The country of origin of an electric scissor lift

N340058 June 4, 2024 OT:RR:NC:N1:103 CATEGORY: Origin Jeremy Page Page Fura, P.C. 939 W. North Avenue, Suite 750Chicago, IL 60642 RE:  The country of origin of an electric scissor lift Dear Mr. Page: In your letter dated May 10, 2024, you requested a country of origin ruling on an electric scissor lift on behalf of your client, Toyota Material Handling, Inc. The merchandise under consideration is identified as a self-propelled electric scissor lift that will be imported under model numbers SV1932E, SV2032E, SV2632E, SV2646E, and SV3246E. The five model numbers are functionally the same but will have different specifications, such as lifting capacity and platform reach height. The subject scissor lift will be imported without its battery, which will be added in the United States. Pictures and a description of the manufacturing processes were provided with your submission. The subject electric scissor lift is assembled in Japan using components sourced from China, Japan, and the United States. Two separate production scenarios were submitted. In both scenarios, the final assembly uses three main sections that are identified in your submission as a Frame Base Assembly, Scissor Subassembly, and Platform Subassembly. In the first scenario, the assembly process begins in Japan with a Chinese Frame Base Assembly, which is described as a frame that will serve as the substructure for the scissor lift. Various parts are incorporated into this frame, beginning with a hydraulic subassembly, pothole protector subassembly, steering subassembly, and a Chinese hose subassembly. Before the hydraulic, pothole, and steering subassemblies are added to the frame, they are preassembled in Japan using both Chinese and Japanese components. Next, a worker installs the parts for the drive system, a process that is described primarily as fastening components sourced from China, including a gearbox, motor assembly, wheel hub assemblies, and tires. Also added to the Frame Base Assembly is a battery charger and a lower control box, an enclosure that will contain a control panel, meter, printed circuit board assembly, various switches, connectors, and cabling. Additional electrical devices including a buzzer, relay, inverter, fuses, limit switch, horn, and sensors are also fastened into place. Separately, workers prepare the Scissor Subassembly, which is sourced from China, for final assembly. The Scissor Subassembly is described as the lifting section of the vehicle, consisting of extendable arms that raise the platform of the finished scissor lift. In Japan, valves, brackets, lift cylinders, sensors, hoses, wire harnesses, and cabling are added. The components are attached to the subassembly using fasteners such as pins, locks, and washers. The Platform Subassembly is sourced from China and arrives in Japan preassembled with sliders, fasteners, and rollers. During final assembly, the Platform Subassembly is first mounted onto sliding blocks located on the Scissor Subassembly, then both are lifted and joined to the Frame Base Assembly. Afterward, peripheral components are added, including sensors, lights, an emergency shutoff, and an upper control box, a device that incorporates a user control panel to operate the scissor lift. Lastly, guards and handrails are installed before operational testing is performed. In the second scenario, the operational steps are identical to the first scenario except the weldments for the Scissor Subassembly and Platform Subassembly will be produced in Japan. The arms and links for the Scissor Subassembly are formed from steel in Japan and then preassembled with the components described above. Similarly, the platform and guards for the Platform Subassembly are manufactured in Japan from metal material. With regard to your request for the appropriate country of origin of the electric scissor lift, 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 on the information in your submission, the final assembly that occurs in Japan is time consuming, but not particularly complex. As a result, we must consider the totality of the circumstances, including the country of origin of the article’s components, the extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use. The submitted description shows the processing steps are dominated by the three structural subassemblies (i.e., Frame Base Assembly, Scissor Subassembly, and Platform Subassembly), which, in our view, also impart each scissor lift with its essential character. In addition, the structural subassemblies are sent to Japan with an end-use that is pre-determined to be incorporated into a scissor lift and do not undergo a change in use. While we recognize that certain ancillary subassemblies, including the hydraulic subassembly and the pothole protector subassembly, are unified in Japan prior to being incorporated into the Frame Base Assembly, the operational steps are largely described as joining, bolting, and connecting dedicated components together, with the majority of those subcomponents also being of Chinese origin. Under the first scenario, the Frame Base Assembly, Scissor Subassembly, and Platform Subassembly are all produced in China. Since all three of the major structural subassemblies are produced in China, the country of origin will be China for marking and for the purposes of Section 301 Trade remedies. Under the second scenario, the Frame Base Assembly is produced in China while the Scissor Subassembly and Platform Subassembly are produced in Japan. Because two of the three major structural subassemblies (i.e., Platform and Scissor subassemblies) are produced in Japan, the country of origin will be Japan for marking and for the purposes of Section 301 Trade remedies. Please note the merchandise in question may be subject to antidumping duties and countervailing duties (AD/CVD). Written decisions regarding the scope of AD/CVD orders are issued by the Enforcement and Compliance office in the International Trade Administration of the Department of Commerce (ITA) and are separate from tariff classification and origin rulings issued by Customs and Border Protection. General information regarding the ITA and AD/CVD can be found at https://www.trade.gov/us-antidumping-and-countervailing-duties. The ITA’s “Guide on How to File for an Antidumping/Countervailing Duty Scope Ruling Request” is available at https://enforcement.trade.gov/scope/Request-Scope-Ruling.pdf. 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