 CLA-2-84:OT:RR:NC:N1:102 CATEGORY: Origin Larry T. Ordet Sandler, Travis & Rosenberg, P.A. 5835 Blue Lagoon Drive, Suite 200 Miami, Florida 33178 RE: The country of origin of submersible pumps Dear Mr. Ordet: In your letter dated January 15, 2021 you requested a country of origin ruling on behalf of your client, Beckett Corporation. Descriptive information was provided with your request. The products in question are referred to as Beckett’s M130AS submersible pumps. These pumps are used to circulate water or materials in water gardens, ponds, and similar areas. The pumps primarily consist of a motor, a PCB controller, an impeller, a shaft, a housing with a back cover, a screen and a volute. At importation, each pump is 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 M130AS submersible pumps will be produced under two different scenarios. In scenario one, the motor and PCB controller used with the pump will be produced in Vietnam, and then exported to China to be assembled with additional components manufactured in China. The final assembly in scenario one, which occurs in China, begins by pressing a Chinese impeller shaft into the Chinese housing. Wires from a Chinese electrical cord are then attached to the motor and a PCB controller. A Chinese sensor is placed into the housing and connected to a PCB controller. Afterwards both items are installed into the plastic housing. Epoxy is then applied into the plastic housing, a back cover is installed onto the housing, and a magnetic impeller from China is installed into the housing. A Chinese volute cover and a screen are then installed into their respective locations. Each completed pump is tested, labeled, and then packaged with a flow control valve from China. In scenario two, a Vietnamese manufactured motor and PCB controller are assembled to certain pump components in Vietnam. This process begins by pressing an impeller shaft into the housing, connecting the PCB controller to the motor with wires, and inserting and connecting a sensor. Afterwards, the motor and the PCB controller are installed, and a magnetic impeller is installed and connected to the motor and housing. The resulting subassembly is then exported to China. In China, wires from an electrical cord are attached to the motor and PCB controller. Afterwards, wet epoxy is poured into the plastic housing. Next, a plastic back cover, a Chinese volute cover and screen are then installed to the housing. The finished pump is tested, labeled, and then packaged with a flow control valve from China. 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 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 subassembly in scenario two are not subject to any further operations other than simple assembly. The motor in scenario one and the 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 M130AS submersible pumps 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 C.F.R. 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