The country of origin of an automated guided vehicle

N341251 July 29, 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 an automated guided vehicle Dear Mr. Marx: In your letter dated July 11, 2024, you requested a country of origin ruling on the JAS-Formation-1020kg on behalf of your client, Samsung SDS America Inc. The merchandise under consideration is identified as the JAS-Formation-1020kg, an automated guided vehicle used to transfer formation trays (specially shaped trays that hold battery cells) between assembly equipment and formation equipment during battery manufacturing. Each vehicle is designed to navigate autonomously throughout a manufacturing facility and is equipped with a roller mechanism that loads and unloads the trays from a corresponding dock. The roller mechanism is enclosed within a frame that sits atop a self-propelled chassis. The JAS-Formation-1020kg consists of components sourced from China, Germany, India, Japan, Korea, Malaysia, Singapore, and Taiwan. The final assembly occurs in Korea using two subassemblies that are also preassembled in Korea, identified in your submission as a driving frame assembly and a handling frame assembly. The driving frame assembly contains a frame that provides structural support for the battery, cameras, and driving components. The frame is formed in Korea using sheet metal that is transformed into plate supports, brackets, boards, and frame components, elements that are later welded together to form a weldment structure. After the weldment is formed, a worker begins to install individual components, including a motor, wheel assembly, battery, and connector assembly consisting of a safety controller board, a servo motor drive, and the main control board. This process is described largely as fastening components to the driving frame assembly using screws and fasteners. At the next step, a collision bar assembly and various sensors are added, which involves securing lidar sensors to brackets before mounting them to the frame. Lastly, cable ducts are installed before the wiring is connected and then organized using cable ties. The handling frame assembly houses the roller mechanism responsible for loading and unloading the formation trays. The assembly begins with a Korean-sourced, cube-like metal frame that is fitted with supports, brackets, and plates. These elements are used to hold touch panels, sensors, switches, and other electrical components. Next, a worker installs the roller assembly inside the frame, which consists of a bearing block, roller chain, motor, reducer, power sprocket rollers, and driven sprocket rollers. Afterwards, electrical components are added, including a network video recorder, alarm, sensors, various printed circuit board assemblies, and more. The last step during this preassembly stage involves connecting the power cables, communication cables, and sensor cables. Once preassembly is complete, the handling frame assembly is lifted and secured to the driving frame assembly. A worker proceeds to install the outer covers, which include front, rear, and side panels. Finally, the vehicle undergoes testing, inspection, and calibration. With regard to your request for the appropriate country of origin of the JAS-Formation-1020kg, 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, the sum of the final assembly and the preassembly of core components in Korea, constitutes a substantial transformation. In particular, mechanical and electrical components of multiple origins are incorporated into a drive frame assembly and handling frame assembly before they are joined to form the final automated guided vehicle. Thus, based on the totality of the circumstances, the country of origin of the JAS-Formation-1020kg, 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