The country of origin of rotor and stator assemblies.

N319473 May 28, 2021 OT:RR:NC:N2:220 CATEGORY: Origin Aaron Marx Crowell & Moring, LLP. 1001 Pennsylvania Ave, NW Washington, DC 20004 RE: The country of origin of rotor and stator assemblies. Dear Mr. Marx: In your letter dated May 15, 2021 you requested a country of origin ruling on behalf of your client, Valeo North America, Inc. The merchandise under consideration is referred to as the Stator Assembly, Part Number 317-1607-01 and Rotor Assembly, Part Number 320-9720-00. The stator and rotor are said to be incorporated in the manufacturing of an automobile air conditioning unit. In your submission, you indicate that the stator assembly manufacturing process begins in Vietnam, where sheet steel is stamped, pressed, and laminated into a stator core. The stator cores are then exported to China where a front/rear plastic covers are added, electrical terminals are soldered, and magnet wire is wound around the stator posts to produce a stator assembly. Prior to export from China, the stator assembly is inspected and packaged. We would note that based on the information provided, the stator core is manufactured in Vietnam, whereas the core covers, terminals, and magnet wire are sourced from China. The manufacturing process of the rotor assembly begins in Vietnam, where sheet steel is stamped and pressed into a rotor yoke. The rotor yoke consists of a metal circle with drilled holes that is connected to an outer metal cylinder by uniform, alternating metal arms and airgaps. The rotor yokes are then exported to China where a shaft, magnets, and a snap ring are joined to produce a rotor assembly. Prior to export from China, the rotor assembly is inspected, cured, tested, cleaned, and packaged. We would note that based on the information provided, the rotor yoke is manufactured in Vietnam, whereas the magnets, rotor shaft, and snap ring are sourced from China. The “country of origin” is defined in 19 CFR 134.1(b) 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.” The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or 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). 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 that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). 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. Regarding the country of origin of the stator assembly, in our opinion, the stator core is the predominant component of the stator assembly. Further, the manufacturing work performed in Vietnam, consisting of stamping, pressing, and laminating individual steel sheets, produces a stator core of Vietnamese origin. However, the additional assembly operations that occur in China, where the plastic covers are attached to the stator core and then wound with wire, are not complex and do not result in a substantial transformation of the Vietnamese stator core. Therefore, based on the facts presented, the Stator Assembly, Part Number 317-1607-01, is considered a product of Vietnam for origin and marking purposes at time of importation into the United States. Regarding the country of origin of the rotor assembly, in our opinion, the rotor yoke is the predominant component of the rotor assembly. Further, the manufacturing work performed in Vietnam, consisting of stamping, pressing, and laminating, produces a rotor yoke of Vietnamese origin. However, the additional assembly operations that occur in China, where the shaft is pressed into the yoke, the magnets are glued, and a snap ring is attached, are not complex and do not result in a substantial transformation of the Vietnamese rotor yoke. Therefore, based on the facts presented, the Rotor Assembly, Part Number 320-9720-00, is considered a product of Vietnam for origin and marking purposes at 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 Karl Moosbrugger at karl.moosbrugger@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division