The country of origin of gas grills

N339984 May 31, 2024 OT:RR:NC:N4:410 CATEGORY: Origin James Pai BDO USA 600 Anton Boulevard, Suite 500Costa Mesa, CA 92626 RE:  The country of origin of gas grills Dear Mr. Pai: This is in response to your letter dated May 7, 2024, on behalf of your client Nexgrill Industries, Inc., requesting a country of origin determination of gas grills for purposes of Section 301 trade remedies for the Chinese origin products. The merchandise under consideration are five product categories of propane gas grills to be used for cooking food which range from two to six burners. The products are listed as: 1) Two-burner gas grills with steel lids, 2) Three-burner gas grills with porcelain lids, 3) Four-burner gas grills with steel lids and the option of having different outer materials (black powder coating vs. stainless steel) for the lid end caps, 4) Five-burner gas grills steel lids and black powder-coated lid end caps, and 5) Six-burner gas grills with porcelain lids in a variety of colors. The grills are functionally the same with the only difference between the product categories being the number of burners. All models will be manufactured by almost identical operations/processes at a factory in Malaysia. It appears that the ruling N335086 dated September 15, 2023, was issued to you for almost identical products and manufacturing processes; however, this new submission has a different circumstance, i.e., production will be occurring at a Malaysian factory instead of an Indonesian one. You indicate that the gas grills each consist of a main lid, fire box, gas train assembly, control panel, cooking area, side shelf, cart frame, thermometer, and burners. You present a manufacturing process scenario, in which the factory in Malaysia assembles the components of both Chinese origin and Malaysian origin to manufacture the gas grills, including the production of certain key sub-assemblies and the final assembly process occurred in Malaysia. Specifically: Main Lid Production (“steel” and “porcelain”) The raw material of sheet steel is purchased in China and the raw material is shipped to Malaysia. In Malaysia, the sheets are made into the middle lid panels through forming, bending, and punching. The end caps (from China) are assembled onto the middle lid panels. The lids are then refined through sharp edge grinding. The Chinese-originating accessories (lid handle, badges, and thermometer) are prepared to be staged for assembly onto the lid. The accessories are assembled onto the lid sub-assembly. For the porcelain enamel lid model, some extra steps are performed, i.e., the lids are placed in a kiln to dry before application of wet porcelain, sprayed with porcelain enamel, placed on a conveyor system that feeds into a furnace, baked at 1600 Fahrenheit for 25 minutes, and removed from a conveyor system for inspection before being assembled onto the lid sub-assembly. The completed lid assemblies are then staged for pack out. Firebox Production The raw material of sheet steel is purchased in China then shipped to Malaysia. In Malaysia, the factory processes the sheet steel into the firebox panels by forming, bending, and punching the raw material. The resulting firebox panels are transformed into the firebox panels through forming, bending, and punching. The firebox panels are then refined through sharp edge grinding. The firebox panels are combined through various welding operations to form a firebox assembly. The newly formed firebox assemblies will be prepped for porcelain enamel coating, where the following process will take place: The fireboxes are placed in multiple separate chemical baths of the formulation for the purposes of degreasing, pickling, and rinsing. Afterwards, the fireboxes are kiln-dried. Various chemicals are mixed into a wet frit formulation. Porcelain enamel (frit) is sprayed to firebox sub-assemblies. The fireboxes are placed on a conveyor system that feeds into a furnace. The fireboxes are baked at 1,600 Fahrenheit for 25 minutes. After the processing described above, the fireboxes are removed from the conveyor system for inspection.  Upon the coating inspections passed, the finished fireboxes are then sent to the pack out line. Gas Train Assembly Production The Chinese-originating gas train assemblies (manifold tube, regulator hose, fittings, and gas valves) are purchased in China, where the gas valve port holes are added to the manifold. The manifolds are bent to shape and threaded connectors added, the gas valves are assembled onto the manifold. The regulatory gas tightness test is conducted. The manifold sub-assemblies are then shipped to the Malaysian factory, where the gas manifolds will be assembled onto an LP regulator sub-assembly in Malaysia. The completed gas train assemblies get fire tested, per the required CSA regulatory testing requirements. Burners Production The raw material (perforated tube steel) is purchased in China, where the tubes are cut to size (approximately 18 inches), one end of the tube is pressed and sealed, the opposite end is pressed and sealed to create a venturi funnel, a fuel mixer screw is added to this end, the venturi funnel end has a breather hole punched into it and then welded in spider mesh, cap is welded onto this open end to finalize assembly of the burner. The burners are shipped to Malaysia, where they will be installed into the fireboxes. The remaining components, such as control panel, cart frame, side shelf, and cooking area, will be manufactured in China and then shipped to Malaysia. In Malaysia, the completed firebox sub-assemblies then get fire tested, per the required CSA regulatory testing requirements before being sent to the pack out line. The control panel, knobs, and gas train assembly are installed onto the fireboxes. The gas train assemblies will be installed onto the grills and then tested for gas tightness, proper ignition, and combustion. After meeting regulatory testing requirements, the remaining components will be attached/combined with screws, bolts, and nuts to be manufactured into the finished product. Workers will then install labels and clean the surfaces of the product. Finally, the subject merchandise will be packaged for retail sale. Internal packaging items are added within the grill. The grill will be placed in its retail box and warehoused before being shipped to the U.S. 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. 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 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 National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993). Based on the information presented in the scenario, the key components, i.e., the main lids and fireboxes are made in Malaysia from the material of sheet steel from China. The production of these key components from the Chinese sheet steel would constitute a substantial transformation in Malaysia then they are manufactured into subassemblies, which are ultimately assembled into the subject grills. The manufacturing process performed in Malaysia with respect to the grills in the scenario does constitute a substantial transformation of the Chinese materials. The manufacturing process in Malaysia is more than a simple assembly. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into Malaysia. Thus, we find that the country of origin for the grills in the scenario will be Malaysia, and the Section 301 trade remedies for the Chinese origin products will not apply. 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 Michael Chen at michael.w.chen@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division