The country of origin of a bent axis hydraulic motor

N344048 December 10, 2024 T:RR:NC:N2:206 CATEGORY: Origin Paul Fudacz Braumiller Law Group, PLLC 5220 Spring Valley Road, Suite 200Dallas, TX 75254 RE:  The country of origin of a bent axis hydraulic motor Dear Mr. Fudacz: In your letter dated November 14, 2024, you requested a country of origin ruling on a bent axis hydraulic motor, for marking purposes and for purposes of applying trade remedies under Section 301, as amended, from China, which you filed on behalf of your client, Linde Hydraulics Corp. The article under consideration is a CMV 170 CC bent axis hydraulic motor, which is designed to be used as a propulsion system for mobile machinery like bulldozers, excavators and skid loaders. It can also be used in industrial applications, such as conveyers and molding machines, and construction equipment like winches, crane drives and self-propelled cranes and lifts. The motor operates on the principle of converting hydrostatic energy into mechanical energy. It converts hydraulic pressure into rotational force which is transmitted into useful work via an output drive shaft. You state that the motor motor consists of stationary and rotating components. The stationary components form the cover of the motor, while the rotary components convert the hydraulic pressure into a rotary motion. The main stationary components include a main housing and a port plate housing. The main housing serves primarily to enclose the motor and provide support to the internal rotating parts. The port plate also serves to enclose the motor and has ports to channel hydraulic fluid into and out of the motor. The key rotational components (rotary group) include a cylinder block with piston bores, hydraulic pistons, precision roller bearings and seals, and a highly complex splined output driveshaft. A solenoid operated hydraulic controller is used to control the rotational output of the motor. Based on the submission provided with your request, the port plate, control piston, and some other components of the rotary group are made in China, and imported to Germany along with some stationary components of the motor from China, Switzerland, Czech Republic, France, Great Britain, Ireland, Italy, Turkey, and Taiwan. The cylinder block, hydraulic pistons, output shaft, and the rest of the components of the rotary group, as well as some stationary components of the motor are made in Germany. In Germany, all components of the motor are assembled together using various specialized machines. Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States 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 United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940). Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 CFR 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” 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 the marking laws and regulations. A substantial transformation occurs when, as a result of manufacturing process, a new and different article emerges, having a distinct name, character or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process. See United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940). Although the assembly of the components together in Germany require specialized machines and expert workers, none of the imported components physically change. They become parts of a new article, but are not altered in any way. Thus, the processes in Germany are not complex enough to render a substantial transformation. As a result, we need to find the character of the motor. You state that the motor consists of stationary and rotating components. It has been CBP’s position that the component(s), which performs the main function within a machine/equipment/apparatus imparts the character of the entire article. There is no dispute that in this case, the rotary group imparts the character of the motor. Although there are separate components of the rotary group from China, it appears that most of the parts of the rotary group are from Germany. Furthermore, the value of the German components in the rotary group and overall the entire motor, is higher than the components from China and the other countries combined. Plus, the final assembly, though not complex, also occurs in Germany. As a result, it is the opinion of this office that the country of origin for the CMV 170 CC bent axis hydraulic motor will be Germany for marking purposes.  Additionally, trade remedies under Section 301, as amended, from China, are not applicable. 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