The country of origin of a Step Drill Bit

N335593 October 6, 2023 OT:RR:NC:N1:118 CATEGORY: Origin Ning Zhou Jiangdu Orient Cutting Tools Factory Guocun, Jiangdu Yangzhou, 225238 China RE:  The country of origin of a Step Drill Bit Dear Mr. Zhou In your letter dated September 28, 2023, you requested a country of origin ruling for a Step Drill Bit that will be produced in China and South Korea.  You have stated that the bit will be imported into the United States in different surface colors, packaging, various step sizes for drilling hole diameters (e.g., 1/2", 3/4", 7/8", 1-1/8", 1-3/8"), various flute types (e.g., straight, spiral), and various shank shapes (e.g., hex, round).  Pictures and a description of the manufacturing processes were provided with your submission.  The Step Drill Bit is a conical-shaped drill bit with a gradually increasing diameter.  A sharp groove (i.e., flute) on the side of the tool serves as a cutting edge.  The bit also has several levels (i.e., steps) with increasing diameters from tip to end.  The bit is made of high-speed steel alloy and is designed for use with power hand drills, drill presses, or other rotating action tools that drill a variety of hole sizes in plastic, wood, and metal.  The manufacturing process begins in South Korea, where a high-speed steel rod is forged into the cylindrical shank and conical body of the bit.  The diameter of the shank is further machined to shape, and several drill steps and the tip are roughly machined into the body.  The bit is then exported to China, where it is heat-treated and the shank is ground to exact shape (e.g., round, hex).  The steps and tip are further machined to precise measurements.  Straight or spiral flutes are ground into the body of the bit to form the cutting edge. Finally, the bit is color coated, laser marked and packaged for retail sale. Regarding your request for the appropriate country of origin of the Step Drill Bit, 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; 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 Nat’l Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).  In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character, and use has been produced.  No one factor is decisive, and assembly operations that are minimal will generally not result in a substantial transformation. In our view, it is the forging of the high-speed steel rod into the cylindrical shank and conical body of the bit in South Korea that substantially transforms the blank rod into a new and different article of commerce, i.e., a Step Drill Bit.  We also note that in South Korea the diameter of the shank is further machined to shape, and several drill steps and the tip are roughly machined into the body.  Based on the provided description of the finishing operations performed in China, the forged drill bit is not substantially changed so as to transform it into a new article with a different name, character, or use.  Therefore, it is the opinion of this office that the country of origin of the Step Drill Bit is South Korea 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 Anthony Grossi at anthony.e.grossi@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division