The country of origin of a nesting distribution cart

N336522 December 7, 2023 OT:RR:NC:N2:206 CATEGORY: Origin Raymond Lopez Ken Hamanaka Co. Inc. 138 Lomita StreetEl Segundo, CA 90245 RE:  The country of origin of a nesting distribution cart Dear Mr. Lopez: In your letter dated November 14, 2023, you requested a country of origin ruling on the nesting distribution cart, which you filed on behalf of your client National Cart, Co. The article under consideration is a non-powered cart used for manual material handling. You state that the cart has the ability to fold up into a nested configuration when empty. It is designed for transportation between buildings in a distribution network. The cart has latching doors to enclose and secure the contents of the cart during transportation. 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". In the present case, the components of the cart are sourced from Vietnam and China and imported to Vietnam for final assembly. The cart consists of eight (8) sub-assemblies. You state that the components are transformed during the manufacturing process in Vietnam into seven (7) unique sub-assemblies, which are then combined to produce a finished distribution cart. The sub-assemblies are manufactured beginning with a bare steel tube sourced locally in Vietnam. The tube is fabricated in Vietnam by cutting and bending into a hoop. From there the components sourced from China are welded to the steel frame. The combined sub-assembly is then powder coated, followed by attachment of latches and loose casters supplied from China. Plastic panels are then affixed as needed to complete the sub-assembly. This process is repeated for all 7 sub-assemblies, then a Chinese-sourced base deck assembly is attached at the bottom, the 8th sub-assembly, completing a fully assembled cart. Based upon your description of the manufacturing operations, the nature of the processing performed in Vietnam is not a simple one. In addition to the final assembly occurring in Vietnam, the frame is manufactured from steel tubes sourced from Vietnam. The complex operations result in the individual parts losing their separate identities to become a new article. Thus, based on the totality of the circumstances, the country of origin of the nesting distribution cart will be Vietnam. 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 Liana Alvarez at liana.alvarez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division