The country of origin of sprockets and idler assemblies

N335319 September 29, 2023 OT:RR:NC:N1:103 CATEGORY: Origin George Tuttle III Tuttle Law Offices 3950 Civic Center Drive, Suite 310San Rafael, CA 94903 RE:  The country of origin of sprockets and idler assemblies Dear Mr. Tuttle: In your letter dated September 14, 2023, you requested a country of origin ruling on sprockets and idler assemblies on behalf of your client, Sejin, Inc.  Pictures and a description of the manufacturing processes were provided with your submission. The subject components are used in the undercarriage of crawler-type equipment. The manufacturing process for the idler begins in Vietnam, where it is formed using a sandcasting process that involves pouring molten steel alloy into a sand mold. The idler is removed from the mold, sprues and casting artifacts are removed, and then roughly machined to its final dimensions. The idler is sent to China where it is machined to its final tolerances, heat treated for hardness, tempered to increase toughness, and polished. Next, the idler is assembled with additional components, including a shaft, seals, plugs, pins, O-rings, brackets, retainers, and collars. The idler assembly is then painted and packaged. The manufacturing process for the sprockets begins in Vietnam, where the raw sprockets are cast. Then, the castings are placed into a low-temperature oven and are subsequently cooled. Afterwards, the internal dimensions of the center bores undergo a machining process, resulting in the removal of approximately ten percent of material. The sprocket castings are then exported to China for additional processing. In China, the mounting face, bolting surface, and internal diameter of the center hubs are further machined. The manufacturing process continues with the chamfering of edges, and the drilling and deburring of mounting holes in the flanged surface of the hub. Less than five percent of material is removed during the machining and drilling processes in China. To complete the manufacturing process, the sprockets are heat treated and painted. With regard to your request for the appropriate country of origin of the idler and sprocket, 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. When determining the country of origin for purposes of applying trade remedies, the substantial transformation analysis is applicable. 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, 681 F.2d 778 (CCPA 1982). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). In viewing the information provided with your submission, the idler casting has a pre-determined end use prior to being subjected to the described finishing processes in China. It is not substantially changed by the addition of the remaining components, nor are the finishing and assembly operations complex enough to transform the idlers into a new article. When exported from Vietnam, the idlers, while not ready for direct use, have the approximate shape and outline of finished idlers, and can only be used as an idler assembly upon completion. Therefore, the country of origin of the finished idler assembly is Vietnam for the purpose of Section 301 Trade Remedies. In viewing the illustrations submitted for the sprockets, the castings feature an outer profile with teeth and a circular center hub that has an internal diameter discernable to the perimeter of the final drive prior to being exported from Vietnam. In this condition, the castings are recognizable as sprockets that will transmit power from the final drive to a track chain assembly, and have a pre-determined end use prior to being subjected to the described finishing processes in China.  As such, the processes completed in China do not substantially transform the sprocket castings, nor do they change the shape, character, or predetermined use of the castings. The sprocket castings are not transformed in China into a new and different article of commerce with a name, character, and use distinct from the article exported from Vietnam. Accordingly, the county of origin for the finished sprockets is Vietnam for the purpose of Section 301 Trade Remedies. 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. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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