The country of origin of a tapered roller bearing cup and cone assembly

N328940 November 21, 2022 MAR-2:OT:RR:NC:N2:206 CATEGORY: Country of Origin James Allan Consolidated Metco 5701 SE Columbia Way Vancouver, WA 98661 RE: The country of origin of a tapered roller bearing cup and cone assembly Dear Mr. Allan: This is in response to your letter, October 12, 2022, requesting a ruling on the country of origin of a tapered roller bearing (TRB) cup and cone assembly for marking purposes and for purposes of applying trade remedies under Section 301 of the Trade Act of 1974, as amended, from China. The item under consideration is a TRB cup and cone assembly (Part Number 219951), which will be used as an input component to make different types of wheel hub assemblies. The wheel hub assemblies will be custom configured based on one of many available combinations of added components, such as wheel studs, axles studs, ABS rings, brake drums or brake rotors, spindle nut and other hardware components, depending on the operational requirements dictated by your customer. Regardless of the customization added after the TRB assembly is imported, the ultimate end use will be to mount the further customized wheel hub assembly onto a spindle at the end of a motor vehicle, trailer or custom lift (pusher or tag) axle. That is the TRBs in part in the assembly will fit firmly against an axle spindle, remaining inside the casting and the TRBs will serve the purpose of reducing friction as a vehicle axle spins. The TRB’s in the assembly are not splined and as such do not convert torque. You request a ruling on two (2) different scenarios in both of which the TRB cup and cone with the cage and rollers are manufactured in India and the ductile iron casting is made in China. In Scenario 1, the TRB components are assembled into a TRB in India, followed by the assembly of the TRB into the interior of a Chinese origin ductile iron casting. In Scenario 2, the Indian origin TRB components are exported in bulk to China and are assembled into a TRB in China, and then assembled into a Chinese origin ductile iron casting in 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 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).However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (Uniroyal). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In Uniroyal case, the court held that an upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe". 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.” 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. You describe the assembly process as follows: The two cups are hydraulically press fit into the interior of the casting and the cones are hand placed into the interior surface of the hydraulically pressed cups inside the iron cast housing. These bearing cups are usually between 90 mm and 200 mm in overall diameter. The skill level of employees operating the equipment used to press fit the cups into the iron casting is relatively a low skill because the machine used to press fit the TRB cups into the interior of the iron casting is calibrated so the TRB cups are installed correctly. The operator merely places the TRB cups into a predetermined location jig in the equipment, inserts the iron casting into the machine, presses a button and the TRB cups are press fit precisely into the interior of the iron casting. It takes about 20 seconds to complete this task per product. The bearing cones are then hand installed into the interior of the bearing cup and the TRB cup and cone assembly is complete. You state that the assembly process is a minor one and does not result in substantial transformation. We agree. As a result, we need to determine the essence of the TRB. In our opinion the role of the anti-friction components of the TRB is essential to the operation of the product. The Chinese iron casting only houses the Indian anti-friction components. As a result, it is the opinion of this office that the essence of the TRB is the cup and the cone with rolling elements. Therefore, the country of origin of the entire product will be the country of origin of the cup and the cone. Subsequently, the country of origin of the TRB cup and cone assembly will be India for marking purposes, and for purposes of applying trade remedies under Section 301, of the Trade Act of 1974, as amended. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” 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, please contact National Import Specialist Liana Alvarez at liana.alvarez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division