The country of origin of a starter

N329943 January 18, 2023 OT:RR:NC:N2: 201 CATEGORY: Origin Matthew Bock Bock Trade Law 53 State Street, Suite 500Boston 02109 RE: The country of origin of a starter Dear Mr. Bock: In your letter dated December 20, 2022, you requested a country of origin ruling determination on a starter used in various internal combustion and diesel engines on behalf of your client, Wetherill Associates, Inc., (WAI) of Miramar, Florida.  In your request, you state that the Starter is assembled in China from a non-Chinese field case and various other Chinese components.  You state that these starters are used in automotive, commercial vehicle, agricultural, industrial, powersports, and marine applications.  You state that the Starters are designed for use as direct-current electric motors in vehicles, where they convert electric energy to mechanical energy, to provide cranking power to the combustion engine and initiate regular operation. Starters engage with the engine fly wheel thru the clutched gear joints to provide cranking power of 300-400 engine revolutions per minute (rpm). To minimize starter size, modern starters use mechanical transmissions (gear reduction), which converts high motor rpms to the high torque required to crank the engine. Wound field coils and permanent magnets are used to support the consistent magnetic field required to rotate a motor’s armature. You state that Starters are composed of the following parts: starter drive, solenoid, needle bearing – D.E., D.E. housing, C.E. frame, shift lever, field case assembly, armature, bushings, brush holder assembly, brush – field, seal – stationary gear, grommet – motor lead, plug – shift lever support, cover – planetary gear, pivot pad – shift lever, stop collar, retaining ring – stop collar, planetary gear, planetary shaft, stationary gear, hardware kit – solenoid and thru bolt. WAI’s production of the Starter includes four (4) assembly phases, as well as a testing phase. The phases, in order of operation are: (1) Commutator End (CE) Assembly; (2) Drive End (“DE”) Assembly; (3) Solenoid Assembly and (4) Final Assembly. Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines "country of origin" 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 to render such other country the “country of origin”.  To determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred.  No one factor is determinative. Regarding your request for the appropriate country of origin of the starters, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means 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 to render such other country the ‘country of origin’ with origin in 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). 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 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 subject starters, it is the opinion of CBP that the field case, which according to our research, conducts the electric current that causes a magnetic flux around the starter armature. The armature also has a magnetic field around it, and the interaction between the two forces causes the movable armature to turn.  The field case assembly, being the stationary part, does not follow the armature rotation and, in this office’s opinion, provides the essential component of the starter, and that the totality of the manufacturing processes, does not effect a change to the field case’s primary purpose. The completed Starter’s functionality was predetermined by the field case, and it did not undergo a substantial change because of the Chinese assembly processing.  Therefore, based upon the facts presented, it is the opinion of this office that the assembly process performed in China did not result in a substantial transformation of the field case.  The non-Chinese components of the starter were not transformed in China into a new and different article of commerce with a name, character, and use which were distinct from the articles exported from China.  Consequently, the country of origin of the starter will ultimately be determined by the country of origin of the field case. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Matthew Sullivan at matthew.sullivan@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division