The country of origin of an impact drill

N346961 April 9, 2025 OT:RR:NC:N1:164 CATEGORY: Origin Laura Rabinowitz Greenberg Traurig, LLP One Vanderbilt Avenue New York, NY 10017 RE: The country of origin of an impact drill Dear Ms. Rabinowitz: In your letter dated March 19, 2025, you requested a country of origin ruling regarding an impact drill on behalf of your clients Positec USA, Inc. and RW Direct, Inc. Technical information was provided with your submission and in follow-up correspondence. The item for consideration is described as a battery-powered impact drill (Item # WU377) designed for drilling holes in wood and steel. As described, the fully assembled impact drill has 12 primary features: chuck, torque adjustment ring, two-speed gear control, forward/reverse rotation control, soft grip handle, battery pack, belt hook, battery capacity indicator, battery pack release button, light-emitting diode (LED) light, on/off switch, and bit clip. You clarify that drill bits are not included with the imported product. Furthermore, some models include a battery pack and battery pack release button, while others do not. The major functional components are a printed circuit board assembly (PCBA), a motor (rotor and stator), and a gearbox which are manufactured and combined into a subassembly in Vietnam. As you describe, the gearbox contains components that deliver rapid and forceful rotational impacts during operation. These impacts assist the drill’s rotation when encountering resistance in a workpiece. After a Chinese-origin chuck is assembled onto the head of the gearbox in Vietnam, the four combined components are shipped to China for final assembly with 45 additional Chinese-origin components, including, but not limited to wires, screws, foam pad, labeling, and handle body. Assembly begins with the gearbox in Vietnam. The gearbox interior is composed of multiple layers of gears, with each layer consisting of three to four gears. During assembly, gears are placed into the gearbox in a specified arrangement that, when combined, work to reduce the speed and increase the torque of the drill. At this stage, the impact components are also installed into the gearbox. Next, a gear is installed onto the motor head. After that, the motor gear is inserted into the gearbox. This connection creates a motor and gearbox subassembly to transmit the motor’s rotation into the gearbox and drive the rotation of the gearbox shaft. At that point, the PCBA is connected to the rear end of the motor. The PCBA connects the power supply and controls the starting and stopping of the drill. Assembly in Vietnam concludes with the chuck installation onto the shaft of the gearbox with screws. The chuck’s primary function is to hold a drill or screwdriver bit during operation. In your letter, you state that the production and assembly of the PCBA, motor, and gearbox in Vietnam includes the work of electricians, product engineers, test engineers, and workers who are specially trained to ensure the product meets quality standards and specifications. In China, assembly continues with the installation of a nut into the drill casing. Next, the motor and gearbox subassembly are placed into the drill casing with other components. Following that, the PCBA, switch, and wires are placed into the casing. The two halves of the casing are attached together and fastened with screws. Finally, the drill undergoes inspection for quality assurance and is packaged with accessories for shipment. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter H301619, dated November 6, 2018. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). 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 the instant scenario, the essence of the impact drill is imparted by the motor and gearbox subassembly from Vietnam. When actuated, rotation is initiated in the motor by the action of the rotor within the stationary stator. This rotation is then directly transmitted into the gearbox which reduces the speed of rotation and increases torque. Furthermore, the distinguishing impact function is accomplished by components within the gearbox. During operation, it is the rotation, torque transmission, and forceful impacts that enable the drill to function as desired. Additionally, the 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. Here, the motor and gearbox subassembly from Vietnam is the primary functional component of the impact drill and remains unchanged during assembly with Chinese components in China. The assembly operations in China, which you state are performed by lower-skilled workers, consist mainly of placing and pressing components into the drill casing and securing with fasteners. Based on your description, the motor and gearbox subassembly from Vietnam imparts the essential identity of the impact drill because it is indispensably responsible for the rotation, torque, and impacts to drive the drill during operation. The subassembly is uniquely designed and manufactured for such use, and an impact drill would not be capable of performing impact drilling or driving operations in its absence. Finally, the simple assembly operations with less-significant components in China do not substantially transform the motor and gearbox subassembly. No article emerges with a new name, character, or use different from that possessed prior to the simple assembly operations in China. As a result, no substantial transformation occurs in China. Accordingly, we find that the country of origin is Vietnam. 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 (C.F.R.), 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 C.F.R. 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 Taylor at paul.m.taylor@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division