The country of origin of a hydraulic floor jack

N333646 July 14, 2023 OT:RR:NC:N1:103 CATEGORY: Origin H. Michael Leightman Ernst & Young LLP 1401 McKinney Street, Suite 2400Houston, TX 77010-4034 RE:  The country of origin of a hydraulic floor jack Dear Mr. Leightman: In your letter dated June 22, 2023, you requested a country of origin ruling on behalf of your client, Saturn Engineering Systems, LLC. The merchandise under consideration is described as a hydraulic floor jack, imported under model numbers VFJS15, VFJS20, VFJS25, VFJS30, VFJS35, and VFJS40. The jacks are designed to lift vehicles, allowing a user to perform work to the underbody or wheels of the vehicle. Although the lifting capacities will differ among the model numbers, they will all have identical manufacturing processes. You state the components and materials used during the manufacturing process are sourced from Vietnam and China. The manufacturing process begins in Vietnam with the production of subassemblies and component parts. The subassemblies start as unfinished steel sheets that are laser cut into blanks of various shapes and sizes. A worker stamps the blanks into three-dimensional shapes to form components for the frame of the floor jack. Afterwards, the frame components are welded, shot blasted, and powder coated to form the lower chassis subassembly and lift arm subassembly. Additional components including the handle yoke, saddle, and cover plates, are also fabricated for later assembly. The manifold blocks for the hydraulic power unit are also produced in Vietnam where liquid metal is poured into non-reusable sand molds to form metal castings. After the blocks have cooled and solidified, they are machined and then assembled with additional components sourced from either Vietnam or China, which include hydraulic check valves, overload relief valves, seals, gaskets, the main cylinder and piston, and other components. The final assembly involves installing the pump handle, front wheels, rear casters, guide arms, hydraulic power unit, and lift arm subassembly to the chassis subassembly. The individual steps consist largely of fitting, greasing, and fastening components. With regard to your request for the appropriate country of origin of the hydraulic floor jacks, 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 in order to render such other country the “country of origin” within the meaning of this part. As stated in HQ 735009, dated July 30, 1993, “The country of origin is the country where the article last underwent a ‘substantial transformation,’ that is, processing which results in a change in the article's name, character, or use.” In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” 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 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. Based upon your description of the manufacturing operations, we note the dominant components, including the lower chassis subassembly, lift arm subassembly, and certain components of the hydraulic power unit are manufactured in Vietnam. These components are assembled to form an article, a hydraulic floor jack, which emerges from the process with a new name, character, and use, different from that possessed by the materials prior to the processing. Thus, based on the totality of the circumstances, the country of origin of the hydraulic floor jacks will be Vietnam. In your letter, you also inquired about the country of origin marking for the hydraulic floor jacks. The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain. With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable. Included with your request are photos that identify three separate locations where each hydraulic floor jack will be marked. First, the words “Made in Vietnam” will be etched onto the hydraulic yoke assembly and appear besides the model number, serial number, and identification number. The words “Made in Vietnam” will also be printed onto a label that is affixed to the outer cardboard packaging for the product. The words are located above the UPC code and to the left of a warning statement related to California Proposition 65, which indicates “[t]his product can expose you to …which is known to the state of California to cause…”. In our view, the noted California Proposition 65 Warning will not deceive or mislead the ultimate purchaser as to the actual country of origin of the article. Lastly, the words “Made in Vietnam” will be printed at the bottom of a separate warning label that will be affixed onto the top of the lift arm assembly. We note that the label also includes a statement related to California Proposition 65, which indicates “[t]his product can expose you to …which is known to the state of California to cause…”. However, when compared to the warning label, the wording "Made in Vietnam" is printed in a larger, bolded font, which in our view will not deceive or mislead the ultimate purchaser as to the actual country of origin of the article. The proposed marking of the imported hydraulic floor jacks, as described above, is an acceptable country of origin marking if conspicuously, legibly, and permanently marked in satisfaction of the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134. 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 and Border Protection 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 and Border Protection 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 Paul Huang at paul.huang@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division