The country of origin of a motor grader

N342125 September 11, 2024 OT:RR:NC:N1:103 CATEGORY: Origin Didie Muller Trade Pacific PLLC 700 Pennsylvania Avenue, SE, Suite 500Washington, DC 20003 RE:  The country of origin of a motor grader Dear Ms. Muller: In your letter dated August 16, 2024, you requested a country of origin ruling on a motor grader on behalf of SANY Heavy Industry India Pvt. Ltd. The merchandise under consideration is identified as a motor grader, model number SMG200AWD, and described as earth moving machinery suited for grading applications, including cutting, leveling, and contouring roads, highways, and other surfaces. It features an adjustable grading blade that is mounted within the wheelbase of the machine. Pictures and a description of the manufacturing processes were provided with your submission. The subject motor grader is assembled in India using components sourced from China, Denmark, India, Italy, Japan, the United Kingdom, and the United States. Based on the information provided, the main sections of the motor grader are the front frame, rear frame, engine, and rear axle assembly. Certain components are manufactured at SANY’s facility in India, including the front frame, rear frame, rotary ring, and drawbar. The front frame subassembly is described as a structural support for the grading blade and cab assembly. It is formed in India using elements that are wholly produced in India, such as blocks, baseplates, support plates, risers, connecting plates, mounting plates, and other shapes and profiles. The various elements are positioned and aligned in a welding fixture before they are joined by a welding robot. The weldment is then polished, shot blasted, washed, pretreated, painted, and inspected. The rear frame subassembly will hold the rear axle and connect to the front frame assembly. The elements for this assembly are also wholly produced in India and include various plates, blocks, beams, mounting plates, bracket mounts, and more. A worker inspects the components before systematically positioning and welding the individual pieces to form a weldment. The weldment is then polished, shot blasted, washed and pretreated, painted, inspected, and stored for future assembly. The rotary ring subassembly is described as a component within the motor grader integral to the adjustability of the grading blade. It is identified as a circular metal plate to which the blade is attached, and can rotate around its center, enabling an operator to position the blade at various angles relative to the grader. The drawbar subassembly is described as a linkage component that connects the frame to the blade and rotary ring subassembly. Its role is likewise to control the position and orientation of the blade, allowing an operator to adjust its height, angle, and tilt. Both the rotary ring subassembly and drawbar subassembly are produced at SANY’s facility in India from various shapes, including slabs, plates, and beams that are sourced locally in India. The final assembly process begins with mounting an auxiliary fuel tank and an Italian-sourced rear axle assembly to the rear frame assembly. Separately, a transmission assembly sourced from China is bolted to an engine sourced from the United Kingdom before the engine is lifted and mounted to the rear frame assembly. Next, a radiator, hydraulic oil tank, oil-water separator assembly, muffler, pipes, exhaust system assembly, intake system assembly, cooling system assembly, and fuel system are incrementally installed and connected to the engine and the rear frame assembly. A hoist is used to lift and align the front frame subassembly to the rear frame subassembly, allowing a worker to join the two assemblies. Next, linkage components, including a pendulum frame and a steering knuckle assembly are incorporated, followed by the installation of a front axle assembly. At a separate station, the cab assembly is prepared, which involves installing a seat assembly, control box, pedals, control levers, stairs, and more. Once complete, the cab assembly is lifted and mounted atop the front frame assembly. The rotary ring subassembly, drawbar subassembly, and blade are combined to form a slewing traction subassembly, which is later installed to the front frame. At the next station, a worker assembles the hood assembly, which involves securing the front hood to the rear frame and adding left and right hood frame weldments. Lastly, the tires are mounted, and filters, outer covers, panels, taillights, and handrails are added. With regard to your request for the appropriate country of origin of the motor grader, 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 (“TAA”) 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 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. Although the final assembly process that occurs in India requires numerous foreign inputs, significant manufacturing operations also occur in India. Multiple core assemblies and their subcomponents are wholly manufactured in India including the front frame, the rear frame, the hood frame, and more. Based upon your description, the sum of the manufacturing, preassembly of core components, and final assembly in India constitutes a substantial transformation. Thus, based on the totality of the circumstances, the country of origin of the motor grader, model number SMG200AWD, will be India. 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