The country of origin of a steering wheel cover

N341518 August 2, 2024 OT:RR:NC:N2:206 CATEGORY: Origin Tim Parsons Parsons Trading 1244 River Park Blvd.Napa, CA 94559 RE:  The country of origin of a steering wheel cover Dear Mr. Parsons: In your letter dated July 16, 2024, you requested a country of origin ruling and eligibility for the duty-free treatment under the Generalized System of Preferences (GSP) on the steering wheel cover, which you filed on behalf of Duluth Trading. A sample was provided with your request and is being returned to you. The item under consideration is a Steering Wheel Cover (Item Number 49704), which is designed to slide over a passenger vehicle steering wheel. You state that it measures 14.5 inches in outer diameter and is 1.5 inches thick with a slot along the inner diameter edge with sewn edges. It is made of a woven polyester outer surface with a rubber tubing inside. According to the bill of materials you provided, the Chinese made synthetic rubber tubing in the shape of a steering wheel, rolls of polyvinyl chloride (PVC) leather, and fabric and foam for lamination are imported into Cambodia for further processing. In Cambodia, the PVC leather and foam are die-cut into matching decorative shapes and the PVC leather pieces are perforated. The foam shapes are then inserted under the PVC leather pieces. The fabric and foam are cut into strips to match the circumference of the rubber tubing in preparation for sewing, and the Duluth logo is embroidered. The previously mentioned decorative PVC leather and foam pieces are sewn into the fabric and foam. Finally, the strips of fabric and foam are stretched over the rubber tubing and sewn together to make up a complete steering wheel cover. 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 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, dated January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In the 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." The operations in Cambodia appear to be finishing operations, which do not transform the Chinese rubber tubing into an article with a new name, character and use. The rubber tubing’s use is pre-determined at the time of importation into Cambodia. As a result, the country of origin for the steering wheel cover is China for marking purposes and for purposes of applying Section 301 trade remedies. In your letter, you inquired about the application of GSP. Please note that legal authorization for the GSP program expired on December 31, 2020, and to date it has not been renewed by Congress. To obtain current information on GSP, check our Web site at www.cbp.gov and search for the term “GSP.” However, this office still makes determinations on GSP eligibility should the program be renewed, and retroactive duties paid. Title V of the Trade Act of 1974, as amended (19 U.S.C.A. 2461-65), authorizes the President to establish a Generalized System of Preferences to provide duty-free treatment for eligible articles from beneficiary developing countries (“BDCs”). Articles produced in a BDC may qualify for duty-free treatment under the GSP if the good are imported directly into the customs territory of the U.S. from the BDC and the sum or value of materials produced in the BDC plus the direct costs of the processing operations performed in the BDC is equivalent to at least 35 percent of the appraised value of the article at the time of entry into the U.S. See 19 U.S.C. 2463(a)(2) and (3). Pursuant to General Note 4 (a), Cambodia is considered a beneficiary developing country for the purposes of the GSP. However, General Note 4(d) states “articles provided for in a provision for which a rate of duty of "Free" appears in the "Special" sub column of rate of duty column 1 followed by the symbol "A*" in parentheses, if imported from a beneficiary developing country set out opposite the provisions enumerated below, are not eligible for the duty-free treatment provided in subdivision (c) of this note.” A good is considered to be a “product of” a BDC if it is wholly the growth, product or manufacture of the BDC, or if made of materials imported into the BDC, those materials are substantially transformed in the BDC into a new and different article of commerce. See 19 CFR 10.176(a). A substantial transformation occurs “when an article emerges from a manufacturing process with a name, character, or use which differs from those of the original material subjected to the process.” Texas Instruments Inc. v. United States, 681 F.2d 778 (1982). As we established above, the steering wheel cover is not a product of Cambodia. Rather, the country of origin of the article was determined to be China. As a result, the steering wheel cover will not be eligible for the preference under the GSP. 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