The country of origin of the JAS-Roll-1500kg

N337718 February 15, 2024 OT:RR:NC:N1:103 CATEGORY: Origin Aaron Marx Crowell & Moring, LLP 1001 Pennsylvania Ave. NWWashington, DC 20004 RE:  The country of origin of the JAS-Roll-1500kg Dear Mr. Marx: In your letter dated January 23, 2024, you requested a country of origin ruling on a specialized automated guided vehicle on behalf of your client, Samsung SDS America Inc. The function and design of the automated guided vehicle is identical to the unit discussed in New York ruling N336445, dated December 5, 2023. However, the procurement of components and the assembly of certain subassemblies will change, resulting in a new model number identified as the JAS-Roll-1500kg. The JAS-Roll-1500kg is described as an automated guided vehicle that is capable of loading roll-type objects and engineered to navigate autonomously throughout a manufacturing facility. It is specially designed to lift and transport anode rolls and cathode rolls that are used to manufacture electric vehicle batteries. The JAS-Roll-1500kg is assembled in South Korea using components sourced from China, Germany, India, Japan, Korea, Malaysia, Singapore, and Taiwan. Based on the information provided, the vehicle is divided into two sections, referred to as the Upper Frame Assembly and Lower Frame Assembly within your submission. The Upper Frame Assembly will be assembled in Korea under manufacturing processes categorized as mechanical assembly and electrical wiring. Its main components consist of a Korean handling frame, a Chinese shear lifting mechanism, and a Korean roll tray that acts as the support frame for each roll of material. The handling frame is constructed from intermediate components such as a frame connector, frame rack, and frame chassis that will be formed from steel tubing. The shear lifting assembly, which will function as the lifting device for the vehicle, is manufactured in China and then sent to Korea to be incorporated into the Upper Frame Assembly. Once bolted together, numerous mechanical and electrical components are added to the Upper Frame Assembly in Korea, including a lifting motor, power supply, lifting reducer, harnesses, controllers, and obstacle avoidance lasers. The Lower Frame Assembly will be formed and assembled in Korea. In your submission, you state virtually all of this assembly, including its components, will be of Korean origin. The process begins with fabricating metal plates into shapes that are later welded to form the chassis frame structure. Mechanical components are incorporated into the frame, including a Drive Frame Assembly consisting of a rear drive assembly, casters, drive springs, bearings, and linear guides. A drive motor, drive wheel, and drive reducer are joined to form a Steering Drive Assembly, which is bolted to the chassis. Numerous electrical devices are also incorporated, which include multiple harnesses, power supplies, batteries, sensors, safety lasers, controllers, and cameras. The Upper Frame and Lower Frame Assemblies are combined with various covers and shell components that form the housing for the finished machine. Lastly, software is loaded, and each machine will be calibrated, inspected, charged, and tested. With regard to your request for the appropriate country of origin of the JAS-Roll-1500kg, 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 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. CBP has held that whether an assembly process is sufficiently complex to rise to the level of a substantial transformation is determined upon consideration of all of the operations that occur within that country, including any subassembly processes that take place in that country. Based upon your description of the manufacturing operations, which differs from the facts presented in New York ruling N336445, the sum of the final assembly and the production of crucial components in South Korea, constitutes a substantial transformation. In particular, the sole subassemblies, namely the Upper Frame Assembly and Lower Frame Assembly, are created in Korea, combined with various mechanical and electrical components, and assembled to form the final automated guided vehicle. Thus, based on the totality of the circumstances, the country of origin of the JAS-Roll-1500kg, as described above, will be 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 Paul Huang at paul.huang@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division